Solar gains ground in Southeast as programs in Ga. and S.C. build momentum

Georgia is adding so much solar to the power grid this year that the state could rank in the top five for solar installations by the end of 2014, according to Rhone Resch, president and CEO of the Solar Energy Industries Association, an industry trade group.

This comes from a once coal-heavy state, resistant to renewables. Georgia had 11 megawatts of solar on the grid in 2012, Resch said. A little more than 90 MW was added last year, putting the state at No. 7 in installations.

Resch credits the rapid development with two things: a grass-roots effort from the state's solar entrepreneurs -- which shifted the conversation away from an environmental issue to one that focused on the economy and jobs -- and Georgia Power's solar program, created in 2012 and expanded last year at the urging of state utility regulators.

The program will add hundreds of megawatts of utility-scale and rooftop solar to the grid each year for the next few years.

More than 1,200 applications were submitted recently for one portion of Georgia Power's solar program, clearly showing pent-up demand to put more solar on the grid.


"Maybe Georgia was the blockage for the Southeast for a long time," said Resch in an interview with EnergyWire. "Georgia has become the anchor of the Southeast that is going to open up."

In North Carolina, Duke Energy Corp. recently received triple the amount of proposals for 300 MW of solar projects. Duke has to have 6 percent of its retail sales of electricity come from renewable fuels or energy efficiency by 2015, as part of a state's renewable portfolio standard.

"We need new solar and new renewables; solar has been the most attractive option," spokesman Randy Wheeless said.

But as some states in the Southeast are breaking down barriers to add more solar to the grid, that is creating new tensions between utilities and some environmental groups over how that should be done.

At issue is how much the Southeast's major utilities can maintain control over the power grid, ever slowly moving away from a centralized system fueled by major power plants to one supported by small clusters of solar arrays.

The center of that debate is how much solar is a benefit and a cost to utilities and consumers. There's also the question of who is allowed to compete in the Southeast's fledgling renewable energy market and sell electricity.

Tug and pull

Resch ticked off the list of examples ratcheting up the arguments between utilities and solar advocates: caps on net metering, tariffs and charges for solar users, and utilities paying a lower rate for net metering as compared with utility-scale solar.

"Frankly, there are probably 10 or 12 other games that the utilities are using to try and shut down the use of solar, but that's fine; that's kind of the natural reaction you'd expect to see from utilities," said Resch, who was in Atlanta last week to meet with the Georgia chapter of SEIA's board. "I think there's also utilities who are trying to figure out 'How do we make money off of solar?'"

In North Carolina, for example, Duke Energy is considering asking regulators to reduce the amount they pay residents and businesses for excess capacity from their rooftop solar arrays. The utility argues that they are paying the full retail rate, which is hard to justify as the price of solar continues to fall.

"If you're paying a full retail rate for something that at the best you're going to be able to sell it at a full retail rate, you're shifting the costs to somebody else," Wheeless said.

Avoiding cost shifting from solar users to non-solar users is a frequent argument utilities use to support why their solar programs are structured in a certain way. The idea is to prevent non-solar users from paying more for their electricity and subsidizing grid costs for those who are using solar to heat and light their homes.

Under Georgia Power's program, for example, participants sell their solar power directly to the utility and do not use it to lower their own electricity costs. The utility said its program uniquely values solar. Both parties agree to those terms up front, company spokesman John Kraft said.

"We feel like this gives a proper valuation to solar that's being produced without pushing that onto other customers," Kraft said.

Customers who don't participate in the program can buy solar panels and use them to offset their electricity use. Georgia Power had proposed a tariff for those users to pay the cost of covering backup power when those arrays aren't in use, but pulled it as part of a settlement agreement.

The utility is allowed to propose the tariff again, Kraft said. It's possible that the issue could be raised when the state's Public Service Commission studies the value of solar. It's unclear when that docket will be opened, but industry and PSC officials expect that it will be at some point this year.

'Consensus' in S.C.

"It's always a hotly contested debate," said Georgia PSC Commissioner Chuck Eaton. "Everybody has a different opinion. The company has a value that is lower than what the solar people think, and the solar people say there are tangible and intangible costs."

Florida's largest utility's answer to this debate is a recently announced voluntary community solar program. Florida Power & Light Co. will take bids from local Florida solar installers on the commercial-scale solar farms, which will be between 50 and 100 kilowatts, company spokeswoman Alys Daly said. FPL hopes to have as many as 25 projects across its territory, she said.

The company is not asking the state's Public Service Commission for permission to recoup money for these projects from all of its ratepayers. So customers who want to support the projects can do so via a $9 monthly fee.

Daly said the voluntary contributions will be a way for the utility to gauge consumer interest in solar without making everyone's bills increase.

"It's not subsidized by all of our customer base," she said.

Solar typically works best when distributed throughout the grid in small clusters, which is the opposite of the way that a large, centralized power plant provides electricity. Utilities have resisted adding solar because the distributed generation model threatens their healthy profits.

The large electric companies have been able to maintain a strong foothold by escalating their lobbying and political muscle. But recently, they have warmed up to adding solar to the grid, in part because they've figured out how to own the systems, make money off them or still block certain private solar developers from entering the market.

It is the last scenario that has riled some outside solar advocates over new legislation in South Carolina. The bill would lay the groundwork for solar to flourish in a state where virtually no solar projects have existed outside of a few large arrays.

Some South Carolina leaders have started calling the bill (S.B. 1189) the "consensus" legislation because it was born out of several competing interests -- utilities, environmental advocates, consumer groups, business organizations and nonprofits -- that spent months working on a compromise.

But now a national solar group has made the bill the poster child for utility monopoly control, saying the proposal locks out private companies from competing effectively.

"The utilities have gone to extremes now doing anything they can to stop competition," said Bryan Miller, president of the Alliance for Solar Choice and public policy vice president of California-based SunRun, one of the nation's largest providers of residential solar electricity.

SolarCity and Sungevity are also TASC members.

Those companies install solar systems and sell the electricity at a fixed rate over a number of years, something that is prohibited in South Carolina and most Southeastern states.

"I think they think we are going to push all of the developers out of the market," said Marcus Harris, general manager of renewable energy, products and services for South Carolina Electric & Gas. "That's the biggest criticism, that the utilities are going to build the solar arrays ourselves."

Fla. solar push fails

The attitude from most of the state's solar community is similar to that of others in the Southeast: Take baby steps forward, or there will be no steps at all.

"We have to do it in a way that the utilities are comfortable with and the solar companies are comfortable with," said Grant Reeves, president of the S.C. Solar Business Alliance. "The question for South Carolina is: Is the framework that we have in place with all of the stakeholders better than having a stalemate and going dormant for another year?"

The bill needs to pass the full Senate by the end of the month, but with lawmakers only meeting a couple of days each week until then, some are skeptical that will happen.

It's not the first example of a promising solar bill in the Southeast that has been slowed or blocked this year. In Florida, a proposed constitutional amendment to extend a property tax abatement for solar panels and renewable projects to commercial and all real property was stopped in its first House committee.

That helped give more ammunition to environmental groups to criticize Florida for lagging in renewable energy development. In recent weeks, the Sierra Club and Southern Alliance for Clean Energy have held separate protests, called out the state's major utilities on using campaign donations to block solar legislation and held a solar rally at the state Capitol.

SACE commissioned nonpartisan watchdog group Integrity Florida to tally lobbying dollars from Florida's four major investor-owned utilities over the past five years. The results -- showing hundreds of lobbyists hired and millions paid out in campaign donations -- have ignited a firestorm between the environmental group and Florida's largest utility, Florida Power & Light Co.

SACE uses the failed solar tax abatement amendment as one example, arguing that the proposal was one of the only tax measures that got immediately stopped during this legislative session that is centered around tax relief and tax reform.

"It shows there are unnatural forces at work, and then you begin to actually see what's the corrupting influence there that's holding the state back," said Stephen Smith, SACE's executive director.

FPL calls SACE's report an example of "divisive politics."

"It's ironic that an organization calling itself 'Integrity Florida' would accept cash from an anti-utility group out of Tennessee to produce a sloppy attack on Florida utilities," FPL spokesman Mark Bubriski said.

FPL has a total of 110 megawatts of solar in the form of three utility-scale projects as well as smaller arrays at schools. The utility announced its community solar program just days after the property tax abatement measure died in committee.

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