Tuesday, November 1, 2011

Solar Industry Says Law Hinders Growth

Hearts raced a little in Georgia's solar industry when Internet giant Google announced last month it was investing another $75 million in solar installation companies.

The search-engine firm said it was making the investment to make it easier for homeowners to afford photo voltaic panels for their roofs.

The company is adding it to $850 million already invested in renewable energy projects, and the Georgia companies that produce and install the panels hope to reap the benefits.

But homeowners here may not.

That's because a provision in Georgia law stands in the way. And the Georgia Solar Energy Association wants the legislature to change it.

"If it's a straight-up economic argument, it's not about global warming or tree hugging. Then, a businessman would say it's an economic-development issue," said Lee Peterson, a tax attorney with Reznick Group in Atlanta.

He argues that homeowners and business owners are having to pay extra for electricity because they can't make use of financing arrangements like Google and other companies offer. When the state's unemployment rate hovers above 9 percent, those energy savings could be used to create jobs.

The hang-up is part of the Territorial Electric Service Act of 1973, a law that divides the state into zones where Georgia Power, 52 cities and 42 cooperatives each have a monopoly.

"It's a fairly complicated issue," Peterson concedes.

The Territorial Act means no one else can sell power, except to a utility, even someone owning a few solar panels.

Anyone can own panels to produce electricity for their own use, and utilities even have to buy the excess. And leasing solar panels is legal, but not having someone else own the panels, according to the law.

It's keeping companies like Radiance Solar based in Atlanta from being able to do in Georgia what others have done in various states. Radiance would like to offer 50 schools the chance to buy low-cost solar power from it in exchange for the use of their roofs to install the needed panels.

Radiance would use state and federal tax breaks to help finance the deal. Since schools don't pay taxes, they can't use the tax breaks and wouldn't be able to afford having solar power otherwise, according to James Marlow, Radiance's chief executive.

Such purchased-power agreements are accelerating solar installations where they're available.

"It will significantly impact the size and number of projects that can be done," he said.

Even giant retail chains with deep pockets like Wal-Mart use the agreements because the other party installs and maintains the panels.

The electric utilities say arrangements like Wal-Mart has skirt important consumer protections Georgia's law imposes on them in exchange for getting a monopoly. They are required to serve every customer around the clock, and a third party supplier, like Radiance, wouldn't incur similar costs.

"There would be an inherent cost shift onto the host utility's remaining customers, causing the other customers to be responsible for the cost of maintaining infrastructure and back-up generation required should the third-party generator fail to perform for any period of time," said Terri Statham, media-relations manager for the Georgia Electric Membership Corp.

Georgia Power, the state's largest utility, offered a similar statement.

"What Georgia Power is opposed to is third parties selling electricity in violation of the Territorial Act and shifting the consequences of such sales onto other customers as well as engaging in sales of electricity without appropriate regulatory oversight," said spokeswoman Lynn Wallace.

Challenges to the law would wind up before the Public Service Commission, but every developer considering it has so far backed off in the face of threatening letters from utilities.

In general, the law has worked well, according to Stan Wise, chairman of the state Public Service Commission. It has essentially prevented redundant and costly transmission lines and market confusion, even though some questions regularly come before the commission about who supplies individual, large customers.

Lauren "Bubba" McDonald was in the General Assembly when the Territorial Act was fiercely debated and passed. Did anyone at the time think it would impact the growth of solar energy?

"Of course not, we didn't know what the word meant then," said McDonald, who is now a member of the Public Service Commission and regular speaker at the Solar Association events.

Even though solar wasn't part of the debate then, there were other, powerful, competing interests pressuring lawmakers with lobbyists and sacks of constituent letters. A new battle could be just as contentious because it has been a settled issue for so long.

SOURCE: http://www.times-herald.com/local/Solar-industry-says-law-hinders-growth--1886348

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