Green power, or renewable energy, is electricity generated from sustainable resources such as the sun, wind and biomass. Green power produces little to no emissions, thereby improving air quality while also reducing dependency on traditional fossil fuels such as coal. Solar generation, also called photovoltaics (PV), is the most common type of renewable energy as solar panels can be installed at individual homes and businesses, or in larger solar farms. The cost of solar installations dropped nearly 70% in the 2010s, according to the Solar Electric Industries Association, contributing to a large number of installations nationwide, especially as Federal tax credits changed. Yet, solar is still uncommon in places like Shelby County, where low electric rates and below average levels of sunshine mean it takes longer to get a return on investment compared to other parts of the country.
There are two ways customers can benefit from renewable generation—participate in programs that feature offsite systems or have solar generation installed at your home or business.
RENEWABLES WITHOUT AN UPFRONT INVESTMENT (OFF-SITE)
- Green Switch enables customers to support green power by making monthly contributions on their MLGW bill to transform their electricity consumption into green energy. For each $2.00 block purchased, TVA generates or purchases 200 kWh of solar power that mixes into the region’s power supply. The participant still buys electricity from MLGW but, for each block purchased, owns the legal rights to claim that 200 kWh of electricity used at their home or business was generated from the sun. Green Switch is a certified Green-e Energy program, which is audited annually by the Center for Resource Solutions to ensure sufficient renewables are available to meet customers’ purchases. There’s no contract to sign, so you can change your participation anytime. Green Switch is an extra cost and does not reduce charges for your electricity usage.
- Residential customers can purchase as many blocks as they wish. Use this calculator to see your impact. Sign Me Up! Tell me more.
- Non-residential customers can purchase as many blocks as they wish as the minimum participation level has been removed Sign Me Up! Interested in large quantities of Renewable Energy Certificates (RECs)? Green Flex may be an option.
- These local businesses proudly support Green Switch.
- Residential customers can purchase as many blocks as they wish. Use this calculator to see your impact. Sign Me Up! Tell me more.
- Green Flex provides large volumes of Renewable Energy Certificates (RECs) for businesses and organizations that need vast amounts to meet sustainability goals. Green Flex RECs are derived from midwestern wind farms, with bundled electricity imported into the Tennessee Valley. For calendar year 2023, each REC is $3.00 (current pricing subject to change) and enables the buyer to claim 1 MWh of electricity usage as renewable. Eligible participants must consume at least 2,000,000 kWh (or 2,000 MWh) annually, across one or multiple sites within Shelby County. Cost is invoiced separate from MLGW bill as an annual purchase. Green Flex is a certified Green-e Energy program with TVA retiring RECs in the name of each individual participant. Enrollment is limited, based on REC availability during each calendar year. Contact us to learn more.
RENEWABLES WITH AN UPFRONT INVESTMENT (ON-SITE)
Wondering if on-site solar generation is right for you?
MLGW offers these five tips:
1. Start with efficiency! Make energy efficiency improvements so your home or business requires less electricity overall, which means you can save money by installing a smaller solar array. Plus, efficiency upgrades often also improve occupant comfort and have a shorter payback period than solar generation.
Customers who feel their utility bills are high sometimes assume solar generation is the answer. Given that MLGW’s electric rates are below the national average, it is the amount of electricity used in that home or business that drives higher costs. Replacing aging heating, cooling and water heating systems will lower energy use. So will adding insulation and weatherstripping, as well as installing more efficient exterior doors and windows, all of which help slow the rate at which your home/building gains and losses heat throughout the year. Identify energy improvement opportunities at your home/building through MLGW’s My Account Explore Usage section, through the MLGW/TVA EnergyRight for Homes program, MLGW/TVA EnergyRight for Business & Industry program and other resources. EnergyRight programs have new efficiency incentives, effective 10/1/2023. Federal tax incentives are available for qualified home and commercial building improvements.
2. Consider why you are interested in solar. Environmental benefits and resiliency are strong motivations, because MLGW’s low electric rates and Shelby County’s below-average solar irradiance (see map) both make solar difficult to justify based on potential utility bill savings alone. While MLGW electricity use generally is lower after installing solar (all other things being equal), it is unlikely that you will eliminate the need for MLGW-supplied electricity. If you finance your solar project, remember that you really are lowering one expense (MLGW bill) while adding a second expense (loan payment) so it likely will be 25 years or more before you see true savings.
3. Find the right installer for your needs. Find TVA-vetted residential installers through the Green Connect Quality Contractor Network. Look for credentials from the North American Board of Certified Energy Practitioners (NABCEP), which is the industry gold standard for solar installers. Check multiple references, especially among clients who had systems installed more than a year ago, rather than people who had systems installed recently and haven’t seen much generation impact yet. Ask references how long the process took from signing the contract to generating solar power and how responsive the solar installer was (answering customer questions accurately and providing project updates). Be wary of installers who begin construction before MLGW has approved your application, which MLGW does not recommend. If you are financing your system, read the fine print—many loans require you to start making payments right away, which could be several months before the system begins generating.
4. Evaluate system size (also called generation capacity). Available roof space (or land) and budget are the primary factors in determining system size but be careful not to over-build. Excess generation sold to TVA is valued below the retail electric rate, which means an over-sized system will have a longer simple payback period. Economically, the ideal system will provide most of your daytime electricity needs in Spring and Fall months, with minimal export to the grid. Adding battery storage to a larger system will help you extend the hours in which your solar array supplies electricity to your home/building (and provides limited backup power), but also increases your project cost.
Use the My Meter Data feature under Explore Usage in My Account to see your home’s electricity usage in 30-minute increments over the last 24 months. (Interval data currently is available for residential customers only.) Your home/building will have very different daily usage patterns, which are affected by weather, equipment/appliance operation and other factors. For example, if your solar array was sized to provide much of your daytime electricity needs in August (when air conditioning use is high), it would yield significant amounts of excess generation most of the year.
5. Calculate your simple payback to estimate the number of years it will take to recover your solar project expense through utility bills savings and any earnings from selling excess generation. Do the math yourself rather than relying on the sales pitch. Due to MLGW’s low electric rates and this area’s below average annual solar irradiance (sunshine), payback likely will take 25 years or longer, even with federal tax incentives. If cost is your main motivator, make sure your net average monthly electricity savings are greater than your loan payment, if you plan to finance the system.
Evaluate the cost and payback for solar arrays up to 50 kW generation capacity with TVA’s solar calculator. The calculator uses MLGW rates updated annually and Tennessee Valley weather data, providing more accurate estimates than national solar calculators. It’s also a great way to fact-check installer information on output, costs and payback periods. (Note that MLGW interconnection costs and the monthly Electric Service Availability charge are not included in these calculations.)
Learn the details before you sign a contract! MLGW highly recommends interested customers learn more about solar generation technology, costs, output and how to find a quality installer by watching Shining the Light on Solar, our virtual community meeting posted on YouTube. Featuring speakers from MLGW, TVA and the Tennessee Solar Energy Industries Association (TenneSEIA), the recording is filled with important information you may not have found in your own research. Considering most solar generation systems cost more than a new car, learning all you can upfront will help you set realistic expectations and avoid surprises later.
Once you’ve done your research, if you’ve decided that on-site solar generation is right for your home or building, you’ll need to choose one of the following interconnection options before submitting an MLGW Application for Interconnection of Distributed Generation.
Self-Generation enables a customer to generate power for use at the home/business. Power generation greater than instantaneous consumption is considered “excess” and flows to the MLGW grid without financial benefit, so it’s vital to size the generation capacity carefully and/or to include battery storage. (Industry research shows the average home uses about 60% of instantaneous solar output, while the average business uses about 80%.) A monthly charge applies as MLGW’s current rate structure splits the fixed costs to serve customers into two parts--the monthly customer charge and as part of the per kWh energy charge. To avoid having all customers fully subsidize Self-Generation customers, MLGW bills a monthly Electric Service Availability charge for customers who self-generate. For residential customers, that charge is currently $13.06 and subject to change. For non-residential customers, the charge varies by applicable electric rate, currently beginning at $28.50 for GSA part 1 customers, and is subject to change. Self-Generation customers may opt to sell any excess power to TVA via the Dispersed Power Production program, described below. Access MLGW forms and resources.
- Dispersed Power Production enables a customer to install on-site renewable generation and sell all or a part of the output under a separate five-year TVA Dispersed Power Production contract. TVA pays its avoided cost, which varies monthly. MLGW reports excess generation to TVA after the end of each calendar month, then TVA processes and pays the customer via direct deposit, not as a credit on the MLGW bill. Participating customers retain rights to all environmental attributes from their total annual generation (the Renewable Energy Certificates, called RECs), which means they can claim an equal amount of their consumption comes from renewable sources. Individuals who own vacant land may use this option as well, since there is no requirement for the site to consume electricity. MLGW smart meters are required. Access MLGW forms and resources.
- Self-Generation with Dispersed Power Production enables a customer to combine the two options by using solar power on-site and then selling the instantaneous excess to TVA. (See details in two bullets above.) Access MLGW forms and resources.
- MLGW customers may participate in TVA’s Green Connect program, which offers residential solar education resources and a Qualified Contractor Network of TVA-vetted solar installers who have the required licenses, industry-leading certification from the North American Board of Certified Energy Practitioners (NABCEP) and program training. Perhaps most importantly, these installers also have agreed to operate using fair business practices for sales and high-quality workmanship. Access the Green Connect portal and Quality Contactor Network list.
- Because MLGW has an all-requirements contract with TVA, we are prohibited from buying electricity from any other source. As a result, MLGW does not offer “net metering.” Should you wish to generate power for use on-site and sell the excess to TVA, then Self-Generation with Dispersed Power Production is the applicable option.
- Federal tax incentives were revised in August 2022 as part of the Inflation Reduction Act. Note that incentives are claimed in the year the solar array is “placed into service,” meaning the date of initial operation as determined by a successful MLGW system acceptance test and documented on the MLGW System Acceptance Form. Learn more at the links below and consult your tax advisor for specific advice.
o Residential tax incentives
o Non-residential tax incentives
- Neither MLGW nor TVA provides financing for renewable generation. Businesses and certain categories of non-profits may qualify for low-interest loans through the Energy Efficiency Loan program at Pathway Lending. Visit www.pathwaylending.org for details about this program, which uses public and private funds to encourage investments in energy efficiency and renewable generation.
- Landowners interested in working with solar developers to build large-scale solar farms may find opportunities for Power Purchase Agreements with TVA. Requests for Proposals (RFPs) are released periodically, based on TVA and market needs. Search “TVA Renewables RFP” for information about past specifications and as future opportunities become available.
Installed Generation Capacity in Shelby County as of 12/31/2022Ninety-nine percent of the systems summarized below are located at individual homes and businesses (mostly on rooftops), which represents 11% of total local generation capacity. The vast majority of generation capacity is associated with three solar farms ranging from 997 kW to 68,500 kW.