Solar company criticizes TVA power purchase program

Published May 3, 2013

By Thomas Bailey Jr.
Wednesday, May 1, 2013
A Nashville-based company that designs and installs solar-power systems claims TVA is hurting the fledgling industry by the way it administers its solar-incentive program.
LightWave Solar, which recently opened a Memphis office at 6349 Summer, says much of the solar-power capacity TVA has said it is willing to buy is not being tapped despite ample interest from residents, business and institutions that want to generate it.
“The fact is this: They are bragging about their program and it’s not working and it’s restricting private citizens in Tennessee who want to install solar plants,” said Steve Johnson, president of LightWave Solar. It’s the same firm that early last year built the million kilowatt solar farm at Agricenter International.
During the last three months of 2012, TVA started its newest incentive program, Green Power Providers. TVA offered to pay 12 cents for each kilowatt produced by the solar power systems of residents, businesses and institutions. The multistate agency capped the total amount it would buy at 2.5 megawatts (2,500 kilowatts).
The utility compensates for the solar power by reducing the customer’s power bill according to how much power the customer’s solar installation created.
Applicants, who quickly claimed all the capacity late last year, were given six months to build their installations or lose the incentive.
Problem is, the deadline is passing and 80 to 85 percent of the claimed capacity is not being built, Johnson said. He blamed speculators for gobbling up the capacity with their applications even though they were basically salesmen who did not have the ability to build the projects.
LightWave Solar fears a similar fate for the 2013 Green Power Providers program, which has a capacity of 7.5 megawatts. In this year’s program, TVA will pay 9 cents per kilowatt of solar power.
By April, applicants already had claimed the year’s capacity, and LightWave suspects that, again, most of the potential generation won’t be built because of speculators.
TVA spokesman Chris Stanley expressed confidence that most if not all the capacity will be used, both for 7.5 megawatt program for 2013 and for the 2.5 megawatt program for the last quarter of 2012.
If projects aren’t built by the six-month deadlines, he said, “depending on the size of the project, if there were some megawatts — some power — left, we’ll put that back out and people can resubmit.”
The agency will know in June how much unused capacity will be made available again for 2013. Project applications from the last quarter of 2012 also are reaching deadlines now.
“The intention is to use all the capacity, or very close to it,” Stanley said. “If it comes down to one very, very small project, then we probably wouldn’t use it.
“It’s why we have six-month contracts in place, to have the ability to put it online within a good quick time-frame … so we know what’s available for others.”
A typical solar installation of 50 kilowatts for a business costs $150,000 on average, and a typical installation of 5.5 kilowatts for a residence costs about $20,000, Johnson said.
A simple solution to preventing speculative or less-than-serious applications is to require the applicant to include a copy of a deposit check made out to installers such as LightWave Solar, Johnson said.
Meanwhile, TVA’s handling of its programs is making it difficult for solar-based businesses, he said. It will now be sometime in June or later before they can tell potential customers whether room has been freed up to apply for the Green Power Providers.
“Two months is a long time not to bring new jobs,” Johnson said. “It will hit our sales staff immediately. And down the line, we’ll have a two-month hold on installation schedules that will hit designers and installers. It just makes a very rough environment unnecessarily.’’
TVA’s goal has been to create between 1,500 to 2,500 megawatts of renewable energy by 2020, Stanley said. Already, the agency has surpassed 1,600 megawatts, he said.