As utility bills rise and concerns grow about climate change, many Georgians want the option of getting more of their electricity from cleaner and cheaper solar power.
Environmental groups, investors and other advocates say one way to meet that demand would be to open up Georgia’s largest electric monopoly to limited competition from outside solar companies.
In at least 20 states, residents and private investors are teaming up to build “community solar” arrays — small solar power plants that can supply electricity to surrounding communities and bring down energy bills.
Generally, investors put up the money to build the plant and are paid back over a period of years by customers who pay a monthly subscription for the energy produced. These power plants need less space than the huge solar farms cropping up in rural Georgia, and can be located closer to the population centers where energy demand is highest.
In Georgia, the law grants territorial monopolies to utilities, none of which are eager to welcome other providers, which they say would drive up costs for everyone else.
The issue is especially fraught for Georgia Power’s 2.7 million customers, who have been hit with a series of consecutive rate hikes recently. Georgia Power has its own program it has dubbed “community solar” that is open to residential or commercial customers. But six years after its launch, the program is less than a quarter full. Critics say there are faults in the design of Georgia Power’s program that have stymied its success.
Now, private companies are lining up to lobby state lawmakers to allow them to build community solar projects in Georgia Power’s territory. They say doing so would bring down bills, green the grid and direct billions of dollars of private and public investment to the state.
After a failed push to pass a community solar bill in the last legislative session, both sides are gearing up for another bout when lawmakers convene early next year.
State Rep. Beth Camp, R-Concord, was a sponsor of the bill that died last year and is chairing a House committee that is weighing similar proposals. Camp said she’s been hearing nonstop from constituents who say they cannot afford their Georgia Power bill while the utility’s profits rise.
“They do have the right to make money,” Camp said. “The only thing is, they’re a monopoly.”
Georgia Power’s ‘community solar’ struggles
In 2018, Georgia Power launched its community solar program to sell subscriptions to customers who wanted renewable energy but couldn’t install their own panels. Unlike community solar models in other states, which guarantee savings, Georgia Power’s program was sold as a premium product with a flat monthly fee.
By 2022, the program was severely undersubscribed and coming under scrutiny from regulators and industry critics who called it “fatally flawed.” Rather than scrap the program, regulators ordered Georgia Power to lower the subscription price and set aside most of the unsubscribed capacity for lower-income customers.
Today, just 1,155 participants are enrolled, and none of them were income-qualified, as of an Aug. 15 filing. More than three-quarters of the energy produced by the company’s “community solar” arrays is sold by Georgia Power to other customers.
John Kraft, a Georgia Power spokesman, emphasized that the company’s community solar subscription is voluntary and not designed to save customers money; rather, it’s to give them an option to “support” solar development in Georgia.
The company “cannot force customers to enroll,” he said in an email.
As for the lack of income-qualified participants, that plan depended on Georgia Power finding other companies to subsidize the program, but “no corporate sponsors have been identified to date,” he said.
Community solar taking off nationally
While Georgia Power’s community solar program has foundered, several community solar developers in other states said they have the opposite problem: They have waitlists.
New market opportunities coupled with federal tax breaks and grants have led to a boom in community solar. Community solar is seeing 8% average annual growth and a cumulative capacity projected to reach 14 gigawatts nationwide by 2028, said a report by Wood Mackenzie. That’s about the same capacity as Georgia Power’s entire portfolio right now.
Some of that community solar growth elsewhere is fueling Georgia’s own renewable energy manufacturing sector.
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Virginia-based Summit Ridge Energy recently placed a huge order for 2 gigawatts of solar equipment from Qcells, a Georgia manufacturer, to be used in community solar projects in more than 20 states. The company declined to share the dollar value of the deal, but said it represented a significant investment.
“The main reason why the solar panels that we have purchased ... are not staying in Georgia is that Georgia does not have a third-party community solar program,” said Leslie Elder, Summit Ridge’s vice president of policy and regulatory affairs.
Dimension Renewable Energy, which has headquarters in Atlanta, plans to spend $3 billion on community solar over the next five years — none of it in Georgia, despite the clean energy manufacturing boom in the state.
“It seems like a missed opportunity,” said Brandon Smithwood, Dimension’s vice president of policy.
Cost shifting?
Georgia Power and the organization representing the state’s rural electric cooperatives oppose the proposals laid out so far. They have said such programs unfairly shift costs to other customers who are not subscribers.
Community solar power plants plug into the local distribution network and send power onto the grid during peak hours when the sun is shining. Subscribers, in turn, are credited for the power produced by their investment on their energy bills. In a sense, subscribers are selling energy to Georgia Power, rather than the other way around.
By guaranteeing subscriber bill savings — 10% to 15% in most other states, sometimes more for income-qualified households — these programs indirectly force utilities to pay a certain price for the power produced by community solar power plants. That price typically is more than the wholesale price but less than what utilities charge their own customers.
The gap is what allows community solar providers to recoup their investment and guarantee savings.
Georgia Power says this model does not take into account the cost of transmission and grid maintenance, which would have to be shouldered by other customers.
“Offering guaranteed bill savings to participating (community solar) customers who take electric service on the company’s standard residential rate would increase costs for other customers, as the participating customer would no longer pay their fair share of the costs of the electric grid,” said Georgia Power’s Kraft.
Experts who spoke to The Atlanta Journal-Constitution mostly disagreed with that assessment.
“The reality of whether or not that is occurring is sort of hard to determine and very dependent on the state program,” said Caitlin Connelly, an energy analyst with Wood Mackenzie. “In existing programs that have been successful, there has not been any worry or pushback on any lack of benefit to non-subscribers of community solar.”
Keith Martin is a corporate tax attorney and executive at international law firm Norton Rose Fulbright who works on solar financing. He said there may be some truth in Georgia Power’s claims about cost shifting. But its aggressive stance against other providers appears to be more about a monopoly protecting itself, he said.
“The Southeastern utilities have largely managed to stave off independent power companies, solar and the whole bit, despite having the best sunshine in the country,” Martin said.
Others were less equivocal. Several pointed out that independent developers still have to pay to connect to the grid. By plugging into the local distribution network, community solar power plants mostly bypass the large, costly transmission lines Georgia Power claims it needs to recoup, they said.
“From a practical point of view, the electricity will go first to nearby homes,” said Mark Jacobson, an engineering professor at Stanford University and director of its Atmosphere and Energy program. He said Georgia Power appeared to want to charge people for transmission they’re not using.
Community solar power plants are “providing a service to the grid, and a good service, in terms of providing electricity during the day when people use most electricity,” Jacobson said.
Long term, the cost of building and operating new solar arrays is between one-half and one-sixth that of new natural gas generators, like the three that recently were approved by regulators for Georgia Power to meet the company’s projected energy shortfall, and five to eight times less than the two new nuclear reactors at Plant Vogtle, he said.
Utilities counter that nuclear and gas inherently provide baseload power that’s always on. Solar needs battery storage to provide power to the grid when the sun isn’t shining.
In addition to the economic and practical arguments for building smaller, more distributed solar power generators, Jacobson also pointed to the health and environmental benefits of moving away from fossil fuels.
“You’re reducing greenhouse gas emissions from fossil fuels, and that helps everybody on the grid,” he said. “You’re reducing energy and security problems associated with fossil fuels, and that helps everybody on the grid.”
A note of disclosure
This coverage is supported by a partnership with Green South Foundation and Journalism Funding Partners. You can learn more and support our climate reporting by donating at ajc.com/donate/climate.
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