TVA & LPCs are working against rooftop solar in a new way

Published April 18, 2016

As you probably know, TVA’s 2016 Green Power Providers (GPP) program is for small-scale residential and commercial solar projects of 50kW or less. Under the program, TVA buys 100% of solar generation at the escalating retail rate for 20 years. This is a good deal for homeowners and business owners who want to install solar. Unfortunately, TVA severely limits the program in overall capacity – only 10 MW total with 5MW for commercial projects and 5MW residential projects. As of May 6, 4.6 MW has already been applied for, and most of it is for commercial projects.  Only about 30 percent of the commercial capacity remains, and we expect the program to close well before the end of the year.

LightWave Solar installed 50kW for Rx Med in Lebanon, TN. This is the largest system allowed in TVA’s GPP program.
LightWave Solar installed 50kW for Rx Med in Lebanon, TN. This is the largest system allowed in TVA’s GPP program.

The best part of the GPP program is that TVA will buy 100% of solar generation at the escalating retail rate for 20 years. Over the last 10 years, the cost of electricity in Tennessee has increased over 4 percent each year. According to the U.S. EIA, commercial rates in Tennessee have gone up 4.2 percent each year on average between 2005 and 2015. For residential customers, rates have increased 4.8 percent each year on average. As electric rates increase, solar electricity becomes that much more valuable.

However, since 2010 in Tennessee, electric rates have increased only about 1 percent each year for both commercial and residential customers. Even still, electric bills are on the rise. TVA and local power companies are “keeping rates low” while increasing monthly service fees and adding new demand charges, which solar generation cannot affect as much (none whatsoever under the TVA’s GPP program). Keeping electric rates low while increasing overall electric bills with fees appears to be a deliberate effort to minimize the value of solar in order to limit rooftop solar adoption.

TVA clearly recognizes the value of solar generation. Just last month TVA green lighted 16.7MW of solar project applications from local power companies. Earlier this year, TVA announced they would buy solar generation from an 80MW solar facility in Colbert, Alabama, near a recently retired coal plant. But just as TVA contracts with more utility-scale solar, there seems to be an organized effort to severely limit private businesses and homeowners from investing in rooftop solar by way of small, arbitrary program caps and system size limits, and now the unexplained restructuring of electric bills.

With solar prices at their lowest and with the federal tax credit extended, TVA and our local power companies should not be able to quietly increase electric bills through added monthly fees and new unclear, unverifiable demand charges that discourage clean, distributed generation. If they must increase revenue to cover the cost of providing reliable power to customers, TVA and the local power companies should do it in the usual, transparent way of raising the kWh rate.  This encourages energy efficiency and clean, renewable energy like solar.

We know rates will go up, and it is just a question of how quickly. TVA carries approximately $25 billion in debt, and the billions of dollars spent on coal clean ups and nuclear debacles will likely be felt by ratepayers sooner rather than later. Next time you receive your electric bill, look for the monthly charges and ask your utility to explain any new fees.  Local power companies can be held accountable by their customers, and LightWave Solar appreciates your support to help shine a light on these new anti-solar billing practices!