Solar demand in Tennessee exceeds TVA cap in less than one day
Industry group urges TVA board to increase solar program capacity, align solar programs with market demand
August 2, 2013—Three members of TenneSEIA, the state business association representing the solar industry, exceeded TVA’s addition of 2.5 megawatts of solar energy into the Green Power Providers program by 20% yesterday—representing only three of the estimated 64 solar installers in the state and demonstrating that TVA’s solar programs restrict the investment of private capital and do not meet market demand. TVA opened and closed its solar programAugust 1st, after TenneSEIA requested in May the utility reopen the program this year.
TenneSEIA is urging TVA’s Board of Directors to increase the amount of solar energy TVA makes available to the market prior to the board voting on the 2014 budget at its August 22nd meeting in Knoxville.
"TVA’s current program for solar energy development leaves the market underserved and as a result, it creates a boom-bust cycle for the industry,” said Gil Hough, president of TenneSEIA. “There is a proven, market based remedy for the unintended and unnecessary risks to businesses and jobs that TVA’s current solar development program provides and TenneSEIA looks forward to exploring those options with TVA management and its board of directors.”
TenneSIEA responded to the closure of TVA’s solar programs in April 2013by providing a series of recommendations to TVA. Primarily, TenneSEIA urged the authority to abandon the practice of setting arbitrary calendar year caps on solar installations and adopt a market driven model that decreases incentives based on the total amount of solar installed and incorporates the value of solar energy, which can apply downward pressure to rates, into the budgeting process.
TVA responded by adding 2.5 megawatts of unused solar capacity from the previous cap, back into the Green Power Providers on August 1, 2013 for the remainder of 2013. TVA also agreed to discuss a more market driven approach to solar energy development in the Valley with TenneSEIA at a July 23, 2013 meeting.
“We knew the 2.5 megawatts would be inadequate to meet demand for solar energy in Tennessee and it was, ” said Steve Johnson, president of LightWave Solar with offices in Nashville and Memphis. ARiES Energy and Green Earth Solar are TenneSEIA’s other members that together exceeded the 2.5 megawatt cap on the first day Green Power Providers was reopened.
“Tennesseans want to invest their own, private capital to build, operate and maintain clean energy generation for TVA and they cannot because TVA’s solar programs are closed. Consumers should be fairly compensated for investing their own, private capital into generating electricity for a utility,” added Johnson.
TVA and TenneSEIA, along with other industry stakeholders met on July 23, 2013 to discuss the unnecessary risks TVA’s current solar programs create for Tennessee’s businesses and workforce.
“The meeting was informative and TenneSEIA appreciates TVA’s engagement of the stakeholders in determining an optimal design for the 2014 solar programs,” said Hough. “However, TenneSEIA is concerned that TVA’s management lacks the guidance and resources necessary to sustain the development of the solar industry. Therefore, TenneSEIA has reached out to the board of directors to support the immediate and long-term interests of the solar industry, public, and TVA. All three elements are critical, however the most pressing issue is the first – to increase the capacity of the TVA solar program offerings in 2014 – as it is impacted by the immediate budget process.”
TenneSEIA requested that TVA account for the true value of solar energy during the budget process and while developing programs for 2014. Nationally recognized electricity industry expert, Karl Rábago, explained during a TenneSEIA stakeholder meeting in June that solar energy can apply downward pressure on electricity rates because of the value it provides utilities. That value comes in the form of avoided cost of fuel, infrastructure and capital investment. Not to mention the environmental attributes and Solar Renewable Energy Credits (SREC) TVA receives that are tradable, non-tangible energy commodities that represent proof that 1megawatt-hour (MWh) of electricity was generated from an eligible renewable energy resource.
Market based approaches for solar energy development decrease incentives based on the total megawatts of solar energy installed, rather than closing the program completely. This kind of approach aligns supply and demand with the decreasing costs of installing solar instead of arbitrarily aligning solar programs with a budget cycle or calendar year. (Click here to read 2011 memo to TVA Board of Directors outlining the approach.)
To put solar energy generation into perspective, it would take 200 years, at a rate of 20 megawatts of solar installed per year, to bring solar energy to just five percent of TVA’s generation portfolio.