The Atlanta Business Chronicle reported Monday that Georgia State Senator, Buddy Carter, withdrew his proposal for a bill that would have bolstered the use of solar energy in this state because he believed it did not have enough votes to pass.  This is sad news to the solar industry in Georgia and to really anyone that is not Georgia Power or an existing utility company in this state.

Senate Bill 401 was introduced in February to encourage private investment in renewable solar energy by allowing individuals and companies to finance solar installations on their property through private power purchase agreements (PPAs).  PPAs work like this:  a solar company owns and installs the solar panels that are placed on the customer’s property (usually rooftop installations).  The customer either leases the solar equipment from the solar company for a monthly fee, or enters into a PPA to make regular payments to the installer based upon the amount of energy that will be generated.

PPAs are the most common form of financing for these projects because they typically involve significant up-front capital costs.  Many other states, particularly those with Renewable Energy Portfolios, allow the use of PPAs for solar and other renewable energy projects.

The reason they are not currently allowed in Georgia is because a Georgia law, known as the “Georgia Territorial Electric Service Act,” limits the sale of power to regulated utilities like Georgia Power and local EMCs.   Under the current state of the law, anyone can purchase and install their own solar panels to produce electricity for themselves.  But, they can’t rent the panels from a third party, buy the power generated from the panels from a third party, or sell the excess energy created from their panels to a third party.

It’s hard to believe that anyone would oppose to a bill that would encourage investment in renewable energy and foster a burgeoning industry that is bringing good jobs to this state.   It just makes sense to use one of the state’s most abundant resources—sunshine—to reduce demand from coal and gas-based energy plants and create jobs at the same time.  But, as predicted, Georgia Power has put up a vigorous fight and is lobbying hard to defeat this bill at all costs.  Georgia Power and existing utilities are heavily invested in coal and gas-based energy plants, and they do not want to see a reduction in demand and revenue due to these PPAs.

The fact that Senator Carter has pulled the bill for lack of votes means that Georgia Power is currently a louder voice in the legislative ears than the solar industry and advocates for green energy.  In order for this bill to have any real chance of becoming law in 2012, it must pass the senate by Wednesday in order to be sent to the House for consideration.

If you support renewable energy and solar-friendly legislation, then you should contact your representatives right away to urge them to vote for the passage of SB 401.  Otherwise, the expansion of solar energy in Georgia will be delayed for at least another year.  That’s a lot of sun that we will have missed out on!

Last week, I attended the Southern Solar Summit presented by the Georgia Solar Energy Association (GSEA).  Public Service Commission Chairman Lauren “Bubba” McDonald, Jr. gave the key note address and remarked about how far solar energy initiatives have come in Georgia in the past year, which isn’t saying much given where it started.

But, what he did say that was of interest to everyone in attendance was that the PSC is expected to approve Georgia Power’s proposal to effectively double its purchases of solar energy from private producers—up to 5 megawatts.  This is up from 2.5 megawatts that is currently purchased by Georgia Power, and up from 500 kilowatts that it purchased just two years ago.  Additionally, Georgia Power plans to build 1 MW of solar capacity from its own panels.

Many have argued that Georgia is not solar-friendly because of laws (specifically, the Territorial Act) that prevent anyone other than public utilities from selling power to customers.  This means that parties with excess solar energy may not sell it to any other party—the only option is to sell it back to the grid and that amount is capped by regulation.  Moreover, Georgia Power will only pay for solar power from proceeds it receives from customers paying extra for Green Power.  Solar power purchases are not included in the regular rates.

Other states that are known for their solar-friendly policies allow solar energy to be bought and sold through power purchase agreements (PPAs).  Under a PPA, a commercial building owner may contract with a provider to install solar panels on its rooftop (or other location) and the building owner simply purchases the power generated from the solar panels from the provider—usually at a rate less than the power purchased from public utilities.  The Territorial Act prevents parties in Georgia from entering into PPAs, effectively making Georgia Power the only customer of solar power in the state.  Instead, the building owner would have to make the capital expenditure to purchase and install the solar panels and would then own the power produced by the panels—but would not be able to sell to any other party the excess energy that is produced by its solar installation.

It remains to be seen whether this increase in the cap on solar power purchased by Georgia Power will actually correlate to an increase in solar projects around the state.  One thing is certain…if it does not, there is still plenty more Georgia can do to promote solar energy production here.

BONUS: Check out Beth Bond’s Tweet Diary from the Southern Solar Summit with a list of takeaways and important information.