KNOXVILLE -- 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.
"Tennessee had the 14th largest job-producing solar industry in the country, but we've got to keep it going," said Mary Mastin, the Tennessee chapter head of the Sierra Club's Repower Committee. "In the short term, TVA needs to at least double the capacity (of Green Power Providers)."
TVA trails neighboring Georgia Power and Duke Energy in the amount of solar-generated power it is now buying.
"The boom and bust cycle that TVA is creating will stunt solar growth in the Valley and leave Tennessee behind in renewable power," said Steven Greer of the Statewide Organizing for Community eMpowerment.
While TVA is buying less solar-generated power than some utilities, it is paying higher premiums for some of its solar-generated power. For solar projects up to 50 kilowatts, TVA initially paid a 12 cents per kilowatt-hour premium above the market rate for such power and now pays 9 cents per kwh above the market price. Such incentives are likely to be reduced but they will continue for 20 years under the 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.
Contact Dave Flessner at email@example.com or at 757-6340.