Solar industry calls for market driven approach to TVA solar programs

Industry group urges TVA to reconfigure solar programs to meet market demand, retain workforce and enable clean, low cost energy in the Valley

Knoxville, Tenn.—TenneSEIA, the state business association representing the solar industry, responded to the closure of TVA's solar programs today by publically urging the authority to abandon the practice of setting arbitrary calendar year caps on solar installations and instead, adopt a market driven model that decreases incentives based on the amount of solar installed and incorporates the value of solar energy into the budgeting process. TenneSEIA hopes to resolve these issues prior to the TVA Board of Directors voting on the 2014 budget at its August 22nd meeting in Knoxville.


"Consumer demand for solar energy has grown faster than TVA's ability to adjust, therefore leaving the market underserved, restricting the investment of private capital and creating unnecessary uncertainty for businesses," said Gil Hough, president of TenneSEIA. "TenneSEIA is committed to working with TVA to create a fair and market driven approach to solar energy development in the Valley."

TenneSEIA quickly sprang into action to work with TVA after the April 24th program closure announcement.

TenneSEIA requested two main actions from TVA over the course of email correspondence and two meetings with executives: 1) Immediately address shortcomings in the Green Power Providers program that pose significant and unnecessary threats to the industry and 2) develop a market based approach to solar energy development in Tennessee.

TVA announced its response to TenneSEIA's recommendations at a solar stakeholder meeting last week. TVA agreed to add an additional 2.5 megawatts of unused capacity back into the Green Power Providers program effective August 1st. TenneSEIA requested five megawatts for the remainder of 2013 as a stopgap measure to prevent workforce erosion and business impacts in the short term.

TVA also announced it was open to discussing a market based approach for solar energy development in the Tennessee Valley and suggested a July 23, 2013 meeting date as a next step. Specifically, TenneSEIA requested:

1.TVA abandon the practice of using an arbitrary, calendar year model for solar energy development.

2.Adopt a market driven approach for solar energy development that does not close or place caps on the solar program. Instead, create a program where incentives decrease based on the total amount of solar installed, as TenneSEIA outlined in a 2011 memo to TVA's Board of Directors.

3.Account for the true value of solar energy during the budget process and when developing solar programs. Nationally recognized electricity industry expert, Karl Rábago, explained during a TenneSEIA stakeholder meeting last week 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.

"TenneSEIA is grateful for TVA's willingness to work with the industry, and we hope we can use this experience as a launching point for a robust and meaningful collaboration with TVA," said Steve Johnson, president of LightWave Solar with offices in Memphis, Nashville and Johnson City.

Johnson says the demand for solar energy is so high that the additional 2.5 megawatts of unused capacity will last for just one day. Proving, Johnson says, that TVA's caps for solar energy are too low and the market is underserved. That is the kind of uncertainty and boom-bust cycle TenneSEIA wants to prevent with future solar programs coming out of TVA.

"Solar energy development programs should never close, consumers should never be denied access to the market and they should be fairly compensated for investing their own, private capital into generating electricity for a utility," said John Nevel, a CPA and managing director of The Boro Group. Nevel also serves on TenneSEIA's board of directors.

A market-based model for solar energy development takes into account the value solar energy provides a utility by avoiding costs it would incur if the utility had built that same capacity itself, instead of relying on private capital to build and maintain the power source, like solar energy.

Also, 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.

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.

To interview a TenneSEIA member or board member about the economic impact of Tennessee's solar energy industry and the Green Power Providers program, contact Gil Hough, President of TenneSEIA at (865) 789-5482 or Cortney Piper at 865-789-2669 or cortney@piper-communications.com

About TenneSEIA
TenneSEIA is the state chapter for the national Solar Energy Industries Association, and represents the interests of the solar energy industry in Tennessee. The mission of TenneSEIA is to make solar energy a mainstream energy source and realize the full potential of the solar industry in Tennessee. The Association serves as the primary advocacy group for the solar industry in Tennessee.

For more information about TenneSEIA, please visit www.tenneseiasolar.com.

For more information about the United States solar market, click here to read the 2012 Solar Market Insight Report: http://www.greentechmedia.com/articles/read/the-us-accounted-11-percent-of-the-global-solar-market-in-2012

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