From the Atlanta Business Chronicle:
Measured excitement raced through the solar industry last week after a member of the
Georgia Public Service Commission released a statement recommending the Commission
— as well as Georgia legislators, solar industry experts and the state’s largest utility,
Georgia Power — immediately “investigate and implement needed changes” in policy
regarding solar energy.
On Oct. 18, 2011, Lauren “Bubba” McDonald wrote that despite being “the 3rd-5th best
State for solar energy in the USA,” Georgia ranks 35th in actual solar installs, even though
the cost of panels has decreased 33 percent in “only 10 months.” Commissioner McDonald
found this unacceptable. He wrote that the solar industry is providing the state with “an
outstanding opportunity to supplement our fossil and nuclear power sources while
creating good jobs and immediately assisting in GA’s recovery,” but to do so, “accurate
information must be used so Georgia can close the solar gap with other states.”
To help close this gap, Commissioner McDonald proposed the Georgia Public Service
Commission investigate adopting a state renewable portfolio standard, combined with
renewable energy credits.
A renewable portfolio standard (“RPS”) is a state regulation that requires electric utilities
to either produce a percentage of their electricity from renewable energy sources (such as
solar, biomass and wind), or to buy renewable electricity from other producers.
According to the U.S. Department of Energy, 24 states and the District of Columbia,
including the Southern states of North Carolina and Texas, have an RPS in place. Five
other states — North Dakota, South Dakota, Utah, Virginia and Vermont — have
nonbinding goals for renewable energy. Together these states account for more than half
of the electricity sales in the United States. Unsurprisingly, the majority of the growth in
the solar industry has occurred in these states.
In the past year, domestic solar manufacturing jobs increased by 25 percent and job
growth industry-wide grew at 6.8 percent, as compared to 0.7 percent domestic job
growth overall. The total market value of the American solar energy industry also grew 67
percent — from $3.6 billion in 2009 to $6 billion in 2010.
Yet that money and those jobs are not coming to Georgia. Hopefully Commissioner
McDonald’s statements regarding an RPS for Georgia will lead to productive changes in
the way Georgia approaches solar energy. Certainly, a more proactive policy is needed for
Georgia to be competitive with its neighbors and the rest of the country.
For example, state policy should favor the preferred financing mechanism across the
country — the power purchase agreement or PPA. A PPA is a contract between two
parties that allows a property owner/electricity user to utilize third-party financing to
construct a solar system. PPAs generally provide that a third-party developer pays for and
owns the solar system, and receives its payment through the sale of electricity from the
system to the property owner/electricity user at a set rate.
In Georgia, however, many utilities threaten legal action against those wishing to use this
method of financing, arguing such a contract between independent parties is illegal.
A plain reading of Georgia statutory law shows this argument is without merit. In 2001,
the General Assembly enacted the Cogeneration and Distributed Generation Act, which
expressly states “that it is in the public interest to: (1) Encourage private investment in
renewable energy resources; (2) Stimulate the economic growth of Georgia; and (3)
Enhance the continued diversification of the energy resources used in Georgia.” Clearly
Georgia’s legislature intended to expand, not restrict, customer choice with renewable
energy.
Could the eclipse over solar in this sunny state really be moving? There are strong positive
rays coming through, but it is clear that more forward momentum is necessary.
Since 2008, more than $6 billion has been invested nationwide in solar, but only 1 percent
of this growth was in Georgia. What every business person and legislator should be asking
is how can this gap be closed so we can see more money and economic growth come into
the state. A renewable portfolio standard is a great start.