Solar power bill would give Georgians more choices

By Guest Columnist JOHN SIBLEY, senior policy fellow at Southface Energy Institute and former president of the Georgia Conservancy

Have you gotten used to thinking you have no choice on your power bill? We can’t choose our power company, so most of us pay the bill without looking past the total amount due – without even thinking about the amount paid for each kilowatt-hour or whether we have better choices.

Times are changing. More and more of us are discovering choices for managing our power costs. Beyond the time-honored practice of turning off the lights leaving the room, we can find light bulbs that pay for themselves in a year or so; and we can find appliances, water heaters, and air conditioners that pay for themselves in a few years. After that, the savings are like getting part of your power free.

John Sibley

Now, on-site solar power has become an economical option for many. Deals for rooftop solar panels can be done in Georgia today that will provide power for 25 years for as little as 10 cents per kilowatt-hour. Many Georgians can save money from day one. Since rates in Georgia have gone up 49 percent in seven years, they can also protect themselves against increases.

More and more Georgians are choosing on-site solar, but not all can. The upfront costs are too high for some. The cost is usually too much for schools, churches, governments and other non-profit organizations, which often have perfect locations for solar installations, because they cannot take advantage of tax incentives available to others.

Across the country, free enterprise has responded by doing what it does best. It has come up with a financing product, called a power purchase agreement, or PPA, that makes solar power available to those who are otherwise excluded from the market.

Under a typical PPA, the installer retains ownership of the solar equipment, and the customer makes monthly payments that are based on the output of the panels. A PPA allows the customer to choose solar power without any upfront costs or maintenance risks, and it makes the tax incentives available to private parties who can use them. A PPA can reduce the cost of solar for schools, churches, governments, and non-profits by 40 to 50 percent.

PPAs can be used in most states.

In Georgia, however, the power companies say that they are against the law. The utilities concede that a solar system for on-site use is perfectly legal if the customer pays cash upfront or can get a loan or a lease with a flat monthly payment.

But if the monthly payment is based on output (as it would be in the lease of a copier based on the number of copies), the power companies will object to the deal and threaten a lawsuit to stop it.

The sunlight, solar panels, and connection to the grid are the same. The grid can’t tell the difference in the electrons. The power company can’t tell the difference in any impacts on its system or its sales. The only difference is in the kind of private contract the customer chose for acquiring solar power. How can a customer’s choice to manage energy on the customer’s private property become against the law because a lease payment is based on output instead of a flat amount?

Legislation has been proposed in the General Assembly this year to clarify this situation by expressly authorizing PPAs. In an op-ed published in the Savannah Morning News on Feb. 27, Georgia Power opposed this legislation.

Georgia Power argues that solar power financed with PPAs would reduce sales and cause other customers to have to pick up a bigger share of the utility’s fixed costs.

Georgia Power does not argue that it should be against the law for you to turn off lights, buy efficient lighting or appliances, or even pay cash for a solar system. All of those choices are conceded to be legitimate, even though all of them reduce the sales available to cover fixed costs. Georgia Power just argues that it should be against the law for you to have solar power with a lease that is based on output.

Georgia Power seems to be saying that the only way it can keep rates down for other customers is to maximize sales by prohibiting on-site solar power for those customers whose only practical choice is a PPA – customers of modest means, schools, churches, governments, and other non-profit organizations.

It is absolutely not the responsibility of customers to buy power they don’t need or want so that power companies can maximize sales. Those for whom PPAs make sense should be able to choose solar when it is in the best interests of their families and businesses.

Georgia Power argues that PPAs will create unregulated utilities. Utilities are regulated because they have a monopoly – because customers aren’t protected by free choice in a competitive market.

But a customer who wants on-site solar power has many choices of panels and installers and even some choices of financing. There is full-scale competition in the solar business. Imagine the world in which we tried utility-style regulation of every solar installer who offered PPAs as a financing option.

The legislation in the General Assembly, originally proposed as SB 401, just allows one additional choice to manage rising power costs by private contract on private property. It creates no risks for power companies or other customers that are different from when customers now choose energy efficiency or solar for cash.

The General Assembly should find a way to pass this legislation.

6 replies
  1. rjg says:

    John – Please let us know if there is a concerted effort to help support this legislation, and the steps we could take to help out or demonstrate support.Report

  2. middleground says:

    As soon as we stop allowing both local and state governments to stealth tax us on our power bill, our bills would drop in half.  So by forcing power companies to buy energy you will drive our costs up just like California.
    Governments are using all utilities to stealth tax us to death.Report

  3. ccollier says:

    The bill is stalled in the Natural Resources and Environment Committee, because the Chair,Sen. Ross Tolleson has “decided” he won’t put it on the agenda for their hearings.    You can call or email his office and demand that it be heard in his committee by tomorrow! 404-656-0081  [email protected]      Or we can mount a massive campaign during the summer and demand hearings on it so it SAILS THRU next year.  (Another year of tax benefits and lower electric rates to churches and schools LOST.)    The Georgia Sierra, Southern Alliance for Clean Energy, and many other environmental groups are lobbying for this bill, as even the RiverKeepers organizations see clean energy as a way to protect our clean water.    A popular blog site here in Savannah is:

  4. KyleSager says:

    “Times are changing.”  Spot on.  The Territorial Services act was for another era and other technologies.  The data in this report are culled from BP data (note the data came from an oil company) >  The trend defies conventional economic patterns.  The trend betrays itself for what it is: the signature of a disruptive technology.  One of the best things Atlanta press can do to shed light on the change is to continuously highlight other states…and big businesses…and homes using PPA financing early and often.   A national leader in the trends is SolarCity in California.  In one post they mention just a few companies using PPAs: Whole Foods, Intel, Wal-Mart (Recently Campbell’s Soup with another provider in Ohio).  Here is a Wal-Mart case study.  While Territorial protection may still make some sense for transmission: It makes far less sense for electricity PRODUCTION as time progresses.  We are entering a new era.  Power production should not be so protected.  We are sitting on our hands far too long.  Note that Elon Musk is the chairman of SolarCity.  Look at his aggregate track record.  Even the Vice Chairman of GM finally very politely acquiesced and admitted Musk blew the electric car market wide open.  He did so very publicly.   At Telsa’s outset, the world had half laughed at Musk.  You decide whether or not Musk is right about where things are headed.  SolarCity may or may not be the company that makes dramatic strides here in Georgia.  However it happens it must involve PPAs and lots of free competition, and many current conversations are directed intensely at obfuscating the aggressive global trends that are really at play.
    Now, you know it and I know it: Southern Company is playing hardball on lobbying PPA legislation to sleep.  Bottom line: You will see accelerated examples of all of the above cases (businesses, homes, solar farms…more and more) due to the unavoidable trend Gregor MacDonald elucidates.  As long as we keep the shades pulled open and let the light flood in on the topic (the companies, the states, the homes with PPAs)…it only becomes more and more obvious how we Georgians are being hamstrung from keeping up with everyone else on important new global technology by incumbent energy producers.  I believe, very strongly, that the longer they stall us the more we should expect to extract far larger compromises later when the switch to open up the markets finally occurs (as should happen right now). We will need to point back to today and say, “We told you and we told you very loudly.  You had your chance.”  And we should at that point consider finding ways to bring other transmission/smart-grid competitors in.
    The eventual opening up of markets is inevitable.  So if they hold us back longer then they should pay dearly when the time comes.  They owe the southern states more than they’re willing to give.  Georgians should not be artificially blocked from engaging critical emerging technologies.
    Great article.  Thank you for writing it.Report

  5. KyleSager says:

    One other thing…When PPAs do come to Georgia (who knows when…but they are inevitable) The battle will remain on to keep the public liberally informed on how well the legislation functions: Whether it helps or hinders a robust market.  We can already see these conversations..years before they happen.  This is a very unusual situation because of the global trend and because as an acquaintance in the solar industry confided/agreed, “We really are the last corner on earth for this to be happening…”  We deserve far better.  Thanks again for a fantastic article.Report


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