Forsyth Park, Savannah
The peaches may be sweet in Georgia, but solar power policy and incentives are starting to turn a bit sour after a strong start in 2008. In fact, Georgia legislators don’t seem to have done anything at all to help encourage solar power since they passed a strong tax credit nearly four years ago.
Georgia lacks many sensible policies that are steadily becoming the norm across the nation, including a strong Renewables Portfolio Standard, tax exemptions for renewable energy sources like residential solar power systems, and strong net metering and interconnection laws that lay out sufficient standards to protect consumers like you.
That tax credit is keeping Georgia on the solar map for now, but without significant improvement in a variety of legislative areas The Peach State won’t be peachy for solar power much longer.
Georgia’s (Lack Of A) Renewables Portfolio Standard
A Renewables Portfolio Standard (“RPS”) is a law that requires a state’s electric utilities to generate a percentage of their electricity from renewable resources by a certain date. Whether it be 20% by 2020, 30% by 2030, or any other target, an RPS is a critical piece of successful renewable energy policy.
Unfortunately Georgia is one of a minority of states that has yet to pass any RPS. The legislature is missing a big opportunity to help safeguard your environment and save citizens money.
We see the same pattern all across the country. In states with renewable energy targets written into the law (and penalties for failing to meet those targets), the state and the utilities come together to offer strong incentives for residential solar power. In states that lack an RPS the landscape is far more murky. There might be the occasional tax credit or utility-specific performance incentive, but states that lack an RPS generally lack a cohesive policy to encourage renewable energy.
Bottom line – if we want a strong future for renewable energy here, we need a strong RPS, and ASAP.
Georgia’s Electricity Prices
Electricity runs about 10.1 cents per kilowatt hour (“kwh”) here. That’s pretty low. In fact electricity here is noticeably cheaper than the national average of 11.43 cents/kwh.
Why do we pay so little for energy? Sadly it’s because our energy is backed by lots of earth-killing, non-renewable fossil fuels. The effects of all those fossil fuels are already starting to rear their ugly ozone-destroying heads. Not to mention the fact that the price of all those fossil fuels has been steadily climbing higher and higher. The price is only going to keep rising, and rising … and rising, and those shiny solar panels on your roof are going to look better, and better, and better.
Georgia Solar Rebates
Georgia lacks any statewide solar power rebate program. A few small utilities offer rebates, but the payments are fairly meager compared to most that we’ve seen. Central Georgia EMC, GreyStone Power, Cobb EMC, and Jackson EMC offer customers a rebate of $450/kilowatt (“kw”) up to a maximum of $4,500. Sawnee EMC offers a solar rebate of $300/kw, capped at $3,000. For many Georgia residents, though, who use Georgia Power, there isn’t any rebate available.
Georgia Solar Tax Credits
Georgia used to have a good solar tax credit for homeowners switching to clean solar power. The program offered a credit of up to 35% of the total installation cost, up to a maximum of $10,500. That was on par with a number of states with a strong RPS. Unfortunately, however, the program ran out of funding. Now, the only solar tax credit Georgia residents can take is the Federal Solar Tax Credit.
Georgia Solar Tax Exemptions
Georgia also lacks solar tax exemptions. Tax exemptions are a simple and effective way to incentivize solar power. Sales tax is 4% here, i.e., a sales tax exemption would save you 4% on the purchase of your solar power system.
Even worse is the missing property tax exemption. When you install a solar power system you save money on your monthly electric bill. The savings in electricity costs translates into a boost in your home’s value. Sadly that still means an increase in property taxes here. Georgia needs to get on board with so many other states that have already done away with that albatross on residential solar power.
Georgia Solar Performance Payments (and RECs)
Performance payments in Georgia are currently limited to customers of the municipal and cooperative electric utilities that purchase power from the Tennessee Valley Authority (“TVA”). Utilities purchasing power from TVA cover Catoosa, Chattooga, Dade, Fannin, Floyd, Gilmer, Gordon, Murray, Towns, Union, Walker and Whitfield counties.
If you’re in any of those counties you’re eligible for TVA’s Generation Partners (“GP”) program. The GP program will will purchase 100% of your solar output at the retail rate plus a premium of $0.12/kwh. Your utility will track how much electricity your solar power system produces and how much electricity you consume. You will continue to be billed at the normal retail rate every month for the energy you use, and then your solar performance payments will be applied as a credit to the final bill. If the credit outweighs your charges, the utility will cut you a check for the difference. The utility chooses whether they send you that check either monthly or yearly.
Net Metering and Interconnection in Georgia
With net metering set up your utility will keep track of how much energy your solar power system produces, and how much energy consume. If you run a surplus in any month, you will receive a credit for that surplus on your next bill.
Unfortunately that’s about all Georgia’s net metering law says. There are no safeguards to stop the utilities from springing unanticipated fees on you, a cap on residential systems that may not allow all customers to produce all of their energy needs and still take advantage of net metering, and a woefully small aggregate capacity limit.
The aggregate capacity limit is essentially a limit on the number of people that can hook up to one grid to take advantage of net metering. Georgia’s aggregate capacity limit for net metering is currently only 0.2% of the total circuit load. We won’t bore you with the technical details; sufficed to say, that’s low. Real low. If many of your neighbors are already producing their own power, you may find yourself waiting for space on the grid because of the draconian standards the state has set.
Georgia sadly also lacks any regulations preventing utilities from requiring redundant external disconnect switches or separate liability insurance that can unnecessarily cost residential customers money. Nor do the net metering and interconnection laws contain any safe harbor language to protect customers from unexpected fees sprung on them by the utilities.
All in all it’s a pretty sad state of affairs here so far as net metering and interconnection goes. To our ongoing dismay, we haven’t gotten much right here at all.
5kW Example Return on Investment
The news isn’t all bad however. Between possible performance payments if you live in a TVA-served county, up-front rebates from some of the small utilities, and of course that giant federal tax credit, there is some help available to help fund your switch to solar. So what’s the bottom line for you?
Installing a typical 5kW solar system in Georgia is likely to run you about $25,000. We’ll assume that you aren’t a customer of TVA or one of the smaller utilities offering a rebate.
- You still get to take 30% off for the federal solar tax credit. The feds calculate your tax credit from out of pocket costs, so no state or utility incentives means a bigger federal tax credit. Subtract $7,500 (30% of $25,000) for a new price of $17,500.
- Don’t forget to subtract your annual utility savings, approximately $630 in just the first year. That brings us to a total cost after year 1 of $16,870.
- With a conservative estimate of future electricity prices (and thus future electric bill savings) your solar power system should pay for itself in about 17 years. You’ll still have several years of life in your solar panels, and from there out it’s all profit baby – almost $14,000 worth.
- In addition to all those savings and all that profit, your home value just went up by more than 12 large.
- And just in case all of that weren’t enough, you’re helping your ecosystem out as well. That new solar power system of yours is the equivalent of planting 110 trees every year!
Remember that these figures are estimates. We try to be conservative in calculating future energy savings and payback timeframes, but your savings could be a bit higher or lower. In short, every home is unique, and the best way to find out how much you can save with a solar power system is to get a free quote from one of our expert installers in your area. Heck, get five quotes. They’re free! Our partners on the grounds will help you plan a system to the specifics of your home that will save you the maximum amount of cash.
So, what’s the bottom line? We said at the outset that Georgia is lacking in a number of important areas. In particular we really want to see a strong RPS here to keep the utilities and the politicians from continuing to get free passes while we burn more and more fossil fuels.
Sadly, Georgia no longer has the 35% state tax credit, which we’d love to see come back. With the state tax credit, the payback time was significantly shorter. The Peach State is only worthy of a “D” for now.