Wednesday, December 1, 2010

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Georgia Power to expand solar program

Georgia Power recently received state permission to almost double the size of its solar energy program, opening the door for more homeowners and companies with solar panels to sell the sun’s energy to the electric grid at a premium price.

Georgia Power now pays 17 cents per kilowatt hour for solar energy and sells it to customers who sign up to pay extra for blocks of “green power.”


BEAU CABELL/THE TELEGRAPH John Hintermaier stands Wednesday in front of his family’s Tattnall Place home, where solar panels on the roof convert energy to electricity to heat water.

The solar price is more than four times the cost of energy produced by burning coal, which is the source of two-thirds of the electricity that Georgia Power supplies, spokeswoman Lynn Wallace said.

Last month, the Georgia Public Service Commission approved allowing Georgia Power to buy 2,500 more kilowatts of solar energy. That includes 1,500 kilowatts at the 17-cent rate, plus another 1,000 for larger projects that companies can propose at a lower rate, Wallace said.

Until now, Georgia Power had purchased about 2,900 kilowatts of solar energy.

“We’re just enhancing opportunities for independent solar producers to come into our state,” said the commission’s chairman, Lauren “Bubba” McDonald Jr.

The expanded program could encourage people interested in installing solar electricity but wary of the expense, which is steep.

John Hintermaier, a Mercer University professor who lives on Tattnall Place, considered converting his home to solar electricity but decided on installing a solar-powered water heating system last year instead. Panels on his roof heat the water, saving him about 15 to 25 percent in electricity costs a month (and providing hotter water than electricity does, he said).

Hintermaier said his electricity bill has averaged $65 a month for a family of six.

“This makes sense from a hard-headed capitalist perspective: I’d rather pay myself than a utility company,” he said. “We’ve really not been doing all we could do to bring solar into the state, and I think that’s a big mistake.”

Wallace said Georgia Power wanted to expand its solar program largely because so many customers were lobbying to sell the solar power they generate.

The company also believes it likely that the federal government will eventually require power companies to generate a percentage of their energy from renewable sources, she said. (Many states, although not Georgia, already have a renewable standard of this kind.) Starting now prepares Georgia Power for that change.

Hintermaier said without a renewable energy standard, big energy companies have no incentive to expand their solar portfolios because they don’t control the source of the power -- and reap all the profits -- as they do with their own coal and gas plants.

“I’d like to see the state open up power generation to more competition,” he said.

A lot of sunlight

In past years, Georgia Power had said Georgia had little solar potential. It may not be very efficient for the centralized power plant model that Georgia Power relies on.

However, the National Renewable Energy Lab ranked Georgia 10th among states based on the amount of sunlight it receives. The Georgia Solar Energy Association estimates that Georgia could generate almost a quarter of its electricity from solar arrays, based on receiving an average of five hours of sunlight a day.

And for a short time, federal incentives are still available for solar projects, a fact Georgia Power pointed out in its proposal to expand its solar purchases. Federal grants of 30 percent are available to customers until Dec. 31. After that, customers can file for a federal tax credit of 30 percent on their tax return between 2011 and 2016, Wallace said in an e-mail.

Hintermaier’s solar hot water system cost about $10,000, but after tax credits, his family’s net cost was about $4,200, he said. That’s compared with solar electric systems that he priced at around $70,000.

Solar electricity is a big investment, but some people are making it.

Wallace said more than 130 customers, most of them residential, are now selling solar energy to Georgia Power. The company will buy no more than 100 kilowatts from a single customer.

The Public Service Commission, which regulates private power companies, must approve each increase to the cap on Georgia Power’s solar program. That’s because if the company has more solar energy than customers want to buy at the higher price, then regular ratepayers will have to subsidize solar costs, said Bill Edge, public information officer for the commission. The commission wants the green energy program to be self-supporting, he said.

“It’s a fine balancing act with green energy,” Wallace said. “We have to balance expenses and revenue so it’s break even.”

However, the Green Energy Program is not expected to break even for several years and will likely have to be subsidized from the company’s fuel recovery fund, Wallace said. This is funded by all ratepayers, but Georgia Power can only use it to recover costs, not make a profit.

Eventually, the Green Energy Program could cause customers to have to pay more or less for fuel, but that hasn’t yet happened, Wallace said.

Georgia Power has a waiting list of customers who would like to sell the solar power they generate to the electric grid, and those will have first priority, Wallace said.

Participants must agree to file cost and operational data with the company and the Public Service Commission, to help both learn more about the solar market in the state.

The energy will supply Georgia Power’s Premium Green Energy product, which has a 50 percent solar component and is available in 100-kilowatt-hour blocks for $5 per block. A separate Standard Green Energy program, which is generated from biomass sources, costs $3.50 per block.

Customers who buy green energy must purchase at least 400 blocks at the standard or premium rate, plus at least 500 blocks more at a negotiated rate, Wallace said. Robins Air Force Base is the only large volume customer in Middle Georgia, Wallace said.

According to a Georgia Power news release, since the company began its Green Energy program in October 2006, nearly 4,200 customers have committed to purchase about 3.8 million kilowatt hours of green energy, or enough electricity to power about 3,800 homes using 1,000 kilowatt hours a month.

To reach writer S. Heather Duncan, call 744-4225.

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