This is part two in a five-part series about the SACE “Solar in the Southeast” 2017 Annual Report. To view other blogs in this series, click here.
Rapid Growth & Tremendous Potential
“The Southeast has tremendous solar potential (second only to the desert southwest) and has been experiencing near exponential solar growth for the last five years. The region will have over 10,000 MW by 2019 — and approximately 15,000 MW by 2021.”
This was one of the key observations highlighted in our Solar in the Southeast 2017 Annual Report issued on February 27. Solar has been one of the most vibrant segments of the U.S. economy and that is particularly true in the Southeast.
Case in point: The Solar Foundation recently released their National Solar Jobs Census. Solar jobs in our seven-state, Southeast region continued to increase, from 27,000 in 2016 to over 29,000 in 2017.
In 2012, the Southeast had less than 200 megawatts (MW) of solar. That has now grown to 6,000 MW (or 6 gigawatts, GW), with corresponding generation that represented about 1% of retail sales in 2017.
SACE’s forward-looking forecast is based predominantly on what utilities themselves have announced. And we anticipate solar growth continuing to over 10 GW in 2019 and approximately 15 GW in 2021.
Distinctions Amongst The States
Solar growth in the southeast is not uniform; all states are NOT equal. Favorable policies (legislative and regulatory) initiated growth in North Carolina, South Carolina, and Georgia. Two major ballot initiatives in Florida (2016) enabled scale-up of solar in the Sunshine State. Tennessee, Alabama, and Mississippi, on the other hand, operate in a public policy vacuum. Consequently, those states projections remain less than half the region average through 2021.
North Carolina is southeast leader (#2 in the country, behind California) in solar capacity will retain that southeast leadership position through 2021.
Florida will overtake Georgia and move into the second slot based on several major utility-scale announcements from 2017. Smaller-scale, distributed generation is vulnerable as some utilities revise their “net metering” approach. (We’ll address challenges and opportunities for distributed generation in part four of this series.)
Georgia continues steady progress with utility-scale solar development. Alabama and Mississippi have been identified recently among the fastest growing solar states in the country albeit with a rather small base.
Tennessee had been an early leader in small-scale, distributed solar, but the Tennessee Valley Authority (TVA) has modified their programs and throttled expansion of customer-sited solar. Even the utility-scale projects that TVA has done do not keep pace with other similarly-sized utilities in the Southeast.
For example, TVA issued a Request for Proposal (RFP) in 2017 for 200 MW of solar. Around that same time, Florida utility JEA (Jacksonville Electric Authority) secured approval from its Board for 250 MW of solar. But JEA is 1/10 the size of TVA (serving 450 thousand customers compared to TVA’s 4.7 million). Net, net, TVA’s solar ambition needs to be at least an order of magnitude higher to keep pace.
A bit more on TVA…
Customers in Tennessee have limited opportunity to influence their utilities power choice because TVA is a federal utility, not subject to federal or state regulatory oversight. TVA is a federal monopoly and is the second largest utility in the southeast. The TVA service territory covers 99% of the state of Tennessee (along with parts of four other southeastern states: Alabama, Mississippi, Georgia and North Carolina, as well as parts of Virginia and Kentucky). Despite serving 16% of customer accounts in the Southeast, TVA represented a disappointing 6% of the total solar in the Southeast for 2017.
TVA prohibits “net metering” – a billing practice to support customer-owned solar that exists in 38 states. Instead, TVA buys all the power owners generate, and requires them to buy all the power they consume from the local power company (LPC). This system reflects TVA’s monopoly control over power generation. For 2018, TVA has lowered the rate they pay for solar power produced by these Green Power Providers to below the average retail rate the LPCs charge those same customers for their electricity consumption.
SACE is a proud member of Tennesseans for Solar Choice – a diverse and multi-partisan coalition, working to remove the market barriers and enable the fair expansion of solar power to benefit all Tennesseans.
Click here to learn more: https://www.tnsolarchoice.org
Is Solar Growth Sustainable?
From a technical standpoint, Yes; we are well short of any level where responsible analysis suggests there are risks to grid operations. The 15,000 MW (15 GW) projected for 2021 corresponding to solar generation less than 3% of retail sales for the Southeast. Even North Carolina, projected to achieve 6% of retail sales in 2021, could accommodate even more solar. Certainly there can be issues at specific locations – due to overly concentrated solar development or poorly matched utility grid technology. But SACE’s analysis in numerous utility regulatory proceedings shows that no one has seriously identified circumstances where system operations are going to be taxed.
On the other hand, the solar industry does face some political and economic headwinds. The projections for our Solar in the Southeast 2017 Annual Report were completed before President Trump decided to impose new tariffs on imports of solar cells and modules. Early assessments of the new tariffs suggest job losses of 23,000 in the solar industry this year (2018) and an 11% slowdown in solar installations through 2022 — with some southeastern states disproportionately affected. Much of the growth in the SACE forecast represents existing contracts and commitments that remain highly certain. And the new tariffs just became effective on February 7 so the SACE forecast can serve as a gauge of how significantly the President’s decision affects solar growth in the Southeast.
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