Is Georgia’s summer sizzle causing an icy market for solar power?

As the country discusses our future direction for energy, infrastructure and even automobiles, Georgia is having its own energy discourse. The Peach State is in a vital battle for rooftop solar and keeping the high-tech and blue-collar jobs this burgeoning industry has already created.

Rooftop solar applications to Georgia Power have skyrocketed since 2019 – up 320% in 2020 and 863% in 2021. But the solar installations, jobs and innovative companies setting up shop in small towns across our state are all about to stop.

An artificial “cap” was put in place in 2019, when the Georgia Public Service Commission changed how rooftop solar power is valued. Only 5,000 Rooftop Solar installations were approved by the PSC. For these 5,000 installations, the solar power generated is compensated via a method called “Monthly Netting,” which is a fair way to compensate for rooftop solar installations. With Monthly Netting, surplus solar energy is credited against your monthly power bill, unit for unit. For anyone outside this fortunate group of 5,000, the rates for the surplus solar power generated will now be the wholesale rate, about one-fifth the rate charged on a monthly power bill.

The consequences of ending the PSC’s program will become evident quickly by the reduced number of rooftop solar applications at electric utilities across the state. That means people’s jobs will be ending, and the jobs will stay gone if the cap isn’t removed.

We can look at other states that have been in a similar situation. Nevada is a great example (see the documentary Happening: A Clean Energy Revolution). When Nevada’s Public Utility Commission changed from Monthly Netting to a wholesale rate approach, the rooftop solar market came to a screeching halt. Multiple solar companies significantly cut jobs, and some left the state altogether. In addition, those customers who had solar already were abruptly faced with much longer payback periods on their solar investments.

In Georgia, many solar companies will either close or leave the state. I don’t plan to pack up and leave Georgia though. I’m going to stay in the fight to make solar more accessible to the people of my home state.

Rooftop solar advocates have a few paths forward to keep the state’s utilities from underpricing solar power. Georgia Senate Bill 299, sponsored by Chickamauga Republican Jeff Mullis, is set to be voted on in early 2022. It will establish Monthly Netting as the statewide law. SB 299 would also remove obstacles such as the discriminatory fees some utilities impose on rooftop solar.

Another potential avenue would be for the PSC to address the issue sooner, but some of the commissioners have already signaled they intend to wait until considering a new rate case in 2022. A few PSC members seem more open to doing something now. The PSC has five Commissioners, so only three votes are needed to “Scrap the Solar Cap,” as the Georgia Solar Energy Association’s campaign has been dubbed.

Currently, Georgia is among the top 10 states in total solar power installed. Unfortunately, we rank near the bottom (41^st) for rooftop solar installed. While Georgia utilities are thankfully installing a large number of solar arrays, rooftop Solar – where home and business owners install solar panels on their property – has numerous artificial obstacles standing in the way of the free market.

The main barrier is not the price of installing solar, but the price utilities are willing to pay businesses and consumers for their solar power. There are three methods of compensation that power companies can choose:

• “Instantaneous Netting” – All excess generation is sold at wholesale rates (about one-fifth of the retail rate that utilities charges end-users for electricity).
• “Monthly Netting” – Excess generation is netted against the consumption shown on the monthly power bill, which essentially gives solar the same value as the retail rate of electricity. Any production exceeding the monthly consumption is sold at the cheaper, wholesale cost.
• “Annual Netting” – Excess generation is netted against the consumption shown on the monthly power bill. Any production exceeding the monthly consumption carries over to the next month. Any production exceeding the annual bill is calculated at the end of a 12-month cycle and sold at avoided cost.

Most of the power utilities in Georgia use Instantaneous Netting which provides the most benefit to the utility and the least benefit to the business or homeowner with solar power.

The truth is solar energy and other Distributed Energy Resources could benefit all parties involved. It can vastly improve how we generate and distribute power, plus make the grid so much more resilient. Unfortunately, though, most utilities are choosing the path of self-interest, clinging to their legalized monopoly, absent any real competition while enjoying a guaranteed profit. Can we blame them? I suppose not. But we can push back, and we can hold them accountable for delaying the future we all deserve. One way or another, I believe the U.S. Energy Information Administration is correct when their models show that renewable energy will provide nearly half of the world’s electricity by 2050. Some localities will just take longer than others.