Tennessee has a lack of solar policy, and since 2019, hydro development has been relatively dead. While distributed rooftop solar has little support, corporate-backed utility-scale solar is expected to rise.
November 8, 2022 Ryan Kennedy
Tennessee is home to the Tennessee Valley Authority (TVA), a state-owned utility that is famous for leading historic court cases against the deployment of clean energy. There is a clear lack of support for distributed rooftop solar for small and medium businesses and homeowners. Instead, the state’s small solar exposure is largely characterized by large-scale projects built for corporations to achieve environmental and social governance (ESG) goals.
The Tennessee Valley Authority (TVA) serves 10 million people across 80,000 square miles of the southeastern United States, beyond its state borders. The company has stated that it aims to have up to 10 GW of solar power by 2035 and more than 200,000 EVs on the road by 2028. The utility expects to have approximately 2.8 GW of solar power at TVA by 2024.
However, the company’s 2021 sustainability report disclosures state that TVA only has 1 MW of operating solar capacity and no wind assets as of the 2021 fiscal year report. Instead, TVA’s developers are acting as owner-operators so that they can access the federal investment tax credit incentive, an option that TVA as a government entity does not have access to.
While TVA will issue a request for proposals (RFP) this summer for up to 5 GW of new clean power, much of that is expected to be nuclear and hydropower, which already make up a large portion of the utility’s asset base. TVA currently has 5.38 GW of renewable energy capacity, almost all of which is hydro.
(Read: “Court challenges TVA’s anti-solar ‘never-ending contracts’ with utility customers”)
TVA generation mix.
TVA said its Green Invest program has led to nearly $3 billion in solar investment since 2018. A big driver of growth in this program is contracts with large corporations such as Google, Meta (Facebook) and others.
Overall, Tennessee has 608 MW of installed solar capacity by the second quarter of 2022, according to the Solar Energy Industries Association (SEIA). More than 4,000 people are employed in solar energy in the state and $918 million has been invested in solar energy in the state. .
Tennessee is doing little to support the deployment of distributed, rooftop solar, which is seen as a solution for increasing grid resiliency, improving environmental impacts and bill savings for individuals and small businesses.
Currently, the state does not offer net metering or excess solar production buybacks, which are often critical to the economics of rooftop solar. There are also no standardized rules for connecting the roofing system to the electrical grid. TVA instead offers a program called dual metering, which is explained in the graphic below.
Tennessee has a solar law that protects a homeowner’s right to open access to the sun on their roof, preventing others from building structures that shade the panels.
While most states allow solar energy to be exempt from property taxes, they instead limit the amount that can be taxed. For tax purposes, your property’s assessed value increase cannot exceed 12.5% of your installed solar costs. It also exempts sales taxes on equipment and materials purchased by commercial and industrial customers.
Most support for solar power will be found at the federal level. Investment Tax Credit (ITC) has been extended only for long term and direct payment provision has been added. ITC provides a 30% credit towards the cost of the installed system.
The 150 MW Elora Solar project, led by NextEra Energy Resources, marks one of the largest solar installations in the state. The project went into commercial operation in May 2022. The 500,000 panel system took 17 months to build and created around 250 jobs.
The project partnered with Facebook to power Meta’s data center operations in Huntsville, Tennessee, northwest of Knoxville.
“TVA is building a greener future that leaves no one behind in the new clean energy economy,” said Doug Perry, TVA senior vice president of commercial energy solutions. “This public-private relationship demonstrates the power of TVA’s community energy model to attract high-quality jobs to the communities we serve while helping businesses meet their sustainability goals.”
The next one
pv magazine last stopped by Kentucky to explore the landscape of solar power installations, and we’ll be traveling to Alabama next.
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