NASHVILLE -- The Tennessee Valley Authority is placing a moratorium on a popular program that pays homeowners and businesses that generate electricity from solar energy.
The Tennessean reports about $31 million has been spent or committed of the $50 million originally allocated to the Generation Partners program. And the agency has more than $100 million in applications pending.
TVA has promoted the program as evidence of its commitment to nonpolluting energy sources, but on Wednesday officials announced the moratorium in a meeting with a group of distributors that administer the program.
"We were shocked," Nashville Electric Service's Jim Purcell said. "We just signed a brand-new agreement in April that we thought positioned us for years."
TVA Senior Project Manager Susan Curtis said the moratorium is temporary while TVA works with distributors to revamp the program.
One problem: Large commercial projects have taken advantage of the program, leaving less money available for the small businesses and homeowners who are a main target of the program.
Curtis said independent power producers that do large projects were cut off from eligibility this year and further adjustments will be considered.
"The market is changing so quickly and we're learning a lot," she said.
Generation Partners began in 2003 as a pilot program. As of this spring, it was offering $1,000 toward a solar electric system and homeowners were given a credit on their electric bills of 12 cents per kilowatt hour generated on top of the retail cost of the electricity.
Power companies in Alabama, Georgia, Kentucky, Mississippi, and Tennessee were listed on the TVA website as participants in the Generation Partners program. TVA also serves parts of North Carolina and Virginia.
About 200 participants had joined the program before April, when new incentives and a new process to make financing easier were put in place. Seventy-five new application have been received since then.
Steve Johnson, with LightWave Solar Electric, said the program has helped his company grow from one person to 18, with a new hire coming in next week.
Without the incentives, fewer people will buy and install solar panels, he said, and jobs could be lost.
"They're spending $3 billion cleaning up from coal," Johnson said, referring to the cleanup costs from the December 2008 coal ash spill at TVA's Kingston plant. "This $50 million is a drop in the bucket. It would be nice if we had a $3 billion budget because we would actually be producing electricity with it -- cleanly."