tva

Energy Alabama Signs On to Comments Opposing TVA’s NEPA Rule Changes

Energy Alabama, and a host of energy and conservation groups, signed on to comments prepared by the Southern Environmental Law Center opposing changes to TVA’s implementing regulations for the National Environmental Policy Act (“NEPA”).

Energy Alabama is extremely concerned that TVA’s proposed changes undermine transparency, stifle public involvement in TVA’s decisions, and bestow upon TVA almost boundless discretion to decide whether and how it must review the effects of its activities on the people and environment throughout its seven-state service territory, which includes nearly all of Tennessee, and portions of Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia.

To view the full comments, please visit: https://alcse.org/wp-content/uploads/2017/09/2017-09-06-Comment-on-TVA-Proposed-NEPA-Rule.pdf

How to Go Solar in North Alabama

Be like her. Go solar!

Ever thought about going solar at your home or business? I often walk outside on a really sunny day and think to myself, “Man, I wish I had solar panels installed already.” So here’s the thing: It really isn’t that hard and the economics are better than they’ve ever been before. Today, let’s learn how to go solar in North Alabama.

In this post we’ll explain all the steps you need to take to install solar at home or where you work. Even though your contractor will probably be the one completing some of these items, it’s always good to know what should be happening.

This post may be a little lengthy but we wanted to make sure you have all the information you would need to make solar a success at your home or business.

The Process

  1. Determine property feasibility
  2. Determine your objectives
  3. Confirm utility participation in Green Power Providers
  4. Understand pricing
  5. Determine how to pay for your system
  6. Get analysis from Energy Alabama
  7. Submit Customer Reservation Request (CRR) to TVA
  8. Submit Participation Agreement Request (PAR) to TVA
  9. Get your application(s) approved by TVA and your local utility company
  10. Buy and install your solar power system
  11. Complete system tests and submit results to TVA
  12. Get money!

Determine Feasibility

This is pretty simple. Ask yourself these four questions. If the answers are yes to all of them, you’re probably a good candidate for solar in North Alabama.

1. Is the property free and clear of trees and other items that would obstruct the sun?

2. Does the property have a south-facing roof space or open area(s) where a solar system could be installed on the ground?

3. Does the property have a relatively new roof that is expected to last for at least another 25-30 years?

4. Do I expect to own the property for at least another 8 years?

Determine Objectives

If your property is feasible, now you need to figure out what exactly you want to do. Your objectives will be limited by your property, your personal desires, and your budget. The two biggest things you need to determine are:

  1. Do you want to go off the grid or connect to the grid?
  2. Either way, how far do you want to go? Do you want to take your whole home off the grid or just a small room for emergency backup? Do you want to offset 50% of your usage or maybe all of it?

Here are some things to consider to help you make your decision.

  1. Do you have lots of roof space or open area? If you’re trying to go completely off the grid or offset all your usage, you’ll probably need a decent amount of space to go solar.
  2. Have you already invested in energy conservation and efficiency? Solar is much cheaper than it used to be but nothing can compete with just using less energy. Also, the more efficient you are, the less solar you need to buy. Most homes can’t go completely off the grid or offset 100% of their usage without reducing their usage first.

Green Power Providers

If you’re trying to go solar in North Alabama on a home AND you want to connect to the grid, you’ll need to participate in the Green Power Providers program from the Tennessee Valley Authority (TVA). This program gives structure to how you connect to the grid and sell your electricity.

More on that later. For now, you’ll need to confirm that your local power company participates in the program.

If they don’t participate, it isn’t the end of the world! Perhaps they’ve never had anyone ask. We’ve seen utilities join the program just because someone asked them to. Ask to speak the to the general manager and respectfully ask them about participating in the program.

Before you do this, you’ll want to continue the process so you can talk more intelligently to them about exactly what you want to do on your home such as how your return on investment is affected by their lack of participation and the local economic impact of your solar installation.

Understanding Pricing

There are a lot of moving parts to understand. Let’s break them down.

Residential solar in North Alabama is selling for about $3.00 per watt before tax incentives. For example, the average home in North Alabama installs 5 kilowatts (kW) of grid-connected solar. This would cost about $15,000 before tax incentives.

A homeowner can expect a 30% federal tax credit if you have the taxable income to take the credit against. If you’re able to use the 30% federal tax credit, this would bring the total cost down to $10,500.

We recommend that you consult a tax professional before making this decision.

Additional incentives, such as accelerated depreciation, are available to businesses and can shave 2-3 years off the payback time. Also, businesses can expect lower costs per watt since they typically install larger systems and can take advantage of an economy of scale that homes cannot.

Now on to budgeting!Going solar in North Alabama

As you’ve seen, solar in North Alabama does cost a good bit of money, and you may not have that kind of cash sitting around. Today we’ll talk about financing home systems. (Financing business systems and innovative financing mechanisms will be the subject of future posts.)

Basically you have two and a half options to pay for home solar in North Alabama.

  1. Pay cash.
  2. Use traditional financing. This can take many forms, but the idea is the same. The cheapest form of financing is likely to be a home equity loan, but you can also get unsecured loans for the system. But if you do this, you’ll still likely need to put some money down.

Well, there is one more option… But that’s another post for another day. Long story short, you CAN add it to your mortgage at the time of purchase of a new, or a new to you, home. On 30 year mortgages, this is cash flow positive… you make money starting in month one! We’ll explain more later.

Last note on budgeting: If you decide to go with battery storage, even for a small system, you should know what kind of pricing to expect. Most battery storage systems add about 60-70% additional cost. So if your solar system is expected to cost $10,000 and you want to add battery backup, you should expect to add $6000-7000 to the total project cost.

This extra cost isn’t without benefit though. With an extra investment you’ll be able to completely disconnect from the grid and rely wholly on yourself. Of course battery technology continues to fall in price. Dramatically. This will only become a better and better decision over time.

Getting a Preliminary Analysis

So you know that your property is feasible, and you know what you want to do and have a good idea of how to fund the project. Now it’s time to really get started. And here’s where we come in.

If you’re in North Alabama, we can provide a free preliminary analysis for you. The point of this analysis is to let you know exactly how much energy you can produce on your property, how much it is expected to cost based on current market pricing, and an estimated return on investment.

Is Solar Right for You?

Schedule Your Analysis

After the Preliminary Analysis – Dealing with TVA

Once you’ve seen the results and are happy, you’re ready to move on. The next step is reserving your spot in TVA’s Green Power Providers (or convincing your local utility to join if they’re not already participating). Concurrent with that you’ll begin working on the engineering drawings of your system.

*Note: If you are installing an off-grid or behind-the-meter system, you do not need TVA’s approval. You are only required to get their approval when energy will be sent to the grid.

First you’ll file what is called a capacity reservation request (CRR) with TVA. This essentially reserves your spot in line while your application is reviewed and your engineering drawings are finished. We should note that while this reserves a spot in line, there really isn’t a line. At least right now… CRRs are usually approved in just a few business days.

We can help you find a company to build your solar power system drawings, or you can work with a North American Board of Certified Energy Professionals (NABCEP) company on your own. You’ll need a NABCEP professional in order to connect to the grid. At this point in the process you should expect to pay a professional. Engineering drawings typically cost between 10-15% of your total project cost. If your project is expected to cost $15,000, you should expect drawings to cost $1,500 to $2,250.Going solar in North Alabama

Once your CRR is approved by TVA, they will send you a contract called a Participation Agreement Request (PAR). This contract details the terms of what TVA will pay you for the electricity you generate. PARs are usually approved quickly as well but you should expect about one to two weeks depending on their workload.

As of June 15, 2016, TVA pays retail rate for 20 years. Currently, retail rate for much of North Alabama is about $.10/kWh. If in 5 years the retail rate you pay is $.12/kWh, TVA will then be paying you $.12/kWh. This will go on for the 20 year length of the contract.

TVA gives a great rundown of how their portion of the process works.

Once you fill out and sign the PAR, it goes to the local power company (someone like Huntsville Utilities, Joe Wheeler EMC, or Athens Utilities) to be approved. After the local power company approves the application, TVA will review and approve the application.

During the CRR and PAR process, someone can act on your behalf, such as the solar company you are working with. Of course you are kept in the loop, but you don’t have to get involved in every small item unless you really want to. This helps keep the project moving.

Ready to Install

When TVA notifies you that the PAR has been approved, you are able to purchase and install your system. You have 180 days from the date of notification to finish the installation of your system.

TVA requires a NABCEP certified installer and a licensed electrician to complete the install. Even if it weren’t required, you want it! That’s the only way to know you have a company that knows what they’re doing.

Note: Some municipalities, like Huntsville, may require you to pull a building permit. Make sure to check with your local government prior to beginning construction!

The solar company you are working with will also receive the PAR approval notification. Upon completion of the installation, the local power company will test the system to make sure it is operating safely. The local power company will notify TVA when the testing has been satisfactorily completed.

Almost done… Receiving your credits

Well, the hard work is done, but you still have one more major item to complete. Every local power company is different, but most will credit the amount of your generation on your bill.

You will have two meters. One for consumption (your existing meter) and one for generation. If you consume 1000 kWh in a month and produce 800 kWh of solar that month, you will owe the utility company for 200 kWh of energy. If you produce 1000 kWh and consume 800 kWh, they will owe you for 200 kWh of energy.Going solar in North Alabama

Some utilities will credit your bill and carry over your credit whereas some will pay you out monthly or regularly. You’ll need to verify this with your local power company.

The key point here is to verify that you are receiving your credits and that they are accurate. Almost all solar systems also come with remote monitoring, not to mention you have a second meter. Remember, many local power companies have not dealt with very many solar projects, and as such, may not have all their internal processes in place. It is your responsibility for making sure you are appropriately credited!

All done! Enjoy your clean, renewable solar energy system! 🙂

Have more questions? Feel free to contact me via email at dtait@alcse.org

Going Solar in Huntsville is different from Birmingham

Going Solar in Huntsville vs. Birmingham

Thinking about going solar in Huntsville or Birmingham?

One of the many factors in your decision probably has to do with how long it’ll take for your solar power system to pay for itself. Of course, since Huntsville and Birmingham are only about 100 miles apart, you might assume that the timelines are roughly the same.

Nope. Not so much.

If you live in Huntsville—or Madison, Decatur, Athens, Florence, or any other part of north Alabama under the jurisdiction of the Tennessee Valley Authority (TVA)—you can reasonably expect a payback on your solar investment within 10 to 12 years. But if you live in Birmingham—or most anywhere else in Alabama—the payback time on your solar project will be much longer. In fact, it might never happen. Well if you want to connect to the grid.

Why the difference? It has everything to do with policy.

 

An investment in your future

Let’s look at a couple of examples based on real solar projects right here in Alabama. The first is a 6,000-watt solar setup at a residence in Huntsville. The up-front cost was $18,000, for an average expense of $3 per watt. Subtract $5,400 right away for the 30% federal tax credit that all new solar projects currently earn. That leaves $12,600 to pay off. In this example, 71% of the residence’s energy needs would be offset by solar, which means that household would only need 29% of its energy from the grid—and would thus pay only about 29% of its usual utility bill. Imagine the savings.

Thanks to TVA incentives, going solar in Huntsville has certain advantages.

In addition to that, the TVA pays solar customers the current retail rate for any electricity they generate. (According to the Huntsville Utilities website, the current rate is $0.08856 per kilowatt-hour for the first 1400 kWh.) This fair purchase price reduces the payback time considerably. For our example project, the estimated payback time is 10-12 years.

Think about that for a moment. Sure, 10 or 12 years might sound like a long time up front. But for residential solar generators, that timeline makes plenty of sense. After a dozen years or so, your solar system would produce pure savings. So if you’re in a house for 20 or 30 years, the incentive is strong. And if you build your solar array at the time of purchase and roll the cost into your mortgage, your earnings from selling electricity could be greater than the increased cost to your mortgage.

Either way, all of the savings come from simply running your system as you normally would any other time. So it’s not like you have to change any behavior drastically. Even better, you’re investing in yourself and your home.

Why incentives matter

The incentives for going solar in TVA territory are less enticing than they used to be. But then again, solar prices have dropped dramatically. That said, TVA’s stance on renewables is the best in Alabama. To understand why, let’s look at another example project, this one in Birmingham. 

Instead of reaping the benefits of incentives, many potential solar homeowners in Alabama are penalized by being charged a grid access fee. That means solar generators incur an extra tax of $5 per kilowatt of capacity to connect their system to the grid. This fee, which is one of the highest of its kind in the country, can reduce your monthly solar revenue by as much as 50%. Non-solar customers do not pay the fee.

Furthermore, most solar producers in the rest of Alabama are only paid what is known as the avoided cost. As of this writing, that’s approximately $0.025/kWh. This “avoided cost” represents a buyback of less than one-fourth of TVA’s and seriously dampens your return on investment.  This makes it virtually impossible for our example system in Birmingham, or any grid-tied residential solar array in the bottom two-thirds of Alabama, to pay itself off, regardless of how long it’s in service.

Of course, commercial solar is different. More on that next time!

Net Zero House

TVA’s Distributed Generation Integrated Value Report – What It Means

In October, the Tennessee Valley Authority (TVA) released its Distributed Generation Integrated Value Report (DG-IV). Sounds great right? But what does it actually mean?

Why was this study done?

Good question and we’re glad you asked. TVA has operated a variety of distributed energy programs, mainly for solar, for the last few years. You may have heard of Green Power Providers or Generation Partners. Regardless, this study was completed to attempt an answer for one simple question.

How much money is distributed energy worth to TVA?

This question was brought to light because of three main factors, although many more exist.

  1. Solar, along with many other distributed generation technologies, has become much cheaper.
  2. TVA has traditionally paid above retail rate for distributed energy whereas many utilities pay retail or below.
  3. The market has repeatedly complained about TVA’s program structure. Why? Most solar companies express frustration at the low and arbitrary caps places on distributed energy which leads to the program only being open for a short amount of time. It’s hard to build a business, no matter how great the incentives, when you can only work for a few months a year.

What does this study say?

This study basically concludes that distributed energy, specifically solar, is worth 7.2 cents per kilowatt hour (kWh) to TVA. Average retail rates in the TVA territory are about 10 cents per kWh and TVA is currently paying 10 cents per kWh.

So…

The study implies that solar is worth well less than what TVA currently pays for it. Almost 30% less.

How is that possible?

The best question you’ve asked! 7.2 cents per kWh doesn’t really tell the whole story. As you might imagine, there are a variety of things that must be factored in order to determine what solar or any other distributed generation is worth.

And here’s where the fun comes!

As they say, the devil is in the details.

What was factored in the 7.2 cents per kWh?

  • Not building new power plants
    • Ex. Not having to build a new natural gas plant or its related maintenance
  • Not having to buy fuel
    • Ex. If sun is available the fuel is free which offsets the amount of natural gas that must be purchased at that point in time.
  • Not paying environmental fees
    • Ex. Avoiding the need to purchase new scrubbers for a plant because energy is coming from a cleaner source.
    • Ex. Selling renewable energy credits on the open market
  • Fewer power lines
    • Ex. When energy production is placed near the site of consumption, less power lines are needed to carry large amount of power from one place to another.
  • Not losing energy during transmission
    • Ex. When energy is transmitted over long distances some of the energy is lost. However when energy production is places near the site of consumption there is less opportunity to lose energy.

What are some things that weren’t factored in the 7.2 cents per kWh?

  • Economic development
    • Ex. The benefits brought to TVA to and the regional economy from a thriving solar market. Increased market activity increased the demand for energy.
  • Customer satisfaction
    • Ex. The value of happy customers who prefer cleaner sources of energy.
  • Security enhancement
    • Ex. The value of reducing power outages due to backup sources placed throughout the Tennessee Valley.
  • Disaster recovery
    • Ex. The value of restoring power quicker due to the flexibility of distributed energy resources.
  • Carbon emissions
    • Ex. The value of cleaner sources of electricity should a cost on carbon emissions be adopted nationally.

Summing it all up

There are ton of ways to slice and dice this report as well as the methodology. Most simply, it’s a good start. But just a start. By leaving out so many possible value streams of distributed energy, solar is getting short changed. However this report is only a first step in determining a fair market value for distributed energy 24/7/365. Additional work will be needed to understand and compensate solar, and other distributed energy sources, for the full value they bring to TVA.

Also don’t forget that you don’t need to connect to TVA’s grid to go solar. You can self consume! And as battery technology continues to get cheaper, you may be able to start storing as well.

Go solar. Get a free solar survey.

To read the full DG-IV report for yourself, please visit: https://www.tva.gov/file_source/TVA/Site%20Content/Energy/Renewables/dgiv_document_october_2015-2.pdf

 

 

TVA’s Integrated Resource Plan – What it Means

Recently the Tennessee Valley Authority (TVA) Board of Directors approved an updated Integrated Resource Plan (IRP). That sounds great! But what does it really mean?

What is an Integrated Resource Plan (IRP)?

Most simply, an IRP is a common planning tool in the electricity sector. This planning tool helps utilities look into the future to weigh a variety of different possible scenarios and strategies. Utilities do this in order to determine pathways in which they can meet their goal of providing electricity to their customers. Scenarios are things that are outside of the utility’s control like general economic conditions such as a recession. Strategies are inside the utility’s control and provide ways the utility can meet its goals given external scenarios.

Goals will vary from utility to utility but most have a few in common. They are:

  • Providing electricity to its customers at the lowest cost possible
  • Maintaining or improving reliability of the electric system

Some utilities also have environmental goals such as an emissions target.

Why have an IRP?

The world changes, and it changes fast. In TVA’s case, they produced the most recent IRP sooner than they originally anticipated. They did this because the world, or the external scenarios, changed significantly since the last time the IRP was completed.

We’ve all seen what these are in our every day lives. Solar and wind prices are dropping at an extremely fast pace. The advent of fracking is driving down the cost of natural gas. Policy changes at state and federal levels have also changed with the Clean Power Plan and others. The factors significantly change how utilities can meet their goals, many of which they may not have foreseen.

What does TVA’s new Integrated Resource Plan say?

Good question! There isn’t a true single answer for this question. The reason is, by the nature of the document, it says a whole lot of things are possible. For instance, if the United States goes into a recession TVA must make significantly different choices than if we experience sustained economic growth.

However there ARE some generalizations that can be drawn from the document. By looking across all the scenarios and strategies you can see some patterns emerge. These are:

  1. Increased use of natural gas
  2. Decreased use of coal
  3. Use of energy efficiency as a generation resource
    1. Note: There are two ways to meet electricity demand. Traditionally we build power plants to supply whatever people need. However, saving electricity acts just like building a power plant. Studies have shown that energy efficiency is the cheapest source of electricity.
  4. Increased use of solar
  5. Increased use of wind
  6. No additional “base load” power needed
  7. Increased diversity of electricity sources

The scenario and the strategy determines exactly how much of the above you might expect to see. However these generalizations hold true.

Of course the devil is in the details as they say. For instance the use of solar varies widely from scenario to scenario.

The IRP was approved. What happens next?

You ask really good questions! Now that the IRP is approved by the Board of Directors it serves as the official plan of TVA to chart its electricity future to 2033. However the IRP is just a plan. It isn’t a document that says anyone has to do anything. After all the world changes fast. TVA itself has recommended an update to this plan in no later than 5 years from now.

Think of the IRP as merely a guide to help frame electricity decisions as time goes on. Things will change but the collective decisions made by TVA and its board should reflect the overall direction of this document.

Lastly, we must note two things. First, TVA should be commended for an extremely open public engagement process when they were preparing the IRP. They listened to regular folks, businesses, environmental groups, industry groups, local power companies and more. Second, you too can take part in this process to make your voice heard. Next time around, make sure you are engaged throughout the process to help TVA be the TVA you wish to see!