TVA green initiative outpaces subsidies

TVA's effort to entice customers to generate their own power with renewable sources such as the sun and wind was so successful, the utility is ending the current program and revamping it.

Again.

TVA will close the program, which paid power-generating homeowners and businesses a 12-cent premium per kilowatthour for solar power, as soon as TVA develops a replacement program, said Bob Balzar, vice president for TVA's Energy Efficiency and Demand Response.

The problem is that TVA's Green Power Switch program -- in which some customers volunteer to pay a few cents more for power to subsidize green power initiatives -- can't keep up.

"We [this year] will be between $4 [million] and $5 million out of balance," John Trawick, senior vice president of TVA commercial operations and pricing, said during a news teleconference this week.

"The Green Power Switch program brings in about $3 million a year. The outflow for Generation Partners premiums will be about $8 million," he said.

Officials said they are working on new strategies for both programs. Until then, TVA will honor existing agreements and accept new projects under Generation Partners, which was launched in 2003.

TVA shut down Generation Partners last summer after applications exceeded limits set by the federal utility for the test initiative. The moratorium brought an outcry from solar installers whose businesses had boomed since TVA began offering incentives for solar projects.

A week later, TVA restored the initiative for systems under 200 kilowatts while continuing to re-examine its program requirements for large systems. In the fall, a tweaked program for large systems was reopened.

A 200-kilowatt solar system produces enough energy for about 16 average Tennessee Valley homes or a small school for a year.

A Chattanooga pioneer in solar power systems, Thomas Tripp with Big Frog Mountain, said people finally realize that solar power really does work, and that Tennessee really does have enough sunlight to make it work.

"People are no longer skeptics. They've seen the proof," he said.

The combination of technology advances and incentives such as grants and tax credits have helped push solar power into the mainstream, he said.

"I don't think [TVA] anticipated the change in perception, but now people are figuring out that, like I always said, it really is like putting an oil well on your property," Tripp said.

Balzar said the Generations Partners effort was so successful, 10 of the power distribution companies TVA serves were among the top providers of solar power in the region and nation last year.

Three of those are in the national top 10 for total megawatts added last year by co-ops: North Georgia Electric Membership Corp. in Dalton, Ga.; Tri-State Electric Membership Corp. in Blue Ridge, Ga.; and Middle Tennessee Electric Membership Corp. in Murfreesboro, Tenn.

Trawick said Generation Partners is now producing 17 megawatts of renewable power with more than 50 additional megawatts under contract.