A Little Sunshine On A Battle To Expand Renewable Energy

Today’s Courier Herald Column:

Senate Bill 401 was filed this week, seeking to expand the use of renewable energy in the state of Georgia.  The bills’ reading is somewhat technical, but essentially removes caps on the amount of power that can be produced by solar panels on individual homes and businesses and then sold back to the local power generator.

Essentially, customers with solar panels meter not only power coming into their house from the existing grid, but also the amount of power returned to the grid.  The generating company – Georgia Power in most of the state – is required to buy surplus power back based on their state granted regulated monopoly status.  Currently, projects are limited in size to 10 Kw for residential customers and 100 Kw for business customers.  SB 401 removes these caps.

More intricate details of the bill provide for private ownership of these systems, as opposed to current law which requires the owner of the property to also own the attached grids.  This will allow for manufacturers of solar grids or interested third parties to enter into financing or lease agreements which pay for the systems long term out of cost savings for the customer.  By allowing for these arrangements, many customers can access these systems with no money up front, as opposed to the high initial capital costs which would take years to recover.

Not surprisingly, Georgia Power is less than thrilled with the addition of private generation of power attached to their grid.  They, after all, are entitled to an 11 percent annual return on any investments they make in an effort to keep the lights on in Georgia.  They also have a permanent presence at the Gold Dome, with an army of lobbyists prepared to cater to each legislator’s personal needs.  This is to ensure when pressed about Georgia Power’s objections, the legislator is sure to reply that the company is a “Good Corporate Citizen”.  That’s capitol speak for “They’re going to get whatever they ask for.  Please excuse me while I go attend a NASCAR event at their expense.”

Georgia Power’s grid generation capacity is already under strain as the company is expected to remove three coal powered plants over the next couple of years, as upgrading them to meet new clean air standards has been deemed cost prohibitive.  Meanwhile, Plant Votgle’s two additional nuclear reactors are expected to gain approval from the Nuclear Regulatory Commission on Thursday, but will not be online until 2016 at the earliest.

In protesting the rules that are responsible for the coal plant closures, Georgia Power stated that it is likely to have to buy additional capacity from producers out of state.  With other power producers having to close generating plants for the same reason however, the availability of power and more importantly, the price that will be paid for it, is in question.

SB 401 aims to take commercial and government buildings with large flat roofs and enable them to create additional energy during peak times, when Georgia Power and other producers would be most likely to source additional power from out of state.  Peak use tends to occur on hot summer days, precisely the time when solar power would be the most beneficial.

In addition, there is a local economic development benefit to expanding the use of solar.  MAGE solar in Dublin and Sunivia in Norcross manufacture panels which would supply these projects.

As for the consumer, expanding the use of solar with legal third party lease arrangements would be a small acknowledgment that the bill used to finance the reactors at plant Votgle rewarded Georgia power with an advance $1 Billion in profit, paid for by small businesses and residential customers.  SB 401 reminds everyone that with Georgia Power’s monopoly status comes a responsibility to look out for smaller customers, as well as helps them meet their own goals to help Georgia reduce air quality problems.

While the bill is one that is sound on its merit, that does not always mean it will gain acceptance at the capitol.  The first sign of trouble is that the bill has been assigned not to the Regulated Industries Committee, which has jurisdiction over power generation, but to the Natural Resources and Environment Committee.  Capitol insiders predict it will take effort to get the committee to move the bill, but a little sunlight on the issue may make the legislature warm up to solar.


  1. So… I could theoretically get a power meter installed on an empty lot filled with solar panels and GAPower would be legally obligated to send me a check each month?

  2. CMOB says:

    From what I know of SB401 it really has nothing to do with forcing Georgia Power to buy power but to how I decide to finance the cost of the solar equipment.

    • Charlie says:

      GA Power is currently already required to buy the power, but limits both the size of the amount that can be produced, and requires that the customer be the owner of the power generation equipment.

      This bill removes the size restriction which would allow for larger, mostly industrial or government users to generate more power (think the roof of a shopping mall, warehouse, or school). It also allows for the equipment to be leased to the property owner with the payment being made from energy savings. Thus, the consumer puts no money up front, but also doesn’t “own” the equipment, which currently violates Georgia law.

  3. Wadley Stokes says:

    Ask some of the Hawaiian Electric Utility customers if they like having a rate increase in order to justify a small number of their neighbors’ utilizing solar power. I think solar power is wonderful but is still not economical.

  4. seekingtounderstand says:

    Charlie, you do realize that local and state governments have long used GA Power as a way to stealth tax us don’t you. If you took out that cost your power bill would drop in half.
    So how can we get them to due without funds?
    Also is this the work of the gas lobbyist organization and Tim Echols?

    • Wadley Stokes says:

      I retired from Georgia Power six years ago after 37 years of service. I have been involved in solar projects off and on for forty years. I don’t consider myself an expert but I do have insight on utility matters. Hope my comments add value to our on-line discussions.

      • jm says:

        Thanks for being open about your affiliation. It would have been better on your first post, but its never too late I guess.

        Wadley, I don’t see the connection. Am I wrong in guessing that GA Power would buy back at one rate and then sell at a slightly higher rate, thus making a profit for both GA Power and the homeowner/electricity supplier. I don’t begrudge them that, and I don’t see how electricity suppliers would impact neighbors’ rates much at all.

        • Todd Rehm says:

          Actually, there have been proposals to require Georgia Power to buy electricity from private solar installations at the retail rate. Any scenarios in which the large-scale expansion of on-grid solar doesn’t impact ratepayers is fantasy. Net meters will cost several hundred dollars to install, and the tab is generally picked up by the power company, which means ratepayers. Also, other areas seeing large-scale adoption of private solar feeding into the grid have experienced problems with regulating the current on a grid that was designed to deliver electricity to homes, not from it; fixes are very costly.

          • jm says:

            Thanks. That doesn’t make much sense (what you said makes sense – the proposals don’t make sense).

            If I had a system that generated electricity, I’d be happy already to not have a power bill, and the extra cash from supplying to the grid would be a bonus. I wouldn’t expect to be able to sell it at a premium, one electron is worth as much as any other and GA Power is in the business of selling electrons, so they should be allowed to sell it at a markup. In fact, in that situation, GA Power would be encouraging people to do it, if the rate to buy it is lower than the cost of the same KWH production at a power plant.

  5. JTender says:

    I think most of us support in general the development of alternative sources for energy and particularly those that would reduce our dependence upon foreign oil. I don’t think we want to do that blindly without full awareness of the cost to our economy and the impact on our citizens. We’ve seen many attempts at both state and the federal level where individuals and companies seek to use government intervention to subsidize their pocket book at the expense of taxpayers or shift costs to other citizens. With that in mind, what impact will this bill have on tax payers or other electric customers? We’re foolish if we pass on a bill just because someone says it advances alternative energy.

    • Charlie says:

      “We’ve seen many attempts at both state and the federal level where individuals and companies seek to use government intervention to subsidize their pocket book at the expense of taxpayers or shift costs to other citizens”

      Yes, that’s exactly what we saw a few years ago with SB 31, where Georgia Power shifted the costs of two nuclear reactors to the subset of customers that didn’t have lobbyists at the capitol, and then gave themselves their profit, exceeding $1BN, up front.

      So, thank you for joining us to deliver GA Power talking points to distribute nebulous fear of the unknown. Southern Company wasn’t nearly concerned about shifting costs to other citizens a few years ago when they used 70+ lobbyists for their billion dollar payday.

      • JTender says:

        The question at hand isn’t what Georgia Power did or didn’t do with SB31. Whether that was right or wrong has nothing to do with this bill. The important question is whether this bill is good for all Georgians. With the Obama administration trying to advance their solar agenda, the U.S. taxpayer ended up losing over $500 million just on the loan guarantees for Solyndra. We don’t want to make a similar bad decision for Georgia. We need to make sure this bill doesn’t cost all Georgians just to advance either an ideological agenda or anyone’s personal economic agenda. We need more analytical data to quantify the potential economic impact on all Georgians.

        • Charlie says:

          “The question at hand isn’t what Georgia Power did or didn’t do with SB31”

          Translation: Georgia Power already has their Billion. Please forget the recent unpleasantness that you are already paying for.

          “With the Obama administration trying to advance their solar agenda…”


          I’d now like to pretend this has something to do with an unpopular President, and not focus on a fact that it was sponsored by conservatives in the Georgia Senate.

          “We need to make sure this bill doesn’t cost all Georgians”

          Unlike SB 31 which had a guaranteed rate increase for most Georgians (those without political connections), this bill has no taxes, and no rate increases. It expands the amount of power that an individual can create that it then doesn’t have to buy from GA Power. That energy won’t pollute anything, and won’t cost the consumers a dime. So, we’re pretty sure who it DOESN’T cost.

          “or anyone’s personal economic agenda”

          It’s clear from the rapid reaction team returning from SoCo whose economic agenda this would be hurting.

          “We need more analytical data…”

          The same request we made over SB 31. Instead, we got faked numbers that didn’t include an opportunity cost for the use of consumer’s money to justify the “savings” that were completely bogus over SB31.

          In this case, you don’t want more analytical data. You want to stall through the end of the session, or at least until you can get an extra 30 or so lobbyists spun up to distribute the “good corporate citizen” talking points.

          We have the data we need. Though I’m sure I’ll look forward to weeks more of newly interested sock puppets such as JTender and the returning “Wadley Stokes”, f/k/a “McGee”, who will continue to post circular talking points that obfuscate this issue while you again try to buy off a legislature.

          • Dave Bearse says:

            Indeed 4Q 2011 Southern Company profits were up $70M compared to 4Q 2010 due to Georgia Power profitability: http://www.ajc.com/business/georgia-powers-rates-a-1316533.html Beyond the shifting of risk to the public, the SB31 privatized profits are upfront. SB31 isn’t saving ratepayers hundreds of millions, it’s pumping up Southern Companry profits by hundreds of millions.

            SB31 reveals a great strategy. First buy poor policy legislation such as SB31 (and in this case if you’re a large electricity user don’t oppose the legislation, join the fray and buy yourself an exemption, that increases profits). Then support legislation that is arguably good public policy such as eliminating tax on electricity used in manufacturing.

            It’s the market doing what it’s supposed to do, maximize profits, by lobbying for everything and anything that does so. Talk of job creation is simply another form of lobbying employed to maximize profits.

  6. energyaware says:

    The real genesis of this bill, if I read it correctly, is that I can legally finance a solar array on the roof of my business either through a lease or by a ‘power purchase agreement’, meaning I can still ‘rent’ my electricity but someday ‘own’ it by paying over time – (and put my capital into my core business). To me this is a simple property rights debate – I can lease my printers, trucks, etc, but because GA Power or my EMC has a monopoly, they say I can’t lease a solar array from a third party – Where in the United States does this make sense or sound legal!
    I have been in the energy business, professionally employed as an engineer in many facets of generation and I can safely state that solar provides grid security, shaving peak load and improving the load factor of our utilities, all while adding to grid reliability. This actually drops the rates of all ratepayers – not raise them. The dramatic drop in the cost of solar, coupled with the fact it is generated on site where used, it is easy to argue that solar is less expensive than our delivered price of electricity today – and the incentives for solar pale in comparison to the incentives for other forms of electricity. Thanks

  7. sm9105 says:

    I am the energy efficiency and renewable energy expert for a major U.S. corporation. We currently have 11 MW of Photovoltaic (PV) Power Purchase Agreements (PPAs) in operation or under construction across the U.S. The PPA is the proverbial win-win: it allows us to lock in affordable clean energy electric rates for 20 years and we get to preserve our capital for our core business. The investor / owner of the renewable energy source receives any applicable tax benefits and has a guaranteed revenue stream to recover his investment. For PV, the commercial AC utility gets the benefit of a built-in distributed generation that coincides with peak demand, potentially helping them avoid rolling brownouts, or having to purchase peak demand generation.

    Unfortunately, I am prohibited from pursuing PPAs in my home state. There is no guarantee that the PV investment community will be attracted to Georgia even if the bill is passed. But as long as this financial vehicle is prohibited, Georgia is doomed to watch those dollars go elsewhere.

    All commercial AC utilities throughout Appalachia and the South can expect to see increased regulations on coal from the EPA, net result being increased electricity rates for it citizens. Passing this bill obviously will not solve that issue. The proposed nuclear plant is orders of magnitude more important as a hedge against the EPA. But every kWh of PV generation helps. To prohibit the primary financial vehicle that provides for win-win deployment of renewable energy is foolish.

    • saltycracker says:

      Good comments. It’s fun to point out again that individuals can get “free” electricity for life with a small capital investment not in personal systems but stock. It might not be as good as it was a couple years ago and the future dividend tax is uncertain as Obama wants to raise them.

      Buy stock in your local utility.
      Example (rounding to just get a general direction):

      Southern Company at $45 @ and $1.89 div.
      Utility bill is $100 a month or $1,200 per year
      $1,200 \ 1.89 = 635 shares = $28,500

      If you had done this in 2009
      Southern Co. was around $30 paying $1.73
      $1,200 / 1.73 = 700 shares would have been $21,000.
      AND your shares would be throwing off $1,320 cash and be worth $31,500 today. Not bad.

      Stock vs. personal generation system : No maintenance or hassles, portable if you move, reliable dividend, long term appreciating asset……only our legislators & PUC’s can screw that up…..

  8. seekingtounderstand says:

    I would love to see competion with energy. The 1987 de-regulation of natural gas has hurt our pocketbooks and we ended up over paying.
    Please someone answer this question. If local and state governments use GA Power as a way to stealth tax us and pass on other costs like the TSPLOST thru our utility rates how are you going to fight the government to get this bill passed.
    You keep blaming lobbyist, which is true, but how do you fight governments getting their share and driving up our rates.
    Thanks to President Obama we can no longer use cheap coal so costs are going to rise while wages remain low.

  9. seekingtounderstand says:

    If our phone and energy costs are rising due to stealth taxation unknown to consumers, is it going to be different with solar?

  10. CaptainPlanet says:

    So what you are saying is that GA POWER is not in favor of creating JOBS which would support local workers and the local GA economy.

    More JOBS would be created by local solar panel manufacturers to crank out more products to keep up with demand.

    More JOBS would be created by local solar installation companies to answer the phones, meet with the would-be solar customers, and design, order, and install their solar energy systems.

    More JOBS would be created by local businesses that install solar because following a solar installation they now have dramatically reduced fixed costs (and more operating capital).

    More JOBS would be created once GA finally has a market for RECs (renewable energy credits) which are solar commodities that can be purchased and traded among large corporations who must offset their emissions.

    More JOBS would be created when GA residents realize they can be their own power (and oil) companies and fuel their new electric cars with solar energy – driving without a single drop of gas.

    In a state with a higher than average unemployment rate these JOBS could really help a lot of Georgia families.

  11. Charlie says:

    OK, we’ve allowed quite a few new people into the pool on both sides of this debate. I don’t intend on moderating comments all weekend, so those already here can fight it out. I plan on shutting down early and having a weekend. To be clear, I do not intend on approving any new first time commenters until Monday.

    We can reload then with new sock puppets if necessary.

  12. jameshrust says:



    James H. Rust

    The United States is mapped for potentials of developing solar energy shown by the following url: http://www.armenergysolutions.net
    Once at this site, click on solar energy to get the map for solar energy potentials for the United States.

    Solar potentials are given in kw-hr/kw/yr. This is the theoretical solar energy obtained annually from a solar collector that it is always facing the sun year round when the sun is shining. This means the collector is moving in two directions all the time–east-west and north-south.

    The highest values are 2100 kw-hr/kw/yr in parts of CA, NV, AZ, and NM. You can calculate theoretical capacity factors, the ratio of average annual power output from a solar plant to the maximum output at noon June 21 of the year, for solar plants from this data. The capacity factor is 0.24(2100/8760) for those regions.

    For Georgia, the state has a value of 1600 kw-hr/kw-yr for maximum energy available. This gives a capacity factor of 0.18. Capacity factors for nuclear power plants typically are 0.9.

    Examining data from the U. S. Energy Information Administration for solar energy production in the U. S. shows a capacity factor of 0.14. The solar plants are all in areas of maximum theoretical solar energy availability in the U. S.–CA and AZ. The reason capacity factors are below 0.24 is the solar collectors only move in one direction–up and down or north-south. They lose energy due to collectors not directly facing the sun coming up in the East and going down in the West. Other losses are due to the inability to match theoretical maximums in real operating equipment.

    Since Georgia has a theoretical maximum capacity factor of 0.18, a reasonable guess for capacity factors for solar plants built in Georgia would be less than 0.12. A 1 kilowatt solar power plant would put out possibly 1000 kw-hr/yr. A 1 kilowatt nuclear power plant in Georgia could produce 7,900 kw-hr/yr.

    Georgia has not developed solar energy because there are too many better places to locate solar plants. Even Florida is a better location to build solar plants. Florida Power and Light has built two solar plants—a 25 MW photovoltaic power plant in Arcadia and 75 MW thermal plant near Indiantown. Both plants cost $6 million per MW and occupy 6 acres per MW.

    Costs for commercial and residential photovoltaic power plants are running about $6,000 per kilowatt. Due to substantial reductions in costs of solar panels produced in China the past year; solar power plants may be built for less than $6,000 per kilowatt. Because photovoltaic cells degrade with time at possibly one percent or more per year, there is a practical lifetime for the solar panels which would be no more than 25 years. Assuming a 1 kilowatt Georgia photovoltaic power plant can produce 25,000 kw-hr in its lifetime, the simplest capital cost for electricity would be 24 cents per kw-hr.

    In contrast the two 1100 MW nuclear power plants under construction near Augusta, Georgia are supposed to be built at a cost of $6400 per kilowatt. These plants are reported to have a lifetime of 60 years and if operated with a 0.9 capacity factor, a 1 kilowatt nuclear plant could produce 470,000 kw-hr. Admittedly this is a crude comparison, but the capital cost of the nuclear plant would be 1.4 cents per kw-hr compared to the 24 cents per kw-hr of solar plants. Capital costs for natural gas- or coal-fired power plants would probably be less than $3,000 per kilowatt; however, they probably would not be operated at the high capacity factors of nuclear power plants.

    Solar plants for commercial or residential use need to carry insurance against natural disasters such as tornadoes, hail storms, or falling trees or tree limbs which can destroy them. In addition, solar panels need to be cleaned because they function poorly when covered with snow, leaves, and the horrible green pollen that requires daily spring cleaning off car windows in the Atlanta area.

    Solar power plants with the available technology are not competitive with fossil-fueled or nuclear power plants. In addition, due to their availability of a few hours per day and unreliability due to weather conditions, their lack of competitiveness becomes worse because back-up power sources need to be available when they don’t function. The back-up power source usually is the Georgia Power Company.

    Solar power plants, and also wind power plants, would not be sold unless there is some means to substantially reduce their costs by payments to their customers by taxpayers and other electric power customers. The structures of these payments is very complicated and is found on the Department of Energy funded website operated by the University of North Carolina given at http://www.dsireusa.org/

    An attempt to explain these subsidies is the subject of another paper “Solar Energy Possibilities For Georgia—Part II”.

    As an afterthought, one of the new 1100 MW nuclear power plants being built by Georgia Power Company near Augusta would consume 230 million tons of coal or 5 trillion cubic feet of natural gas during the plant’s lifetime. Each of these numbers represents 23 percent of the annual U. S. use today of coal or natural gas. Building nuclear power plants extends the life of our fossil fuels reserves far out into the future which will help reduce future price increases. Sometime in the future a new energy source beyond our imagination will be developed as nuclear power was unknown back in the nineteenth century.

    Dr. James H. Rust is a retired Georgia Tech nuclear engineering professor with over fifty year experience in area related to energy policy.

  13. jameshrust says:

    James H. Rust
    As shown in SOLAR ENERGY POSSIBILIES IN GEORGIA—PART I, solar photovoltaic electricity is more expensive than conventional electricity sources from fossil fuels. Subsidies are required in order to promote its use. Subsidies are in the form of payments or tax credits for construction of solar systems, forcing power companies to pay above market prices for excessive electricity production called feed-in-tariffs, and mandates for use of solar energy without regard to cost of products. A vast array of subsidies is provided by the U. S. government, state governments, and municipalities.
    Subsidies for individual states are given by a Department of Energy website operated by North Carolina State University at http://www.dsiresa.org/
    The website solar subsidies for Georgia, current as of May 5, 2011, are as follows:
    A Federal tax credit of 30 percent total cost of solar facilities for corporate or residential use.
    A Georgia corporate tax credit of 35 percent total cost of facilities up to $500,000. Total annual subsidies can’t exceed $5 million starting 2012, good through 2014. Size of facilities is limited to 100 kilowatts.
    For personal use the tax credit is 35 percent up to a maximum of $10,500. Solar plants must be owned by property owners and restricted to a maximum size of 10 kilowatts. Total annual subsidies starting in 2012 can’t exceed $5 million through 2014.
    Georgia Power Company or other electricity suppliers must pay 17 cents per kilowatt-hour for electricity sent back to the grid due to lack of demand by solar power plant owners.
    The Georgia Cogeneration and Distributed Generation Act of 2001 spelled out the terms for businesses and property owners to generate electricity from renewable sources on site, prohibiting leasing, power purchase agreements (PPA), or other forms of third-party financing.
    In order to remove limits on power generation and allow third-party financing on solar and other renewable energy sources, a bill designated SB 401 to amend the 2001 Act was introduced February 7, 2012 by four Republican and two Democrat Senators. One co-sponsor of the bill is Sen. Buddy Carter of Pooler, GA.
    The Internet version of the Atlanta Business Chronicle had a February 12, 2012 article “Nuclear power, renewable energy could be on the rise in Georgia; coals future unclear” that provided a link to SB 40l and gave a good description of the motivations behind this bill. The article with links to the bill and other important features is given by the url that follow:
    Further information about SB 401 is contained in the Atlanta Journal-Constitution Internet article by Kristina Torres February 16, 2012 “Should alternative energy restriction be dropped” at the following url:
    This article mentioned one of the bill’s “sponsors, Sen. Buddy Carter, R-Pooler, who questioned Georgia’s commitment to renewable energy given by the law’s current restrictions.”
    Progress of SB 401 has not been promising; however, Mary Landers of the Savannah Morning News posted an article “Solar bill jolted back to life” February 24, 2012. She wrote Sen. Buddy Carter(R-Pooler) had revived SB 401 by having it tacked onto SB 459, a bill allowing consumers to opt-out of smart meters. She wrote, “Carter’s interest in third party power purchase agreements came from constituent Dr. Sidney Smith,”
    Dr. Smith is an investor in solar energy. In an April 10, 2010 article by the Associated Press “Solar farm a first in Georgia” covered by the Local News of the Tifton Gazette, it was written “With the state and federal tax credits he’s been able to tap into he expects to recoup his investment in about 15 years.”
    SB 401, or its replacement, provides subsidies to third power party suppliers by way of federal and state taxpayer-funded tax credits. Feed-in-tariffs for electricity not used by customers is not clear—although it may range between 5 and 17 cents per kilowatt-hr.
    Electricity provided to customers by PPAs replaces electricity that would have been supplied by Georgia Power Company or an EMC. These organizations still have to provide electricity to PPA customers when the sun does not shine; which is the majority of the time. Georgia Power and EMCs have vast overhead expenses that are partially described by meter readings, billing, transmission line’s construction and maintenance, new hook-ups, repairing systems due to catastrophic nature events, etc. These expenses are paid out of customer kilowatt-hr charges which most likely are more than half a monthly bill. Consequently, Georgia Power Company or EMCs are losing overhead revenue due to loss of sales picked up by PPAs. This represents a third subsidy, which some may call an unforeseen consequence, of allowing third party power suppliers an increase in subsidized renewable power generation.
    Increased use of solar power in Hawaii has caused a loss of revenue for the Hawaii Electric Company (HECO); while its overhead remains the same. The company is proposing rate increases in order to recover lost revenue; although the problem has not been resolved as of this writing.
    SB 401 may have appeared legislation to provide citizen’s control of their property, more jobs, and relief on power bills. Its result is more tax payer funded renewable energy subsidies, higher electricity rates for all power users, and a source of income for a small group of renewable energy providers.
    Increased taxes, and by analogy increased electricity rates, should provide benefits to all who fund these increases. The benefits should not be for the few who take advantage of, or even cause, these increases.
    It may be prudent the Georgia Legislature examine all subsidies for renewable energy sources such as payments to purchasers of electric cars, filling stations to allow E-85 sold at pumps, etc. The public is negligent on how tax dollars are spent.
    With our present state of technology, renewable energy sources follow the old saying “You can’t make a silk purse from a sow’s ear.”
    Dr. James H. Rust is a retired Georgia Tech nuclear engineering professor with over 50 year experience in energy related areas.

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