Area energy firm hopes solar power partnership program works out
7/10/2010
On a five-acre plot in East Knox County, rows and rows of steel frames are being outfitted with the 4,608 photovoltaic panels it will take to make one megawatt of solar power.
As the solar power station takes shape, the project's investors wait to see if this will be their first and last investment in large-scale solar power production in Tennessee.
Earlier this month, Natural Energy Group began installation of what by all accounts will be the state's first one-megawatt solar system, producing enough electricity to power about 1,000 homes. At nearly the same time, TVA announced it was putting a hold on its incentive program, called Generation Partners, for customer-owned renewable power generation due to an influx in applications for the program. Twenty to 30 percent of those new projects, TVA officials said, were larger solar or biomass systems that would have exhausted the 200-megawatt, $50 million limit of the pilot program.
Since then, TVA has reinstated Generation Partners for renewable power installations of 200 kilowatts or less, but it still is evaluating what to do with larger systems, four of which the federal utility already had approved and a number of which are in the pipeline - including the local megawatt project.
As TVA reviews its options, solar installers, finance companies and businesses looking to invest in the systems nervously await the outcome.
Over the past year, tax incentives, state and federal grants and utility programs such as Generation Partners have helped drive growth in the industry across the state. With more large projects either in the construction phase or under consideration, businesses are hoping TVA will choose to allow current projects to go forward and pave the way for more such projects in the future.
Natural Energy Group was founded and funded by a group of local investors led by Mike Malicote with a mission of helping organizations like cities, airports and government organizations get into large-scale solar power. The initial project will help show the potential of the technology, said Harvey Abouelata, vice president of sales and marketing at Powell solar power system design and installation firm Efficient Energy of Tennessee, with which the Natural Energy Group has common ownership. Efficient Energy of Tennessee President Robbie Thomas also is an investor in Natural Energy Group.
"You're always trying to figure out the best model of how to make these cost effective," Abouelata said. "There were some partners that really saw the need for this energy and solar and thought, 'If we can put this thing out as a demonstration … that's going to put EET in the megawatt business."
Bigger equals cheaper
Given the number of proposed solar power projects across TVA's territory, according to John Trawick, TVA senior vice president of commercial operations and pricing, more companies have been figuring out the formula for larger-scale solar power production.
"The two things I've heard from developers and distributors," he said, is "they're starting to see some more competitive pricing with solar in particular. And then I think we're naturally seeing some of the incentives … providing the opportunity for folks to make those projects more competitive."
Prices for the systems have dropped 30-35 percent over the past year said Gil Milear-Hough, former Tennessee director of renewable programs for the Southern Alliance for Clean Energy and now renewable energy manager for Restoration Service Inc. in Oak Ridge.
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