As far as the solar market is concerned, these days the US state of Georgia looks like a throwback to an earlier era when even the smallest installations created precedence, and where significant projects were shaped more by committed individuals than by established corporations.
On a former cotton farm in Social Circle, a rural town outside Atlanta, a 30 MW project is showing how the state is slowly laying the groundwork for its biggest utility-scale developments yet.
The Georgia Market
The lack of a state mandate and traditionally low electricity prices have made Georgia a difficult market to crack for solar developers. According to the Georgia Solar Energy Association (GSEA), the state has only about 18 MW installed.
Mostly residential rooftop installations, it also includes more than 5 MW through Georgia Power’s Green Energy program, which connects customers who want to pay a premium for clean power with those who agree to put it on their own roof. Georgia Power will then pay about US$0.17/kWh for that electricity, a rate about three times higher than the utility pays for other sources of power.
The programme, though, is pretty well maxed out, said company spokesperson Lynn Wallace, unless more customers sign up to buy blocks of clean power. Until that happens, no new rooftop installations will be added into the programme. Right now, only about 4000 of the state’s 2.4 million customers have agreed to put solar on their roof.
Even with plummeting PV prices, solar remains far more expensive than the state’s dominant sources – coal, nuclear and natural gas. Coal, which makes up about 62% of the state’s 16,587 MW of installed capacity, is facing an uncertain fate as new federal regulations threaten to shut down many of the older plants across the nation. The state is already making provisions for a transition to natural gas, which with oil represents about 13% of the state’s current capacity. There’s also a strong future for nuclear, which currently accounts for 23%, and the state plans to add more.
From Georgia Power’s prospective, the state’s new energy needs are pretty well met, and they don’t see a significant role for solar unless factors change. But the utility, which covers all but four of the state’s 159 counties, is adamant that it will continue to look to add solar to its mix, but only as long as it doesn’t drive up costs for its customers.
With a state legislature reticent to adopt a renewable energy mandate and a dominant utility taking a cautious approach on pricing, it’s been up to individuals to push the market into new directions.
Steve Ivey is turning his farmland in Social Circle – developed to grow cotton in the 1930s by his grandparents – into the state’s largest solar development. Unwilling to dump money into high-intensity farming, Ivey considered what his family plot did have – flat, open land and a substation put in by Georgia Power in 1972. That meshed perfectly with Georgia’s solid solar resource.
So in 2010, Ivey started putting together his vision to use the land for the 30 MW Simon Solar Farm, which is expected to be the state’s first large-scale solar development. By February of the next year he was ready to pitch the concept to the Georgia Public Service Commission (PSC), Georgia Power, the Walton County Commissioners, and Governor Nathan Deal. Georgia PSC issued a recommendation that Georgia Power look for ways to add more solar to its portfolio. The utility, which covers most of the state, sought bids for projects that would total 50 MW of utility-scale generation. Ivey submitted his project, and it was selected in September 2011.
In the end, Georgia Power agreed to long-term power purchase agreements (PPAs) with two developers: Ivey and Solar Design & Development (Solar D&D). Terms were not disclosed for either PPA. Ivey’s project, which started out at 20 MW utilising single-axis trackers, was bumped to 30 MW of fixed-plate PV, a reflection on the plummeting price of panels. Solar D&D, meanwhile, is developing 19 MW of solar capacity in a series of projects across the state. The company also recently flipped the switch on a 1 MW project in Upton County that will officially be included in the state’s Green Energy programme.
Simon Solar Farm is working with Phoenix Solar, which will design, build and operate the development. The project was able to qualify some of its expenses under the 1603 Treasury grant, though the tax credit benefits proved just as lucrative. The development has yet to purchase the panels that will be used, mostly because the unsettled market and steep drop in pricing is turning the process into a waiting game.
Right now, Simon Solar Farm is finalising its interconnections study in conjunction with Georgia Power and the Georgia Transportation Commission. Once building begins, it should take about six to nine months to complete. Based on Georgia Power’s projections, the solar resources aren’t needed until 2015, so the contracts are structured to begin purchasing the power by June of that year. Beyond that, the utility doesn’t have plans to buy solar power from any major projects.
…and the Small
Dr Sidney Smith says he was the first customer to sign up to Georgia Power’s Green Energy programme with a 4 kW installation at his home in Tybee Island about 12 years ago. Five years later, he says he became the programme’s first large rooftop customer with a 30 kW installation.
But his landmark installation completed early this year powers about 10% of a popular café in Savannah. The system is small, but its implications could be huge. Smith helped start Lower Rates for Customers, LLC, the company that installed the system on the café’s private property. Smith’s company then agreed to sell the café electricity at 1% below the average cost to Georgia Power ratepayers. This has put the companies in a standoff.
In Georgia third-party financing is not allowed, mostly because Georgia Power says it violates the state’s Territorial Act, making it technically illegal. However, utility critics say the legislation was written in a different time, and that Georgia Power’s reliance on the law is merely a prudent way for it to ensure its long-term profits.
Wallace says it is unfair for third-party companies to build a power generation system on private land and sell it to that landowner because the installation will eventually use infrastructure paid for by the utilities’ ratepayers. But Smith contends the systems he’s planning to build will serve only on-site needs.
The goal, according to Smith, is to find solutions that give customers energy independence. Part of that effort has been to stir Georgia Power into filing a lawsuit that would put this issue in the hands of the court. In fact, the name of the company was crafted so that an eventual lawsuit would read ‘Georgia Power v. Lower Rates for Customers’. So far Georgia Power hasn’t filed any suits, and legislators have not been able to push a bill to the governor’s desk.