Tennessee Valley Authority cutting back solar power incentives


BOWLING GREEN, Ky. (AP) — The Tennessee Valley Authority is rethinking the way it treats solar power, and that has some environmentalists and local solar installers worried.

TVA officials say they aren't abandoning solar, but they are dropping a lot of the incentives they have put in place since the utility's solar program started in 2000.

"You can't do that and not expect to kill some of the companies that have been depending on this for the last 10 years and grown up around this," said Gil Hough, president of the Tennessee Solar Energy Industries Association.

Both Hough and Southern Environmental Law Center attorney Amanda Garcia were part of a TVA panel that spent a year and a half helping the nation's largest public utility evaluate solar. They said they felt blindsided by the changes, which they learned about at a stakeholder's meeting.

That's where staff presented a plan that included capping solar incentive programs at just 20 MW in 2016, down from over 130 MW this year.

At a public comment period before a TVA board meeting in Bowling Green on Friday, Garcia was one of several people who encouraged the board to reconsider the changes and to give more weight to the environmental benefits of energy sources that don't emit carbon.

The changes won't be officially announced until mid-December, so some details are unclear, but TVA officials acknowledge that they are moving away from incentives.

Chief Financial Officer John Thomas said in an interview that solar has reached a point where it can compete with other sources of electricity on the open market, so it no longer needs special incentives. For example, last February, the TVA board approved a 20-year contract with NextEra Energy for an 80 MW solar facility in northern Alabama.

Thomas said TVA already is investing $1.6 billion in solar projects over 20 years and has 400 MW of solar either online or in development. Also, the board has approved a goal of adding between 150 and 800 MW of solar by 2023.

CEO Bill Johnson said after the Friday board meeting TVA is shifting to large "utility-scale" projects that offer better economics. The utility plans to turn control of medium-sized projects over to the 155 local power companies that distribute TVA's electricity.

Hough, with the Tennessee Solar Energy Industries Association, said it's unclear if there will be any role for private solar installation companies under that model.

"I don't know what I'm doing for a job next year," he said.

Charles Ebinger is a senior fellow in the Energy, Security and Climate Initiative at the Brookings Institution. He said it's true the smaller companies might not be able to compete if TVA stops incentivizing smaller projects.

"There are winners and losers in all these policy decisions," he said. "I think the critical point is solar really has come down so much that utility-scale solar is competitive in many markets."

Ebinger said what TVA is doing is not an aberration.

"A lot of utilities around the country are recognizing that solar is competitive and as a result don't feel the need to continue subsidies."

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