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.
Archive for Grants and Incentives
Since the year 2000, the number of solar power installations in the Tennessee Valley has grown from only three to nearly 1,700.
If anybody doubts that federal energy regulators are aware of the rapidly changing electricity landscape, they should talk to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission (FERC).
“Solar is growing so fast it is going to overtake everything,” Wellinghoff told GTM last week in a sideline conversation at the National Clean Energy Summit in Las Vegas.
If a single drop of water on the pitcher’s mound at Dodger Stadium is doubled every minute, Wellinghoff said, a person chained to the highest seat would be in danger of drowning in an hour.
“That’s what is happening in solar. It could double every two years,” he said.
Geothermal, wind, and other resources will supplement solar, Wellinghoff said. “But at its present growth rate, solar will overtake wind in about ten years. It is going to be the dominant player. Everybody’s roof is out there.” Advanced storage technologies also promise lower costs, he said. “Once it is more cost-effective to build solar with storage than to build a combustion turbine or wind for power at night, that is ‘game over.’ At that point, it will be all about consumer-driven markets.”
If FERC does not ensure the grid is ready to integrate the growing marketplace demand for distributed solar and other distributed resources, Wellinghoff said, “We are going to have problems with grid reliability and overall grid costs.”
Transmission infrastructure will be able to keep up with solar growth. The big changes will be at the distribution level where FERC has less influence, he explained. But the commission has been examining the costs and benefits of distributed generation (DG) in wholesale markets.
“Rate structures need to be formulated in ways that fully recognize the costs and benefits of distributed resources,” Wellinghoff said. “In many utility retail rates, a disproportionate amount of the fixed costs are recovered through a variable rate. That is problematic when a lot of people go to distributed generation.”
The net metering controversy this has caused at utilities like Xcel and Arizona Public Service, he said, can only be resolved by “the fully allocated, fully analyzed cost and benefit study of distributed resources.”
TVA will install at least 500 kWs of solar PV at TVA facilities, TVA directly served customer locations, or another government-owned facility (including all local public power companies served by TVA), and shall maintain the PV installations for a minimum of twenty years following approval of project plan. The objective of SAVE is for TVA to partner with the regional community to raise solar energy awareness and education, reduce solar energy costs, and to test the market for upfront Renewable Energy Credit (REC) purchases. The SAVE initiative is based on a community solar business model which brings together individual donors, organizations, and investors to leverage community engagement and maximize stakeholder value.
1. it does not address distributor’s concerns; 2. It does not address soft costs; 3. It does not avoid borrowing of money; 4. It may not locate the solar where it can be best incorporated; 5. It is too small to make an impact on increasing consumer demand; 6. Who manages the overall program(s)? 7. Continue the concept of asking for donations?
As Debbie Dooley co-founder of the Atlanta Tea Party explains, “I’m a grandmother, and I want to be able to look my grandson in the eyes and tell him I’m looking out for his future. Conservation is conservative, and protecting our children and our natural resources is a conservative value.” Those who believe in the free market need to reexamine the way our country produces energy. Giant utility monopolies deserve at least some competition, and consumers should have a choice. It’s just that simple, and it’s consistent with the free-market principles that have been a core value of the Tea Party since we began in 2009.
“In Georgia, we have one company controlling all of the electricity production, which means consumers have no say in what kind of power they must buy. A solar company could not start up and offer clean power to customers because of restrictions in state law. Our Constitution does not say that government should pick winners and losers, but that is what government is doing when it protects the interests of older technologies over clean energy that’s now available at competitive prices. I say, let the market decide” says Debbie.
She goes on to explain, “Georgians are currently and unjustly denied this opportunity, and will continue to be unless a law is passed to change the system. That is why the Atlanta Tea Party supported Senate Bill 401 in the past legislative session. Georgia Power opposed it and it never made it out of committee. We will try again when the Georgia legislature reconvenes in January 2014. All states should allow their citizens the opportunity to generate and sell their own solar power.”
So I ask our elected state and federal officeholders, “Why hesitate in voting for extending the Master Limited Partnership to renewables?” Level the energy playing field. Here in Tennessee, our citizens have the same demands as our neighbors in Georgia. TVA board serves the people in the valley, why not listen to their demands for cleaner energy?
Postscript: Americans for Prosperity, which like the Tea Party have been nurtured and sponsored by the Koch brothers oil billionaires, is dismissing the Georgia faction as an aberration, or even more damming, as a “green Tea Party.” It has sought to turn the issue of rights on its head by arguing that rooftop solar will “infringe upon the territorial rights to the distribution grids” of the network operators.
Strata Solar will build and maintain two 20-megawatt solar farms interconnected to the TVA power system
Strata Solar is working with the Tennessee Valley Authority and Pickwick Electric Cooperative to develop the two largest solar energy installations in the Tennessee Valley near Selmer in McNairy County, TN. TVA will buy the electricity at market rates under TVA’s Renewable Standard Offer program.
“This project will add a tremendous amount of solar power to our already strong renewable lineup,” said Patty West, TVA director of Renewable Energy Programs. “Because TVA is purchasing the output at market rates, the electricity will also be among our cheapest solar power, moving us toward our vision of being a national leader in providing low-cost and cleaner energy.”
Current plans call for the solar farms to have more than 160,000 solar panels installed on over 300 acres. Each farm will be four times bigger than the largest current solar installation on the TVA system, the University of Tennessee’s five-megawatt West Tennessee Solar Farm that opened in 2012 in Haywood County, TN.
The Strata Solar projects have been accepted into TVA’s Renewable Standard Offer program, pending an environmental review and interconnection studies that must be completed before construction begins. TVA is accepting public comments on the environmental review online at http://www.tva.com/environment/reports/strata/index.htm through Aug. 13.
Disputes over the use of small-scale solar power are flaring across the nation. At issue in an Iowa lawsuit is whether solar-system marketers can sell electricity in territories where local utilities have exclusive rights to customers.
In TVA territory distributors are forbidden from generating electricity and that extends down to small installations on residential homes. The overall concept of an individual providing some of its own power and selling the rest to the utility company is called net metering.
Net metering or net energy metering (NEM) allows electricity customers who wish to supply their own electricity from on-site generation to pay only for the net energy they obtain from the utility. NEM is primarily used for solar photovoltaic (PV) systems at homes and businesses (other distributed generation (DG) customers may have access as well). Since the output of a PV system may not perfectly match the on-site demand for electricity, a home or business with a PV system will export excess power to the electric grid at some times and import power from the grid at other times. The utilities bill customers only for the net electricity used during each billing period. Alternately, if a customer has produced more electricity than they have consumed, the credit for that net excess generation will be treated according to the NEM policy of the state or utility.
Benefits of distributed solar include:
• PV systems generate the most electricity during the middle of the day when demand is the highest.
• Net metered PV systems reduce the need to expand transmission grid capacity
• Net metering allows for the development of a solar energy market and the jobs that come with it
Currently 44 states plus D.C. have implemented net metering policies. The following map shows the six states that forbid net metering.
Utilities “are proponents of renewable energy,” said Barry Shear, president of Iowa’s Eagle Point Solar LLC, but only “if they own the energy assets and the electrons flow through their grid and they can bill you.”
“The electric utility industry’s preservation of revenues and investor capital will be determined by its success in aligning with the following five consumer mega-trends reshaping the U.S. economy” says Bill Roth President of NCCT, a nationally recognized business coach, economist, ranked as a top-five writer on sustainability and business best practices. To paraphrase his proposed trends as:
1. Consumers are in active pursuit of lower bills,
2. The electric utility industry’s revenues are at risk with a generation that views the industry as missing in action,
3. Today moms manage the household budget. They expect the companies they do business with, including their utility, to provide products and services that align with their values,
4. Electric utilities need to mimic CEOs of major corporations who are adopting sustainability to reduce their operating costs, increase customer alignment and mitigate risks, and
5. Consumer acceptance of cost reducing disruptive technologies that challenge existing utility economic models.
The issue being brought up in this Iowa dispute is the question as to who supplies electric power to residential customers. The dispute can be resolved with changing the economic model of how solar can be integrated into the existing business models of TVA and independently owned utilities. Nobody has to lose. The existing model in our state can be preserved allowing TVA to generate all the electricity selling the power through their distributors who connect the electricity to the residential commercial customers.
The issue now is not who owns the power sources, but how we raise the funds for solar farms and distributed solar needs. The answer maybe to apply the economic model of micro-investments.
The model published in the July/August issue of Solar Today, addresses the existing barriers through the following channels.
• The income will be generated by residential customers who are interested in improving their environment as well as income generation.
• TVA will manage all future solar installations in cooperation with their distributors.
• Income from the sale of solar power will be channeled from TVA and it’s distributors to the residential investor.
• TVA and its distributors will be responsible for the operation and maintenance of all solar generation where the cost for the O&M will come from the profits of solar sales.
• Home owners and businesses that sign up for the program will agree to compensate the distributors for the cost of maintaining and upgrading the distribution system.
• For distributed generation TVA will compensate the owner of the property for renting their roof.
The essence of the model is discussed in the Solar Today article which can be retrieved at the American Solar Energy Society (ASES) website
For years, power companies have watched warily as solar panels have sprouted across the nation’s rooftops. Now, in almost panicked tones, they are fighting hard to slow the spread. And yet, to hear executives tell it, such power sources could ultimately threaten traditional utilities’ ability to maintain the nation’s grid. The battle is playing out among energy executives, lawmakers and regulators across the country. At the heart of the fight is a credit system called net metering, which pays residential and commercial customers for excess renewable energy they sell back to utilities. Currently, 43 states, the District of Columbia and 4 territories offer a form of the incentive, according to the Energy Department.
Many utilities cling to their established business, and its centralized distribution of energy, until they can figure out a new way to make money. It is a question the Obama administration is grappling with as well as it promotes the integration of more renewable energy into the grid. “I see an opportunity for us to recreate ourselves, just like the telecommunications industry did,” Michael W. Yackira, chief executive of NV Energy, a Nevada utility, and chairman of the industry group the Edison Electric Institute, said at the group’s convention. But utility executives say that when solar customers no longer pay for electricity, they also stop paying for the grid, shifting those costs to other customers.
Utilities generally make their profits by making investments in infrastructure and designing customer rates to earn that money back with a guaranteed return, set on average at about 10 percent. A handful of utilities have taken a different approach and are instead getting into the business of developing rooftop systems themselves. Dominion, for example, is running a pilot program in Virginia in which it leases roof space from commercial customers and installs its own panels to study the benefits of a decentralized generation.
Featured in the July/August issue of Solar Today Magazine is our remedy for this issue. Solar energy through micro-investing could be a solution for both the utility company and the customer. The individual or business would invest in solar energy with a small monthly purchase, perhaps $5 per month, using the micro-investment plan. This would provide opportunities to for all rate payers to invest in solar projects that would directly benefit them through lower electricity rates and return on investment. It overcomes the financing and siting obstacles that can keep would-be investors on the sidelines. As an example, if all TVA ratepayers became micro-investors at a rate of $5 per month, each year TVA would generate $135 million for constructing solar farms. This model protects everyone’s interest.
I have called TVA board information and requested when public comment will be accepted for this meeting. TVA will open the online speaking registry on the TVA board webpage one week before the board is scheduled to meet, which is tentatively set for Thursday, Aug. 22.
The agenda will also be posted at that time.
Please send board correspondence to:
TVA Board of Directors
400 West Summit Hill Drive WT 6
Knoxville, TN 37914
You may also email board services at email@example.com.
public listening session which begins at 8:30 a.m. EDT
That solar power is also more expensive for TVA, which buys it at market rate plus a premium rate of 8 cents. The premium above market rate goes directly from TVA to the providers that sell it to a local utility.
For the 2013 slate of projects, TVA has decided to reopen applications for 2.5 megawatts in the Green Power program.
The Tennessee chapter of the Solar Energy Industry Association is urging TVA directors to drop the system of caps based on the calendar year in both programs.
Steve Johnson, the president of LightWave Solar, the provider that has an office in Memphis, estimated the 2.5 megawatts is enough capacity to last about a day. The association had been hoping for 5 megawatts to be back on the market as what it termed “a stopgap measure to prevent workforce erosion and business impacts in the short term.”
“Consumer demand for solar energy has grown faster than TVA’s ability to adjust, therefore leaving the market underserved, restricting the investment of private capital and creating unnecessary uncertainty for businesses,” said Gil Hough, president of the Tennessee chapter in calling for a “fair and market driven” approach to solar energy development.
But there are market pressures TVA is taking into account that are also factors for those in the solar energy industry. TVA spokesman Duncan Mansfield said that, just because TVA has filled its capacity in Green Power Providers does not mean TVA is turning down any further solar generation.
“It just means we don’t have any more money for incentives this year. We still have plenty of capacity to buy solar power at market rates,” he said.
Mansfield noted that TVA recently signed agreements with Pickwick Electric Cooperative to develop the two largest solar energy installations in the state in Selmer. The two 20-megawatt solar farm projects will sell electricity to TVA at a market rate of 8 to 9 cents per kilowatt-hour instead of the 19 cents per kilowatt-hour that TVA pays through Green Power Providers.
When it’s just a quarter or a half of one percent of a utility’s customers that have their own PV and are selling their solar power to the grid at the retail rate, the utility doesn’t care. But energy storage and PV panel costs are dropping, and once that percentage of utility customers’ that are zeroing out their bill goes to 5, 10 or 15 percent then “it’s a big deal” said Chu.
Chu said he told utilities that PV and energy storage is going to come and they should “form a new business model” NOW so that what today is a potential revenue loss, could become an area of growth for them in the future. Plus, he said this model would eventually lead to a more stable grid for us all.
TSEA’s suggested micro-investment model suggested for TVA would complement the distributor’s suggested model, supplying solar energy at the most affordable prices with ownership of large solar farms in the hands of the ratepayer investors. The TSEA model avoids having to loan money from banks; instead, it will earn interest on the monies deposited in investments increasing the income the ratepayer investors make. The question is whether TVA and its distributors will accept these business model changes.