TODAY’S STUDY: The South Lets The Sun In

Solar In The Southeast 2017 Annual Report

Bryan Jacob, March 2018 (Southern Alliance for Clean Energy)

Executive Summary

Utilities

Large utilities exhibiting solar leadership in 2017 include: Duke Energy Progress, Duke Energy Carolinas, and Georgia Power – each with more than 300 watts of solar per customer (W/C). Some smaller utilities demonstrate exemplary solar watts per customer ratios; examples: Cobb EMC (635 W/C) and Mississippi Power (455 W/C). Several large utilities still operate less than 100 watts of solar per customer. Alabama Power customers, on average, were served by just 7 watts per customer in 2017.

States

Leading states like North Carolina, South Carolina, and Georgia have exhibited strong public policy direction. Certain states, like Tennessee and Alabama, lack supportive public policies, leaving those states with projections at less than half of the region average through 2021.

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Rpaid Growth

The Southeast has tremendous solar potential (second only to the desert southwest) and has been experiencing near exponential solar growth for the last five years. The region will have over 10,000 MW by 2019 -- and approximately 15,000 MW by 2021.

Identifying Leaders

Duke Energy Progress, Duke Energy Carolinas and Georgia Power are the current utility leaders on solar power. Ranking utilities by watts per customer (W/C) offers an unbiased identification of leaders in the southeast solar market. South Carolina Electric & Gas and Tampa Electric are the most notable "SunRisers" demonstrating leading levels of planned solar growth.

Utility-Scale Dominance

Solar growth has been dominated by utility-scale projects. Unlike market regions that offer customers choice in power supplies, monopoly utilities in the Southeast control nearly all solar development. In several states, utilities can and do impose inefficient or unnecessary constraints on distributed generation.

“Sunblockers”

Three major utility systems - Tennessee Valley Authority, Santee Cooper, and Seminole Electric Cooperative - are sticking with outdated plans with low levels of solar. For example, the monopolistic behavior of TVA is restricting solar choice across the Tennessee Valley.

Southeast Solar Capacity Forecast Exponential Growth Since 2012

Solar photovoltaic (PV) capacity nearly doubled each year from less than 200 MW in 2012 to almost 3,000 MW in 2016.

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Growth Continues

From 6,000 MW in 2017, new projects will take solar to 10,000 MW in 2019. Based on utility and other industry forecasts, SACE anticipates 15,000 MW by 2021. Much of this growth represents existing contracts and commitments that remain highly certain.

Utility-Scale Solar Dominates

Utility-scale solar is favored by an economic advantage, policies, and discretionary utility practices that discourage customer-sited solar (“behind the meter”). Most utility-scale systems are in excess of 5 MW, many exceed 50 MW.

Distributed Solar Projects Lags

Despite high customer interest, less growth is predicted for smaller residential rooftop and commercial customer-sited solar accounted via net metering or related billing practices.

Limited Grid Impacts

Even with 15,000 MW in 2021, the corresponding solar generation is less than 3% of retail sales, considerably below levels that could trigger changes in grid operation practices.

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Large Utility System Rankings

The two leading utilities, Duke Energy Progress (DEP) and Duke Energy Carolinas (DEC), have been propelled by North Carolina laws along with favorable regulatory terms required by the North Carolina Utilities Commission for independent power providers. Those utilities, along with South Carolina Electric & Gas (SCE&G), have also supported solar in response to a South Carolina law which enabled new solar programs in the Palmetto state. Georgia Power’s solar programs were induced by orders of the Georgia Public Service Commission (PSC). Georgia Power has responded with effective market procurement and contracting practices (including siting at military bases). The future of solar is bright across most of the Southeast. Solar will more than double on average, driven by utilities like Duke Energy Florida and Tampa Electric. Each of these Florida utilities announced solar expansion plans in 2017 that will propel them toward the top of the list in the coming years. However, the Tennessee Valley Authority (TVA), Santee Cooper, and Seminole Electric Cooperative are not forecast to add solar at a significant pace. Florida Power & Light (owned by NextEra) plans additional solar, but at a slower pace than rival Florida utilities. These utilities operate in a public policy vacuum and the slow pace of solar reflects outdated thinking within the utilities’ management. The 13 largest utility systems in the Southeast each serve more than 500k customers. This includes individual investor owned utilities like Georgia Power, as well as the combination of utilities organized into cooperatives like Oglethorpe and the federally-owned Tennessee Valley Authority. Also studied, but not exceeding the 500k customer benchmark are several regional municipal power agencies.

Forecast For Select Utility Systems…Duke Energy Leads The Southeast…Southern Company…Florida Power & Light…Oglethorpe Power…Tennessee Valley Authority…

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Southeast Solar Momentum: Sunrisers Sunrisers

The top 7 utilities with the highest forecast solar watts per customer growth operate in four different states, demonstrating solar power appeal throughout the region. Duke Energy Progress (DEP) already exhibits the highest watts per customer ratio in the Southeast, and it will more than double that by 2021. North Carolina’s new law (HB 589) is contributing to that continued growth. South Carolina’s Act 236 is also a factor for DEP as well as South Carolina Electric and Gas (SCE&G). Price decreases for solar modules and other components have created a new economic reality for solar, driving growth across the Southeast.

Forecast For Southeast States

North Carolina is projected to remain the southeast leader in solar capacity and among the highest in the country (currently #2).1 Florida utilities have announced significant plans for growth in solar over the next 6 years. Georgia continues steady progress with utility-scale solar development. Alabama and Mississippi have been identified recently among the fastest growing solar states in the country2 albeit with a rather small base. Florida, North Carolina and South Carolina are the only states projecting an appreciable amount of small-scale distributed solar…Tennessee, once an early leader in small-scale, distributed solar, has relinquished that leadership posture and demonstrates limited interest to advance solar at any scale…

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