Now on Hold, Georgia’s Progressive Program for Rooftop Solar Comes With a Catch

The math worked for adding solar panels to the roof of Temple Beth Tefilloh, a 135-year-old Jewish congregation that occupies a Moorish Revival-style building in historic Brunswick, Georgia.

With a loan from Georgia Interfaith Power & Light, a faith-based  environmental advocacy group, this congregation of 60 families on the coast at the gateway to the state’s four Golden Isles barrier islands was anticipating an annual savings of about $1,500 on its electricity bills from Georgia Power, the dominant electric utility in the state.

But in August, temple leaders found out they could not participate in a Georgia Power program that had promised a higher, retail-rate compensation for any extra electricity buildings with rooftop solar generated and fed to the grid, making their solar plans less financially attractive. 

While the Georgia Public Service Commission enacted the progressive “net-metering” program in 2019, Georgia Power, which never welcomed greater competition from customers with rooftop solar, used its influence to limit participation—and Temple Beth Tefilloh was over the cap.

So now, while Georgia has become a top 10 solar state, even without statewide mandates or energy mix standards for utilities because its policies have encouraged large, utility-scale solar farms, it’s ranked 40th in the country in 2020 for rooftop solar.

It’s a schizophrenic standing only made worse by the solar cap.

By the time Temple Beth Tefilloh applied, the program had hit that limit of 5,000 customers—out of Georgia Power’s total of about 2.6 million—who had either signed up for new net metering or had existing systems that were qualified to participate.

For any new rooftop solar installations by Georgia Power customers, the financial incentives now will be substantially reduced—back to what they would have been before the new program. That turns out to be a credit of about 2.7 cents per kilowatt hour for excess energy from rooftop solar installations sent to the grid, instead of a retail rate of about 12 cents per kilowatt hour that participants in the 2019 net metering program get.

“It was a surprise,” said Phil Graitcer, the temple’s operations and maintenance volunteer. “It was really disappointing. What I can’t figure out is why Georgia Power cares about this 5,000 number at all?”

To solar power advocates, the discrepancy reflects a failure of state environmental and economic policy, triggering what some are calling a “Scrap the Solar Cap” campaign. 

Pressure is mounting on the five-member public service commission to extend the pro-solar net-metering program. There is also a bill in the state legislature to raise the cap, which could get a hearing early next year.

The program “has helped home and business owners in Georgia finally get a fair value from the utility for the energy that their solar panels produce,” said Seth Gunning, sales director for Creative Solar USA, the company used by Temple Beth Tefilloh. “We have seen thousands of families go solar in a very short period of time.”

That’s created jobs and saved families money on annual power costs. With the cap, Gunning said, the solar installation market has frozen. “Families can’t make big economic decisions about their energy future with this much uncertainty,” Gunning said.

Environmental advocates have welcomed the state’s gains with utility-scale solar. But the state also needs to boost rooftop solar, said Jill Kysor, an Atlanta-based senior attorney with the Southern Environmental Law Center.

“Both types of solar power are essential,” Kysor said. “Both are critical to addressing climate change. It’s also about customer choice and customer rights.”

The Net Metering Threat 

Georgia Power customers are not alone. 

Utilities across the country have been fighting net metering policies that require utilities to pay or credit solar owners at the full retail rate for excess electricity sent to the grid. 

With utilities arguing that such policies are unfair to customers who don’t have solar panels, in part because it reduces what customers with solar panels pay to support operational and grid expenses, the trend has been for states to adopt policies more hostile to solar systems at homes and businesses.

Some participants of the special Georgia program had previously installed solar panels on their homes, and qualified because of a pricing plan they had chosen.

One of them, Jennette Gayer, state director of the solar power advocacy group Environment Georgia, said the program really made a difference on her bills.

After she had solar panels installed on her home before the new program went into effect, she said her home’s electricity bills were reduced 30 percent to 50 percent, because she was supplying so much of her own power with her solar panels. Once in the new program, her bills went down by another 50 percent when she started being credited at the retail rate for the excess power she was sending to the grid. 

“Rooftop solar really puts the power into individual homeowners and businesses,” said Gayer, who is also co-chair of the Georgia Solar Energy Association. 

But rooftop solar also challenges the traditional business model for electric utilities like Georgia Power, which is a regulated monopoly. “If you are a utility that makes money off generating electricity and selling it, that is obviously a concern,” she said.

For the company’s part, a spokesman, Craig Bell, said the 2019 incentivized rooftop solar program “is still very new, and the impacts of the program have not yet been fully evaluated.”

The impacts could include what he described as increases in costs to the company’s electrical system, the shifting of costs to other customers, and reliability. 

Solar advocates, however, make a case that having utility customers generating their own energy from solar panels benefits the customer, the utility and society. It reduces carbon emissions that cause global warming, cuts air pollution and boosts a fast-growing renewable energy industry.

“It’s so much smarter to produce energy where you use it, rather than transmitting it over power lines for miles and miles and miles,” Gayer said.

Bell said he expects the public service commission to take another look at the program during a review next year of the company’s next three-year integrated resource plan.

In the meantime, Bell said, customers “still have the option to install rooftop solar systems, and be compensated through existing buyback programs, or may participate in the company’s various offerings.”

Compensating rooftop solar owners for their excess power is a more complex issue than most appreciate because retail rates are set to cover all of the costs of providing around-the-clock electricity service, including running and maintaining power plants and transmission lines, Bell said. 

Rooftop solar owners, he said, aren’t responsible for doing any of those things. 

Solar Customers Are Lagging in Georgia

Members of the state Public Service Commission are elected and responsible for regulating Georgia Power, which serves 155 of 159 Georgia counties and is the largest subsidiary of the Southern Company. In recent years Georgia Power has been tangled in controversy over the expansion of nuclear power at its jointly owned Plant Vogtle, which has had billions of dollars in cost overruns and construction delays.

Overall, Georgia this year ranks ninth in the country for total solar capacity, producing enough electricity from the sun to power nearly 360,000 homes, according to the Solar Energy Industries Association.

But tracking by the energy research and consulting firm Wood Mackenzie ranked Georgia 40th in the country for residential rooftop solar capacity last year, and projected it would be 41st in 2021.

The Southern Environmental Law Center’s analysis of U.S. Energy Information data shows Georgia also lagging behind some of its neighbors for the number of residential and commercial customers with their own solar systems. Florida, for example, has nearly 90,000 such customers, North Carolina has about 23,000 and South Carolina, about 24,000. That compares to Georgia, with about 3,500, according to the law center. The law center analysis includes other Georgia utilities but not Georgia Power customers whose systems have been approved but not yet installed.

“There is plenty of room to grow the market,” Kysor said.

Georgia Power says that when it gets all the customers who have applied under the 2019 program hooked up, it expects about 6,300 customers with their own solar systems.

The company expects to continue to grow its renewable generation resources for both utility scale and smaller-scale distributed generation, including rooftop solar and other residential options, Bell said.

Tim Echols, the vice chairman of the public service commission, said the dearth of solar systems at homes and businesses in Georgia compared to the company’s total number of customers “shows we haven’t been doing a good job.”

He said Georgia Power has been resistant to net metering since he has been on the commission, starting in 2011, and was resistant to the 2019 program during the review process that year for its three-year integrated resource plan.

“They would not do this voluntarily,” Echols said of rooftop solar-friendly net metering. “The only way we could get it through was to put the 5,000 (customer) cap on it,” he said.

“Were it not essentially a pill inside a scoop of ice cream, they never would have conceded,” he added.

The ice cream, he said, was commission approval of a return on equity, a measure of financial performance, for the company of nearly 11 percent.

Echols said he expects the commission to consider raising the cap when the company puts forward its next three-year integrated resource plan in January, and to make a decision by June.

“My plan is to offer 25,000 additional customers over the next three years,” he said. “I don’t know that I have the votes for that.”

‘The Right Thing to Do’

In the meantime, companies and advocates are writing letters to commissioners, asking for faster action.

The Solar Energy Industries Association counts 4,466 solar jobs in Georgia now, but many of them are temporary during construction of utility-scale solar farms, said Montana Busch, president of Alternative Energy Southeast, a company that specializes in the design and installation of alternative energy systems. He’s also co-chair of the Georgia Solar Energy Association.

“The rooftop solar industry in Georgia creates long-lasting, good-paying jobs,” he said. But without greater access to the 2019 net-metering program, the rooftop solar industry “is struggling to stay alive.”

In Brunswick, at Temple Beth Tefilloh, Graitcer and Rabbi Rachael Bregman wrote to Echols on Aug. 19, telling him that losing the anticipated savings could make it more difficult to improve spiritual outreach, purchase equipment for streaming services, hire a cantor and restore the temple’s Torahs.

But even without the higher retail rates for its excess power, the temple has decided it will go ahead with the solar installation. “The bottom line,” Graitcer said, “solar is the right thing to do.”