Solar partners outrun subsidies, so TVA revamps program

Solar partners outrun subsidies, so TVA revamps program

September 7th, 2011 by Pam Sohn in Business Around the Region

TVA has revamped its effort to entice customers to generate their own power after a 12 cents-per-kilowatt-hour premium on solar power proved so popular that the utility was going about $5 million a year in the hole to pay for it.

The trouble, officials said, was that renewable power entrepreneurs and businesses were drying up the contributions from customers who were willing to subsidize solar, wind and other renewable power by paying a few extra cents more for power in TVA's Green Power Switch program.

The Tennessee Valley Authority on Tuesday announced a revamped "Generation Partners" program with a new limit designed to keep the program just for residential and small business use.

The program, put on hold in July, is shifting its maximum project size from 200 kilowatts to 50 kilowatts after Sept. 16.

"We feel it's our obligation to make absolutely sure that this renewable generation option will continue to be available in the future to the residential and small business generators it was originally designed for," said John Trawick, TVA's senior vice president of commercial operations and pricing.

But TVA's action to reduce the size of alternative energy programs eligible for incentives was seen by the Southern Alliance for Clean Energy as a mistake.

"TVA is correct in saying that Generation Partners has been a key element in fueling the growth of the solar industry in Tennessee and neighboring states, but it is incorrect to say that this growth is not sustainable," said the group's executive director, Stephen Smith.

"Last year, TVA scaled the program back from one megawatt to 200 kilowatts. Now, they are further reducing the size to 50 kilowatts," he said. "Today's decision is a step in the wrong direction, and will unfortunately lead to serious negative economic consequences and job loss in the Tennessee Valley."