(IPS) Big Energy Firms Blocking Solar Power in South
A version of this article originally appeared on the Inter-Press Service website at http://www.ipsnews.net/news.asp?idnews=50862.
ATLANTA, Georgia, Mar 31, 2010 (IPS) – As citizens, businesses and non-profit organisations seek to transition to cleaner power sources like solar and wind, some big energy firms whose business models rely on polluting sources are standing in the way.
In Georgia, the energy company Georgia Power has lobbied for favourable public policies at the Public Service Commission (PSC) and State legislature that are making it difficult for the state’s residents to transition to solar power.
IPS learned that the Dekalb County school system wanted to put solar panels on their schools, but could not do it because of state policies like the Territorial Electric Service Act of 1973 which gives Georgia Power a monopoly over the purchase of energy.
“In Georgia, we have about a dozen state policies preventing creation of solar energy,” James Marlow, vice chair of the Georgia Solar Energy Association, told IPS. “One of those is the Territorial Act.”
“If you’re looking at a school, one of the common ways [of setting up solar panels] is using a power purchase agreement or PPA,” Marlow said.
Typically, one of the biggest obstacles for businesses and organisations to switch to solar energy is the initial cost of obtaining and installing the panels. A PPA allows a school system, for example, to obtain the panels for no cost from a solar installation company which finances the panels.
Then, the school can purchase the energy from the solar installation company, which would own the panels, for a 20-year period. Marlow said that a PPA client typically pays for the panels after the first five years and then saves money on energy for the next 15, all the while avoiding the use of dirty energy.
However, because of Georgia’s Territorial Act, individuals, organisations, and businesses with solar panels can only sell their energy to Georgia Power. This means they cannot enter a PPA with a solar installation company and may have difficulty affording the panels in the first place.
For those who are able to buy or lease their own solar panels, selling that energy to Georgia Power–the only allowed buyer–is subject to the rules of Georgia Power’s net metering program. Net metering is where residents and businesses with solar panels sell any excess energy produced by the solar panels to Georgia Power for use by other customers.
“The problem with the current [net-metering] program is… there’s a waiting list and it’s limited. Net-metering in Georgia has a cap of 100 kilowatt hours,” Marlow said, adding that one state in the US South, North Carolina, is taking the lead on solar power. “In North Carolina, that cap is two megawatts.”
“We requested a 5 megawatt cap in Georgia. Georgia Power has lobbied to limit that to a smaller number,” Marlow said.
But why would Georgia Power put a cap and waiting list on purchasing solar power from Georgia residents and businesses?
The company explains that its ability to purchase solar power from Georgians with solar panels is limited by the proceeds of its “green energy blocks” program, wherein Georgia Power customers are allowed to pay extra to purchase blocks of solar energy.
“We had to cap the amount we would buy back, because there’s only so much the program would bear as we rolled it out and it started to be developed,” Ervan Hancock, Georgia Power’s renewable and green strategy manager, told the Savannah Morning News newspaper in July 2009.
“Georgia Power will only buy solar energy if it’s funded through purchase of green energy blocks. Right now they only have 4,500 customers such as the US Center for Disease Control and Warner Robins Air Force Base. The funding from that goes to buy solar energy from your rooftop,” Marlow said.
However, Georgia Power charges more for solar power than it does for coal-based power, so there’s no incentive for most customers to purchase it. “They [purchasers of the blocks] would pay a slight premium to buy clean energy versus buying coal energy,” Marlow said.
Many of the purchasers of blocks of solar energy are government agencies that need to comply with government mandates to support clean energy, Marlow said.
Other states like Colorado have taken a different approach to encourage the use of solar panels. They charge all energy customers 50 cents a month, a very low amount, to support the purchase of solar energy from producers.
According to the Morning News, the Tennessee Valley Authority has enrolled 13,000 green-power customers and has no cap on the annual amount of green energy it will buy from producers. Florida Power & Light “is building three solar facilities that combined will generate 110 megawatts of electricity… Duke Energy in North Carolina plans to invest 50 million in rooftop installations.”
To be sure, Georgia Power is only following the regulations established by the legislature and PSC. However, they lobbied for those policies to be enacted in the first place, Marlow said.
“At this point, the utilities are opposed to solar and they’re not working to foster its development,” Marlow said.
In addition to regulatory tricks, there are more direct ways in which big energy companies like Georgia Power are blocking solar and wind power.
“They are trying to block clean energy by trying to flood the market with cheap, dirty energy,” said Erin Glynn, director of the Sierra Club’s Beyond Coal Campaign, referring to companies attempting to build two new coal plants and two new nuclear reactors in Georgia alone. As previously reported by IPS, numerous coal and nuclear plants are in planning stages throughout the U.S. South.
“If you build these giant power plants, there will be no demand for clean energy. The clean technologies are here today. People have solar panels. The companies are blocking the market,” Glynn said.
Big energy companies are lobbying at the state and national levels to prevent public policies from shifting towards renewable energy production as well. Georgia Power’s parent company, Southern Company, employed 63 lobbyists to fight the recent federal clean energy bill.
A recent report from the Centre for Public Integrity (CPI) shows that many big utility companies employed two dozen or more lobbyists to oppose the clean energy bill, while Southern Company had far more lobbyists than any other company.
“We feel it’s very important to educate our legislators, and we continue to work with Congress to further address the issues we see as critical to our ability to provide affordable, reliable energy,” Southern Company spokeswoman Terri Cohilas told CPI.
Southern Company argues that pursuing renewable energy or taking steps to address carbon dioxide’s recent classification as a pollutant will drive up the cost of energy to consumers. However, Marlow believes that dirty and clean energy are quickly approaching “cost parity,” and he said there are indirect costs of dirty energy such as high asthma rates near coal plants.
Twenty-nine states have a renewable portfolio standard, which requires that a certain percentage of the state’s energy will be renewable by a certain date.
“California and Colorado will require 30 percent comes from renewable by 2020,” Marlow said. “North Carolina requires 12 percent. Georgia has no requirement. North Carolina is the only state in the Southeast that has a renewable portfolio standard.”
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