Tuesday, December 1, 2009

Local Solar Power

You may have noticed the story in the CA's Sunday's digital green edition on solar panels. Last week, installation of a 4 kW solar array was completed at the Memphis residence of Gib and Nancy Wilson. This is the second home in Shelby County participating in Generation Partners, along with 4 businesses and organizations. Generation Partners is a TVA program available to MLGW customers who wish to install on-site renewable generation and sell green power back to TVA, with credits applied to their monthly MLGW bill.

Here are a few facts, in case your curiosity was piqued:

1. At 4 kW, this is the largest residential, grid-tied installation in Shelby County. (The U of M's sustainable design home, TERRA, has 2.1 kW of generation. It was completed in February 2009.) Grid-tied is an essential distinction, as there may be other customers generating power for use on their property but not participating in Generation Partners so MLGW is uninvolved.

2. 100% of the solar power the home will generate will be placed in MLGW's electric grid and purchased by TVA at a premium of $0.12 per kWh above the monthly residential electric rate including FCA. (For November revenue month, the combined incentive rate is $0.1975 per kWh--about 250% of the current residential electric rate.)

3. This is the first installation under the new version of TVA's program, which allows solar power to bypass the facility entirely and go directly to grid. All 5 previous installations first consume the solar power on-site then send any excess to the grid, which was the only method allowed under the previous version of Generation Partners.

4. Mr Wilson indicated the system cost $28,129, on par with national averages of $7.00 to $10.00 per watt installed. He will receive a 30% Federal tax credit when he files income taxes, a one-time $1,000 TVA completion incentive and the monthly generation credits to help offset his investment. Assuming an average incentive rate of $0.21 per kWh over the 10-year term of the Generation Partners agreement and assuming 5,800 kWh annual generation (based on NREL estimates), his simple payback is 15.35 years. The payback would be shortened by rate or FCA increases that subsequently increase his generation incentive.

5. The six Generation Partners participants in Shelby County--Sharp Manufacturing Company, Memphis Botanic Gardens, Memphis City Schools/Carnes Elementary, Sparco Computers/Sparco.com and the two residences--collectively account for 114 kW of grid-tied solar generating capacity. Their solar output is roughly equivalent to the annual electric use of 10 average Memphis households. In addition, several customers have already submitted plans for new solar installations in 2010. (BRIDGES hosts a 24 kW solar array that operates as part of TVA's Green Power Switch generation mix; however, TVA funded this installation so it is not part of Generation Partners and BRIDGES does not receive generation credits.)

6. The Department of Energy's National Renewable Energy Laboratory (NREL) estimates that, for each kW of system capacity installed, solar arrays in our region can expect to generate between 1,300 and 1,600 kWh of power per year (average 1,450 kWh). Hence, a 1 kW system would generate between 8% and 10% of the average local household's annual energy use at an initial cost of $7,000 to $10,000 per kW.

7. For details about Generation Partners, including processes and documents, visit the Green Power Switch section of MLGW's website.

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