Total installed photovoltaic (PV) capacity in Tennessee increased 44 percent from 2.34 megawatts in the second quarter to 3.37 megawatts in the third quarter of 2011. According to GTM Research and the Solar Energy Industries Association’s most recent data, nearly 96 percent of installed capacity in the third quarter came from the commercial segment.
The Tennessee Valley Authority (TVA) offers multiple incentives to drive PV installations in the state. Launched as a pilot program in 2003, the Generation Partners Program offers production based incentives to homeowners and businesses that install renewable generation systems including PV, wind, low-impact hydropower, and biomass. TVA and participating power distributors purchase 100 percent of output from qualifying PV systems at a premium of $0.12 per kilowatt-hour on top of the retail electricity rate in exchange for solar renewable energy credits (SRECs). Additionally, new participants receive a $1,000 incentive to offset upfront cost.
Source: GTM Research
After fueling an unprecedented solar industry boom in the region in 2010, the Generation Partners Program shifted its maximum project size from 200 kilowatts to 50 kilowatts last month. The action was designed to focus program resources primarily on small-scale, renewable projects, which the TVA believes is key to achieving its long-term plan of providing locally produced renewable generation at the lowest cost possible.
By guaranteeing incentives to small-scale projects into the future, TVA hopes to drive continued residential and commercial installations in the state.