It’s but a drop in a bucket of unlimited potential, but the area’s most recent solar power installation — as small as it may be — is nonetheless significant.
Last week, the Alabama Municipal Electric Authority (AMEA) joined officials in the city of Fairhope to cut the ribbon on a 24-kilowatt solar research project outside City Hall. The installation is essentially an awning, covering just six parking spaces, but it is designed to power electric vehicle charging stations and send excess energy into the local grid.
Such an installation is also capable of powering a small house, but rooftop solar panels in the state of Alabama are exceedingly rare, though they are becoming increasingly common in other Southeastern states, including Florida, Georgia and North Carolina.
According to the Solar Energies Industries Association (SEIA), with more than 577 megawatts of generating capacity, Alabama actually sits in the middle of the pack — ranked 28th among all states — for solar installations. It accounts for just .35 percent of all electricity in the state, but provides some 481 jobs and has the potential to power some 69,000 homes.
Comparatively, SEIA reports Georgia is ranked seventh nationally for the capacity of solar installed, with 4,268 megawatts, or enough to power 543,276 homes. The industry in Georgia provides 4,466 jobs, according to the report.
Moving up the ladder, Florida is ranked third, with 8,205 megawatts of capacity, which can power more than 1 million homes. An estimated 11,219 Floridians worked in the solar industry last year, according to the report, where the total investment in solar power has exceeded $11.2 billion. Solar power now accounts for 4.35 percent of electricity produced in the Sunshine State.
North Carolina is just a few hundred megawatts behind Florida and ranks fourth nationwide for solar capacity, but the state actually produces more than 8 percent of its electricity from the sun. One megawatt equals 1,000 kilowatts.
“North Carolina’s solar industry grew quickly thanks in part to the state’s Renewable Energy and Energy Efficiency Portfolio Standard (EEPS) and strong state policy and regulatory support,” SEIA reported. “A 2017 law authorized solar leasing, giving a much-needed boost to residential solar companies and offering consumers more options to control their energy use.”
The top two solar-producing states are California (34,950 megawatts, supplying 25.64 percent of the state’s electricity) and Texas (13,844 megawatts, supplying 3.37 percent of the state’s electricity). Both have been proactive in promoting solar with financial incentives granted by state lawmakers, with California actually requiring all houses built after 2020 to install rooftop solar panels.
Alabama’s legislature provides no such incentives or mandates. In fact, the Alabama Public Service Commission (PSC), the state agency tasked with enforcing regulations on investor-owned electric utilities in Alabama, has actually permitted the state’s largest power producer, Alabama Power, to impose a regressive fee on solar customers since 2013. Initially $5 per kilowatt, last year, after the rate was contested by customers and environmental advocacy groups, the PSC agreed to allow Alabama Power to increase the rate to $5.41. For a five-kilowatt home system, which is slightly smaller than average, the fee adds $300 per year onto the cost of ownership, or $9,000 over the ideal 30-year life of the system. Advocates claim the fee effectively eliminates any financial savings solar customers may realize.
The customers filed a complaint with the Federal Energy Regulatory Commission (FERC), but it declined to grant a petition seeking to initiate enforcement actions against the PSC for allowing Alabama Power to impose the solar fee. Still, two members of the commission — Chairman Richard Glick and Commissioner Allison Clements — wrote an opinion expressing concerns about Alabama Power’s fee. According to the FERC commissioners, the fee “may be discriminatory” because the utility failed to demonstrate its solar customers in fact draw different power loads than customers without on-site generation, who are not required to pay the fee.
“Petitioners have presented a strong case that the Alabama Commission failed to adhere to regulations set forth … violating the requirements of [federal law],” they wrote.
Now, those same complainants have filed a federal lawsuit against the PSC, seeking to have the rate declared discriminatory by a court of law.
The lawsuit, filed on behalf of four plaintiffs and the Greater-Birmingham Alliance to Stop Pollution (GASP), claims the PSC has failed to implement requirements of the Public Utility Regulatory Policies Act of 1978 (PURPA), specifically, requirements that preclude regulated utilities from charging “unjust and discriminatory rates for the sale of electricity to ‘qualifying facilities,’ a category that includes customers who own solar generation.”
The complaint alleges the fee imposed by Alabama Power to provide “backup power” to solar customers “are stifling the growth of customer-sited solar across the lower two-thirds of Alabama” and as a result, “Alabama, despite an abundance of sunshine, lags almost every other state in the U.S. in customer-sited solar deployment.”
“The charges for backup power service destroy the economics of private solar installations, robbing plaintiffs and others like them of their expected savings and prolonging the payback period on their investments,” the complaint states. Intervening in the complaint, Alabama Power argues it has maintained such “electric service tariffs” since 1981.
In a statement accompanying the complaint last year, Keith Johnston, director of the Southern Environmental Law Center’s (SELC) Alabama office, said, “We’re asking the court to require the [PSC] to follow the law so that Alabama Power will stop unfairly taxing private solar investments. Alabama is being left behind by other Southern states when it comes to solar generation, and the jobs, bill savings and other benefits that come with it. These charges are a significant roadblock to our state’s success.”
“Since 2013, Alabama Power’s unjust monthly fee has limited the rights of Alabama homeowners and businesses to use solar power on their properties to reduce their electric bills,” the SELC reported in a statement. “One of the highest fees on solar customers of any regulated utility nationwide, the monthly fee is imposed on top of other fixed and variable charges and significantly reduces customers’ expected savings, making it impractical to invest in solar power.”
In response to questions this week, Beth Thomas, a spokesperson for Alabama Power, said the “backup service charge,” as it is known, “applies to customers on specified rates with any kind of on-site generation who want backup power from the grid.”
“There is a cost to having backup power ready the moment a customer with on-site generation needs it,” Thomas wrote. “Any customer who needs backup service from the grid should pay the cost of that service, otherwise other customers unfairly pay the costs for those individuals and businesses.”
Thomas noted the utility offers a new fee structure for residential customers with on-site generation called “Rate Family Dwelling – Demand,” which allegedly will “take the place of a separate backup service charge.”
Alan Williford is the executive vice president and chief operating officer at the Alabama Municipal Electric Authority. He said his organization — more of a power broker than a power producer — has nonetheless tried to be at the forefront of renewable energy. AMEA purchases bulk power from other utilities — including Alabama Power — on behalf of its member municipalities.
“We’ve been waiting for [solar] to become economical,” he said. “We were looking at solar as a hedge against natural gas prices in the future. We knew we were going to have heavier gas in our portfolio … and we knew we wanted to have some kind of offset against any volatility.”
In 2020, AMEA announced the development of a 130-megawatt solar facility on 800 acres near Montgomery, a $125 million investment secured with the partnership of Lightsource BP. When complete, the array will be one of the largest in the state and capable of powering 20,000 homes.
AMEA also purchases power from Southern Power, Santee Cooper, Morgan Stanley Capital Group and the U.S. Army Corps of Engineers. By 2026, AMEA is projecting more than 14 percent of its capacity will be generated from renewable resources, Williford said.
Aside from its new solar research project in Fairhope, Williford said a similar facility on State Route 59 in Foley is used to study solar potential. Engineers monitoring the Foley facility, for example, have studied the effects of dust, pollen and weather on the output of its solar panels, while they’ve also experimented with the directions the panels face.
Interestingly, he said, during the solar eclipse of 2017, in which the area was under a 95 percent eclipse, the output of AMEA’s solar panels fell exactly 95 percent.
Williford said while AMEA does offer a program to encourage rooftop solar investment, only nine to 15 customers in Baldwin County have ever participated. Meanwhile, he recognizes several barriers to widespread use.
“The economics are just not there,” he said. “If you’re going to be in a house for 30 years, you may break even after you pay the utility, but you won’t save any money.” Williford added many roofs in Alabama are not built to support solar panels and would have to be reinforced before installation.
Energy Alabama is an independent nonprofit organization focused on supporting education and advocacy on energy efficiency, clean energy and electric transportation in Alabama. According to a group of 600 registered voters surveyed by the organization last year, 81 percent support the development of clean energy like solar and wind in Alabama, 92 percent support passing state legislation that gives consumers more freedom to choose where their energy comes from and for them to reduce the cost of their energy bill, and 75 percent oppose the policy of charging solar customers a fee if they install solar and connect it to the grid.
“This fee or tax has been around since 2013 or so and it’s been a big barrier to the growth of renewable energy in the state,” Energy Alabama Executive Director Daniel Tait told Lagniappe. “Georgia Power — which has the same parent company as Alabama Power — tried to do something similar and they were essentially laughed out of the public service commission over there.”
Tait said states with progressive energy policies typically have more independent public service commissions than Alabama, which he characterizes as a commission politically “captured” by Alabama Power.
“This commission, to my knowledge, has never made any decision that has been contrary to exactly what Alabama Power wanted,” Tait said. “The easy answer is, Alabama Power gets what they want.”
In Georgia, on the other hand, Tait said, voters replaced so-called “captured” public service commission members after a “boondoggle” in which billions were wasted on a mothballed nuclear facility, while in North Carolina, the commission was replaced after a catastrophic coal ash spill.
“Sometimes it takes something that shakes the public consciousness to result in that kind of political change,” he said.
Tait added that among legislators he’s spoken to, lawmakers of both parties tend to agree there is room to expand the renewable energy industry, “but they are scared of Alabama Power because Alabama Power has an unlimited amount of money to spend on political races and propaganda.” Tait noted the treatment received by former Public Service Commissioner Terry Dunn after Dunn merely suggested the utility face its first formal rate hearings in more than a decade.
Dunn, a Republican like the other two commissioners, was castigated and outcast by others in his party after the suggestion in 2013, and he was defeated by a Republican challenger in the primary election the following year. Tait suggested the utility has an even heavier influence on its own customers.
“They make money when they invest in capital,” he said. “It has less to do with [their portfolio], but they like to control and own and monopolize things rather than give any individual an opportunity to make their own capital investment. They have to know when they are building a new gas plant today, it won’t operate for its entire lifetime. They are just trying to get as many bites from the capital apple as they can. But nothing is going to move the needle until an outside force — the federal government or investors themselves — tells the utility to change.”
Alabama Power declined to answer other questions about its solar fee and renewable energy programs, including the extent of its renewable portfolio, how many customers are assessed solar fees, strategies for growth or information about voluntary renewable investment.
Thomas did offer that the company has, to date, greenlighted five solar projects totaling 250 megawatts. Its most recent, an 80-MW solar project in Butler County in partnership with Wells Fargo, is expected to provide an estimated $6 million in tax revenue for the county and deliver a total of 250 construction jobs.
Tait said the industry, and Alabama Power in particular, can do far more. There is also opportunity for wind turbines in the north part of the state and potentially offshore, while heating and cooling with geothermal energy would remove thousands of tons of greenhouse gasses from the atmosphere annually.
“There’s no ceiling, there’s no cap, to the amount of investment there could be,” Tait said, adding that during a time of inflation, Alabama Power customers are left at risk of market volatility. “If they would absorb some of that risk and commit to investing in the future, we could move the needle 20 to 60 years forward in this state.”
This page is available to our subscribers. Join us right now to get the latest local news from local reporters for local readers.
The best deal is found by clicking here. Click here right now to find out more. Check it out.
Already a member of the Lagniappe family? Sign in by clicking here