Cap on TVA purchases brings solar eclipse to industry

Since the year 2000, the number of solar power installations in the Tennessee Valley has grown from only three to nearly 1,700.
Buoyed by some of the most generous incentives offered by any utility in the South, TVA gets as much power from the sun as it does from either Norris or Chickamauga dams.
But the boom in small-scale solar generation has turned to a bust for many solar installers this summer. TVA capped its 17-cents-per-kilowatt-hour payment for solar generation to only 10 megawatts this year and the limit quickly was reached before many interested homeowners and businesses were able to take advantage of the offer.
Solar power enthusiasts appealed to TVA directors Thursday to buy more solar through its Green Power Providers program. TVA spends about $25 million a year in above-market payments to buy solar generation to help meet its goal of getting more electricity from renewable sources.
As solar panels become more efficient and the industry matures, TVA is looking to cut that subsidy and move toward more market-rate prices for solar generation.
TVA and Pickwick Electric Cooperative are working with Strata Solar to develop two 20-megawatt solar farms near Selmer, Tenn., which will sell power to TVA at market rates. The new solar installations will be the biggest yet in Tennessee and could provide enough electricity for 4,000 Valley homes.
“I actually think we’ve been in a pretty good spot here,” TVA President Bill Johnson said. “As the price comes down, we can afford to do more solar.”
TVA Chairman Bill Sansom said TVA has to balance the costs of subsidizing small solar units, which tend to increase the average price of TVA power, with consumer desires for more solar and assistance to help nurture the new industry.
TVA opened up another 2.5 megawatts in its Green Power Partners program on Aug. 1, but that capacity was sold at auction in only one minute and most applicants didn’t get a piece of the program. TVA has not yet set the price or capacity for its solar programs for 2014, but officials said the utility should soon announce its plans.
“We are looking at the program and we’re looking at the type of adjustments that we can make to help make it a little more friendly for folks,” said Joe Hoagland, TVA’s senior vice president of policy and oversight.
Large-scale solar farms are adding solar generation at less cost for TVA, Hoagland said. TVA still has nearly 75 percent of the capacity available for such large-scale, market-rate solar generation.
“We want to see more of those because they not only give us more renewable energy, they do it without putting any extra burden on our other ratepayers,” Hoagland said.
Future purchase plans and incentives for renewable power will be shaped, in part, by a new Integrated Resource Plan TVA will launch this fall to study future power options for the next two decades. The updated power plan will be finalized by 2015, Hoagland said.

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