To the casual passerby, the building at 519 Kimball Ave. is just what the sign out front suggests: Roanoke Gas.
But out of sight from the street, on the flat rooftop of the headquarters of a company that distributes natural gas to nearly 63,000 customers, is an array of 187 solar panels.
Installed late last year, the panels are expected to produce about 88,000 kilowatt hours of electricity per year, enough to trim nearly $10,000 from Roanoke Gas Co.’s annual bills to Appalachian Power.
“We thought it was a prudent investment and a prudent project,” said Paul Nester, president and CEO of the company. ”And of course it’s environmentally friendly.”
The idea of a fossil-fuel company embracing renewable energy might turn the heads of some of the passing motorists on Kimball Avenue. But in joining a growing number of businesses and homeowners going solar, Roanoke Gas remains confident that there will be a public need for its product for many years to come.
In fact, Nester said, the project provides a small-scale example of the limitations of solar energy as Virginia and the United States work to create a carbon-free power grid.
“You get a feel for the peaks and valleys,” he said — the latter coming on the days when clouds, rain or snow block the sun from charging photovoltaic solar panels that convert its rays to electricity.
Despite the intermittency, 754 non-residential accounts such as businesses, schools and government entities in Virginia currently have solar operations, according to the Department of Mines, Minerals and Energy. Five years ago, that number was 265.
In Western Virginia, about 80 non-residential customers of Appalachian Power Co. use net metering, a billing mechanism in which the utility credits the customer when it produces more electricity from renewable sources than it needs.
The number of Appalachian’s commercial customers interested in solar energy has remained steady in recent years, company spokeswoman Teresa Hall said, while there has been increased interest among homeowners.
Among the reasons Hall cited for the uptick: an extension of a federal tax credit for solar installations, a push by developers of renewable energy who see a growing market, and laws like the Virginia Clean Economy Act, which pushes for a transition on multiple fronts.
Natural gas growth continues...
At the same time it was installing solar panels on its roof, Roanoke Gas was seeing growth in its core mission.
In the last three months of 2020, which make up the first quarter of its current fiscal year, the company added 170 new customers. During a conference call last month to discuss the results, Nester said 1.6 miles of new main pipe were installed during the first quarter, compared to 2.3 miles in all of the preceding fiscal year.
A downturn in natural gas use by some commercial customers, caused by the COVID-19 pandemic, has been made up in other sectors. For example, a UPS facility in Roanoke converted its fleet of delivery trucks to run on compressed natural gas instead of diesel fuel.
More growth is expected, in part due to new apartment complexes and townhomes in Botetourt County that will soon be coming online. Roanoke Gas also plans to expand its service to much of Franklin County, which currently lacks access to natural gas.
While the company may not be growing by leaps and bounds, the past decade shows a steady upwards trajectory.
In 2010, it had 56,975 customers. Annual reports filed with the U.S. Securities and Exchange Commission show an average increase of 471 accounts a year, and at the end of January, 62,830 homes and businesses were using natural gas from the company.
“As you can see, and as we’ve discussed now for several years, the Roanoke Gas utility has just performed really well,” Nester said while reviewing the 2021 first quarter results in last month’s conference call.
To sustain future growth, the company plans to receive a new supply of natural gas from the Mountain Valley Pipeline, a controversial project that has been mired in legal and regulatory battles for the past three years.
RGC Midstream, a sister company that is also a subsidiary of Roanoke Gas’s parent company RGC Resources, is a 1% partner in the $6 billion joint venture that includes four other energy companies.
Critics have long argued that Roanoke Gas gets enough fuel from two existing pipelines, the East Tennessee and Columbia lines, and that relying on Mountain Valley will mean higher bills for ratepayers.
... while solar and wind are catching up
For many businesses, an investment in solar energy can save two things: money on electric bills in the short term, and just maybe — collectively and over time — the planet.
Decreases in the costs of installing solar panels have come as urgency grows to use more renewable energy, reducing the amount of greenhouse gases that cause climate change.
“More and more companies are saying, ‘We have a renewable goal we want to meet,’” said Patrick Feucht, the owner and general manager of Baseline Solar Solutions, a Blacksburg company that installs about 50 projects a year.
While most of his business is residential, Feucht said he expects more calls from businesses in the future.
Appalachian declined to identify any of the utility’s 80-some non-residential accounts, citing customer confidentiality. In 2013, the Veterans Affairs Medical Center in Salem installed 6,000 solar panels on an adjacent field, according to news reports at the time. Carilion Clinic has a smaller project at its New River Valley hospital.
About 1,200 of Appalachian’s 500,000-plus Virginia customers use solar energy. Dominion Energy, the state’s other large utility, has about 12,200 net-metering customers in Virginia and North Carolina. (A number for Virginia alone was not available.)
About 95% of its accounts are residential, according to Dominion spokeswoman Audrey Cannon.
In addition, Dominion owns 18 utility-scale solar projects that are in operation or under development in Virginia, Cannon said. At peak capacity, the solar farms will produce 484 megawatts of electricity, or enough to power about 121,000 homes. Another 21 third-party sources provide 774 more megawatts though power purchase agreements with Dominion.
Appalachian currently has no utility-scale solar operations, although a 15-megawatt facility in Campbell County is scheduled to go online this year.
“They have not been as active as Dominion in pursuing solar opportunities,” said Jonathan Miles, executive director of the Center for the Advancement of Sustainable Energy at James Madison University.
Appalachian has a smaller customer base in a part of Virginia that is not growing as rapidly as the territory served by Dominion, which also has more resources to draw from, Miles said.
The Clean Economy Act requires Appalachian to invest in more solar and wind energy in the coming years, as the utility works toward a mandate of producing a totally carbon-free product for its Virginia customers by 2050.
At least for now, though, natural gas is expected to continue its key role in both heating homes and fueling industries and power plants.
“The existing energy infrastructure can’t be replaced immediately, but changes are accelerating, thanks to rapidly-changing energy markets and policies,” Miles said. “The advent of affordable, reliable and scalable energy storage is likely to be a game changer and will enable an even faster transition to renewables.”
As batteries and other energy storage technologies become more mainstream, they will enable solar and wind generators to operate more efficiently and react to power demands.
As one example, Miles cited the Beech Ridge Energy Center in West Virginia, which uses lithium-ion battery storage to regulate the rate at which power is delivered from its wind turbines to the grid.
At Roanoke Gas, the company decided to invest about $100,000 in solar panels that cover most of its rooftop. It will take about 11 years for the project to pay for itself in lower electricity costs, Nester said.
Employees at the business are following the project closely, tracking the amount of electricity it generates on a daily basis.
“We’re kind of fascinated by it, to be honest,” Nester said.