BY Chad C. Payne

Marketing in the Southeast U.S.

My current job responsibilities include sales and marketing. I am usually the first person to establish contact with a potential customer and access their energy goals. It is common for a homeowner to become discouraged by the high installation costs of a PV system. Typical systems designed to offset 100% of a residential homes energy demands can range from US$30,000 on up just depending on the amount of energy demanded at that location. That can be quite a leap for homeowners living within the TVA footprint who happen to be enjoying some of the lowest utility rates in the U.S. The average cost per kilowatt hour for residential customers in this area is estimated at 8 cents per kilowatt hour. The best time to implement these systems and make it as painless as possible for the customer is to build the systems cost into the home mortgage.

TVA Generation Partners Program

To address this gap in the residential market, we have begun recommending the smallest system size allowed to interconnect and participate with the TVA Generation Partners Program. This allows the customer to install a totally modular system that can be added to as desired in the future without encountering a lot of the original cost impacts. Such as the interconnection, the circuits required from the PV array to the interconnection point and the permitting processes. Once the system is operational and if designed with the correct components, can be expanded with minimal effort.

Starting small

TVA has a few requirements regarding photovoltaic system sizes. The smallest PV system size allowable to interact with TVA’s program is 500 watts and the largest is just shy of 1 MW (1,000,000 watts). There is an inverter technology that exists today that now allows us the ability to match one solar PV module to one micro inverter. This increases production by allowing that micro inverter to track the individual solar modules power generation performance and maximize the potential. Whereas, with a traditional central inverter the whole array of solar modules are tracked as a collective group. If one module is negatively affected in the central inverter system by shadowing or other detrimental factors then the whole array’s performance is affected as well. Remember the central inverter does not have the ability to single out the performance of one module. Another key factor that makes this micro inverter a logical choice is the fact that with a central inverter system, if you want to add additional solar modules to the system, it requires a new larger replacement inverter altogether. And the additional panels must be the same brand, same power output, same orientation to the sun, same tilt to the sun and hopefully about the same age (considering degradation over time), not to mention needed modifications to the circuits due to new voltage and amperage requirements. The micro inverter system addresses these issues by being a plug and play device that does not care what the next micro inverter and solar module in series is up to.

Coverage Area

 Tennessee Valley Authority encompasses some seven states, which include; all of Tennessee and portions of Mississippi, Alabama, Georgia, North Carolina, Virginia and Kentucky in the U.S. Within this footprint, there are some sixteen separate TVA owned solar photovoltaic generation sites. These sites offer high visibility and good opportunities for public education. By stimulating public interest in and demand for solar power, TVA intends to encourage further technological development that could help bring the cost down over time. The solar power generated by these sites during 2009 was an estimated 212,690 kilowatt hours. In contrast, the solar power generated by ”utility interactive” privately owned photovoltaic systems for 2009 was estimated at 535,160 kilowatt hours. The combined generating capacity of TVA’s solar installations is over 300 kilowatts--an amount that demonstrates TVA’s leadership among Southeastern utilities in its commitment to solar energy. TVA was named one of the Top 10 North American utilities by Site Selection magazine in 2009. The ranking was based on economic development achievements for 2008. See www.siteselection.com, TVA has held that outstanding achievement for four consecutive years. The state of Tennessee also ranked 5th overall in the list of Top State Business Climates for 2009. In 2008, TVA and the distributors of TVA power, working with state and local partners in the seven-state Tennessee Valley region, helped attract or retain more than 42,000 jobs and leveraged some US$5.5 billion in capital investment. Eight regional industrial associations team up with TVA to provide services to the Tennessee Valley. They are as follows: West Tennessee Industrial Association, Middle Tennessee Industrial Development Association, Southeast Industrial Development Association, East Tennessee Economic Development Agency, Northeast Tennessee Valley Regional Industrial Development Association, Southern Kentucky and the North Mississippi Industrial Development Association. Over 120 TVA power distributors, Chamber of Commerce’s, Community Organizations along with the Economic Development Administration (EDA) have collectively served as the catalyst for the solar energy industry here in the southeast.

How the Program Works

TVA will purchase the solar energy generated by a qualifying photovoltaic system at a rate of 12 cents per kilowatt-hour as a premium payment above the retail rate and any fuel cost adjustments. For example, if you pay your local TVA power distributor 10 cents per kWh for the electricity you use each month, then TVA will pay you 22 cents (10 cents plus a 12 cent guaranteed premium) per kWh for 100% of the solar power generated from your solar photovoltaic system for a period of ten years. TVA also has a participation bonus of US$1,000.00 available for new system owners to help offset grid interconnection cost impacts. The interesting perspective is that if you were to generate your own energy and use it, you would only enjoy the savings of 10 cents per kilowatt hour. However, by participating in the 10 year contract the deal becomes even more practical because you now sell the solar power at a rate of 22 cents. This means you first sell the power at 22 cents per kilowatt hour during daylight solar collection hours and then turn around and by it right back for 10 cents at night. This along with other incentives has become a major reason customers are now considering solar PV in the Southeast U.S.

Actual Steps: Sizing Residential Photovoltaic Systems

Sizing the residential PV system--For the average customer, I would recommend a few simple steps to determine a rough system size. Of course, this is for rough numbers to help you determine the feasibility of this endeavor in relation to your own personal situation. To properly evaluate a proposed site would require the expertise of a solar energy professional with the proper experience and credentials. Although costs in the solar industry are dropping and incentives are increasing, these systems are still quite expensive. Depending on the components and system size, prices can range from US$6.00 per watt on upwards to US$12.00 plus per watt installed. Refer to NREL’s Consumers Guide http://www.nrel.gov/docs/fy04osti/%2035297.pdf. Please remember these systems are very dangerous at up to 600 volts DC and when properly designed could potentially be operational 30 to 40+ years. With the navigation of a few free programs on the internet you can determine approximate values. First, find your geographical coordinates in decimal form for your home in Google Earth and record.

Next, open the PV watts version 2 on National Renewable Energy Laboratories. http://mapserve2.nrel.gov/website/L48NEWPVWatts/viewer.htm

It may take you a few minutes to become familiar with this program but it’s well worth the effort. The first item to enter is your latitude and longitude from Google Earth. A new browser window will open, enter 1.0 for the DC system size. Skip the prompts for the derate factor and array type. We will assume this is a traditional PV system flush mounted to your roof. Next, enter 30 degrees of array tilt for the TVA footprint area and leave the program at 180。 due south. Now determine your billing rate per kilowatt hour, enter and click calculate. The output results sheet will open for you to save or print. There is one item you need on this sheet now. It is the cost of the solar power generated annually. This is the value of the credits earned annually. (See bottom far right in the table.) Note this amount and divide it into the total annual energy cost you experience for the year in your home. Since we used a 1.0 kilowatt increment for DC system size we now know roughly what size you require to offset the ‘cost’ of you annual energy in kilowatts. Convert this into watts by multiplying by 1000 (1000 watts per 1 kilowatt) Now, finally multiply total watts by the US$6 to US$12 per watt range installed to give you a budget range for your new system. Now you have an idea of the installed cost.

Other Incentives

The most comprehensive site for your incentives can be located at www. dsireusa.org. The first incentive available is the 30% Federal Personal Renewable Energy Tax Credit. A taxpayer may claim a tax credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer.

Residential solar incentives will vary from state to state accordingly, please check in periodically to the desire web site for updates. For cost recovery in the TVA valley area, we typically see about 15 to 18 years for residential installation. This is great since the solar modules are rated for 25 years typically industry wide. Additionally, the systems don’t just burn out at this time they degrade over the years. The potential lifetime of a quality PV system could exceed the 25 year mark by another decade easily. There are systems still in operation today that were installed in the 50’s and 60’s. That? 25 years beyond the 10 year production contract.

For interests in commercial cost recovery, please refer your accountant to the desire site for a full analysis and determination of feasibility. Each company has its own individual tax liability situation. I can tell you from performing numerous financial reports on commercial PV system installations that Tennessee has some of the strongest incentives in the nation. I will list several incentives briefly: (1) 40% Tennessee Clean Energy Technology Grant, (2) 25% USDA Rural Development Grant, (3) 5 year Modified Accelerated Cost Recovery System, (4) 30% Business Investment Tax Credit and (5) TVA’s Generation Partners Program.

The residential solar PV market in the Southeast is experiencing growth. About half of both our installations and public interest is split between commercial and residential customers.

Typical payback for residential PV is in excess of 15 years. Currently, the 30% Personal Tax Credit and the TVA Generation Partners Program are the motivational sources for installations in the residential sector. Small residential systems are best suited for micro inverter technologies.

Chad C. Payne is Senior Director of Sales & Marketing at Solar & Renewable Power Systems (http://www.solarrenewablepowersystems.com/).

For more information, please send your e-mails to pved@infothe.com.

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