The federal utility launched the program about 10 years ago to boost the solar industry in Tennessee. It allows generators of solar power to connect to the electrical grid and sell back the power they produce at a higher-than-market rate.
The Tennessean reports that energy firms and conservation groups now say the program has begun to stifle the solar industry because TVA caps the amount of power it will buy at a rate that is well below the demand.
“Capacity is being snapped up, and people are clamoring for the program,” said Nathan Moore, senior attorney in Nashville for the Southern Environmental Law Center, which follows the industry closely. “The problem is as these programs close, what we’re seeing is the market being artificially constrained.”
TVA says the cap is necessary to keep energy costs down for customers.
“TVA must carefully balance competing interests when buying renewable energy at prices above other generation sources because this cost difference is passed on to 9 million power consumers,” TVA spokesman Scott Brooks said. “No matter what we do, we still have to answer to the ratepayers.”
The utility provides power to about 9 million people in Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia.
TVA received 343 applications last month when it opened its Green Power Providers program last month to fill a small amount of capacity, but was able to accept only 116 of them.
“They keep dangling this carrot in front of you, and then they take it away,” said Darren Metz, CEO of Novacopy, a Nashville-based distributor of commercial printers and copiers that wants to get into the program.
Solar advocates say the stop-start nature of the program makes it difficult for businesses and homeowners to plan solar projects and the uncertainty is jeopardizing the long-term health of the industry.
“This type of management is crippling the industry,” said Steve Johnson, who runs Antioch-based solar panel installation firm LightWave Solar. “We don’t have any way of planning.”
Moore said TVA spends $25 million on the premium, which isn’t a large amount compared to its overall budget.
“We would like to see TVA fund this program in a way that’s consistent with their vision to be a renewable energy leader in the Southeast,” Moore said.