From our friends at Alabama Center for Sustainable Energy
JANUARY 25, 2016 BY DANIEL TAIT
In October, the Tennessee Valley Authority (TVA) released its Distributed Generation Integrated Value Report (DG-IV). Sounds great right? But what does it actually mean?
Why was this study done?
Good question and we’re glad you asked. TVA has operated a variety of distributed energy programs, mainly for solar, for the last few years. You may have heard of Green Power Providers or Generation Partners. Regardless, this study was completed to attempt an answer for one simple question.
How much money is distributed energy worth to TVA?
This question was brought to light because of three main factors, although many more exist. Solar, along with many other distributed generation technologies, has become much cheaper.
TVA has traditionally paid above retail rate for distributed energy whereas many utilities pay retail or below.
The market has repeatedly complained about TVA’s program structure. Why? Most solar companies express frustration at the low and arbitrary caps places on distributed energy which leads to the program only being open for a short amount of time. It’s hard to build a business, no matter how great the incentives, when you can only work for a few months a year.
What does this study say?
This study basically concludes that distributed energy, specifically solar, is worth 7.2 cents per kilowatt hour (kWh) to TVA. Average retail rates in the TVA territory are about 10 cents per kWh and TVA is currently paying 10 cents per kWh.
The study implies that solar is worth well less than what TVA currently pays for it. Almost 30% less.