Over the past couple of years, community solar models have grown in popularity nationwide in the United States because they provide an effective opportunity to drive down solar energy deployment costs by leveraging community involvement—and they offer a “clean” source of electricity backup when the grid is at peak capacity.
In Seattle, for example, the city’s first project at Jefferson Park is producing about 25,000 kWh of electricity per year. Even more impressive, Salt Lake City started 2013 with nearly one-quarter megawatt of new residential solar capacity, thanks to Salt Lake Community Solar (a project of Utah Clean Energy (News - Alert))– saving homeowners close to 40 percent on their solar systems through a bulk purchase.
Now, the Tennessee Valley Authority has launched a community solar initiative— the Solar Aggregated Value and Education (SAVE) program—through which it proposes to install at least 500 kilowatts (kW) of photovoltaic (PV) generation at TVA facilities, TVA directly served customer locations, or other government-owned facilities, including local public power companies served by TVA. The authority will maintain the PV installations for a minimum of 20 years.
The Knoxville-based TVA, a corporation owned by the U.S. government, provides electricity for nine million people in parts of seven southeastern states—Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia–at prices below the national average.
SAVE represents the first of 11 projects TVA is launching as part of a Clean Air Agreement with the U.S. Environmental Protection Agency that supports TVA’s vision for low-cost and cleaner energy.
Raising Awareness, Reducing Costs
The objective of SAVE is for TVA to partner with the regional community to raise solar energy awareness and education, reduce solar energy costs, and to test the market for upfront Renewable Energy Credit (REC) purchases. RECs represent the property rights to the environmental, social and non-power qualities of renewable electricity generation. RECs are sometimes purchased to meet legislative or regulatory mandates, meet internal goals, support environmental stewardship and meet other objectives.
SAVE is unique in that it is testing the market for an upfront REC purchase from a locally generated facility over a 20-year period. The upfront purchase of RECs not only simplifies the REC transaction by making it a one-time event, but also serves as a REC hedge for future potential transactions. Additionally, the RECs are directly tied to local generation that is visible to the regional community (tangible RECs).
As a federal agency, TVA is unable to take advantage of existing federal tax credits and, therefore, is targeting a corporate entity that is able to access these benefits to fill the role as the PV system owner.
Three types of participants will benefit from the SAVE initiative—among them:
- TVA , which will meet its vision of providing low-cost and clean energy to its customers;
- The targeted PV system owner, ostensibly a company that desires Renewable Energy Credits (RECs) to meet corporate sustainable goals, environmental targets, and public relations benefits via a local and tangible solar project; and
- The targeted community segment, which will directly impact solar energy growth in the region and will be able to aggregate funding—instead of taking on costs individually–to directly impact the PV system size.
“We’re very excited to be releasing this innovative community solar model and look forward to seeing how our Valley customers, regional businesses and local residents respond,” said Neil Placer, TVA’s project leader for the SAVE initiative.
TVA issued a request for proposals (RFP) on Aug. 15 to identify community members interested in participating in the SAVE initiative. The RFP will be handled through a two-stage application process. The submission deadline for the concept paper proposal will be in November 2013, with the full application due in February 2014 for those selected past the first stage. Final selection of participants is planned for April 2014 and construction on the site will begin in 2015.
Edited by Alisen Downey