Sun Burned: TVA and State Legislators Combine to Handicap Solar Power Producers

On November 18, Knox County announced plans to install 63 solar arrays on county buildings. The project would cost the county nothing. In fact, it would generate revenue.

As December arrived, TVA announced it would reduce the price it pays Green Power Partners from 19 cents per kWh to 14 cents. Burchett immediately canceled the solar plans, claiming the finances no longer work.

Beneath the surface of this news lurks a foul stew of juvenile partisanship and corporate corruption. The American Legislative Exchange Council (ALEC) has placed solar power in its crosshairs—not for any rational reason, just to be vindictive. The solar industry has been a bright spot in the otherwise anemic economy, with Tennessee among the leaders.

No one who favors business and energy independence, which most Republicans say they do, would deliberately handicap an emerging economic sector, but that is what the Tennessee Legislature has done. Republicans claim they are opposed to new taxes, but the General Assembly raised the tax on solar facilities from 0.5 percent of assessed property value to 12.5 percent. Solar producers will be sending 25 times as much money to Nashville.

While arguing for this increase, the Haslam administration claimed the half-percent rate was so low as to be unconstitutional, yet oil and gas producers were allowed to keep paying that rate on their land.

Let’s stop pretending we have rational leaders and free markets. It might be true for widgets and pickles, but for many commodities an army of lobbyists, not a marketplace, sets the rules and picks the winners and losers. We lull ourselves into complacency with all our happy talk about free markets and capitalism, but does anyone really know what those words mean?

Capitalism describes a legal framework that favors capital. It is what allowed O.J. Simpson to go free while our jails disproportionately fill with poor black men. Capitalism is what allows BP to stay in business and write off billion-dollar ad buys while not one executive spends a day in prison for killing 11 workers and a huge portion of the Gulf ecosystem.

A free market is a more basic concept than capitalism, simply describing an economic system where buyer and seller are free to negotiate the price of goods. Any large economy will include a mix of free markets and restricted markets. How free are we when banks pull trillion-dollar heists and gas drillers poison groundwater with chemicals they refuse to name?

In a rational world, we would not need to subsidize solar power. Fair taxes on pollution and resource depletion would have evened the playing field for clean energy long ago. Instead, our energy markets are abused by the powerful.

TVA has arbitrarily changed their price for solar power, deciding that they should spend the same dollar amount this year as last, but purchase 7 percent more power. Solar power requires up-front costs for equipment, and these are inevitably paid back over many years as production catches up with investment. Changing terms and rules just a year or two into such agreements is abusive.

If TVA had any sense of fairness, they could grandfather existing producers or phase in price changes gradually. It is difficult to perceive their behavior as anything but kin to the irrational abuse ALEC desires for the solar industry. TVA CEO Bill Johnson is an ally of nuclear power, which has put TVA in deep debt, even as the federal government shoulders most of the risks of production and storage.

An honest look at coal, oil, and nuclear energy reveals gargantuan externalized costs, from abandoned messes to unaccounted risks to corrupt practices. But it is solar power that ALEC and Republicans have chosen to cheat and undermine.

Mayor Burchett was about to take a small step in a good direction, then TVA scrambled the rules and scared him off.

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Comments » 2

toonjee writes:

Lately we keep hearing about how the cost of solar power has dropped dramatically, if this is true why should not the TVA expect to benefit from the cost savings too? Why shouldn't they expect to pay less for more solar energy?

US solar power costs fall 60% in just 18 months: pv-magazine
http://www.pv-magazine.com/news/detai...

If solar power is so much cheaper and so beneficial, even income generating, why can't the local authorities and businessmen jump in and benefit from the income being generated without leaning on the TVA?

Why is there only benefit at long as some Tax funding is being thrown at it?

The truth, which the author of this post is hiding from readers is that Solar Power is still expensive and still very limited.

1) There is Zero Solar Power at night.
2) Daylight solar power varies from Zero to Maximum, and back to Zero.
3) You might get a lot of solar power at noon, (if there are no clouds), but you have to use it on the spot or lose it unless you also install very expensive and inefficient batteries.
4) Users of Solar power still end up paying for Coal/Natural gas/ Nuclear, because Solar Power is a hyped up Government propped up one legged duck that can't fly.

I credit the TVA for realizing how Less-Worthy the "Investment" is.

My impression from reading this is that Rikki is a Solar Zealot who cannot or will not see other's (TVA) point of view, and who wants the Taxpayer to fund his/her dream projects, whether it is reasonable or not.

Your ravings against Republicans and Capitalism just pegs you for and ideology driven zealot, not as an honest broker.

Rikki writes:

in response to toonjee:

Lately we keep hearing about how the cost of solar power has dropped dramatically, if this is true why should not the TVA expect to benefit from the cost savings too? Why shouldn't they expect to pay less for more solar energy?

US solar power costs fall 60% in just 18 months: pv-magazine
http://www.pv-magazine.com/news/detai...

If solar power is so much cheaper and so beneficial, even income generating, why can't the local authorities and businessmen jump in and benefit from the income being generated without leaning on the TVA?

Why is there only benefit at long as some Tax funding is being thrown at it?

The truth, which the author of this post is hiding from readers is that Solar Power is still expensive and still very limited.

1) There is Zero Solar Power at night.
2) Daylight solar power varies from Zero to Maximum, and back to Zero.
3) You might get a lot of solar power at noon, (if there are no clouds), but you have to use it on the spot or lose it unless you also install very expensive and inefficient batteries.
4) Users of Solar power still end up paying for Coal/Natural gas/ Nuclear, because Solar Power is a hyped up Government propped up one legged duck that can't fly.

I credit the TVA for realizing how Less-Worthy the "Investment" is.

My impression from reading this is that Rikki is a Solar Zealot who cannot or will not see other's (TVA) point of view, and who wants the Taxpayer to fund his/her dream projects, whether it is reasonable or not.

Your ravings against Republicans and Capitalism just pegs you for and ideology driven zealot, not as an honest broker.

TVA should pay less to new solar suppliers, and they should honor the contracts they signed with existing suppliers. These deals were negotiated around specific payback periods, and TVA is arbitrarily and unilaterally changing those deals. If the terms are not working out for TVA, TVA should offer less to new suppliers, not change deals it has already negotiated. At the very least they should ask suppliers to renegotiate, not force new terms down their throats.

Real markets do not operate like that, but TVA is not negotiating in good faith. They are not merely setting the price they charge customers. They are setting the price they PAY to suppliers. That is not how markets work; it's how dictators and monopolies operate.

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