Solar Energy Prospects Look Bright in Gainesville

At the start of the 20^th century, the city of Gainesville, Fla., installed modern municipal water, electricity and sewer systems, which made it an attractive location for the University of Florida and helped it become a major educational and cultural hub in the state. Now, more than 100 years later, Gainesville is once again taking bold steps, this time to become a clean energy pioneer in the United States.

On Feb. 5, 2009, Gainesville Regional Utilities (GRU) reached an agreement with the City to implement a landmark feed-in tariff program to promote the use of solar photovoltaic (PV) energy in the area. Under the program, GRU customers who invest in solar PV systems can sell the electricity generated directly to GRU at a fixed price of $0.32 per kilowatt hour for 20 years. The rate paid to new customers decreases each year, as technology evolves and solar PV energy generation becomes more cost-efficient.

Although other feed-in tariff programs have been implemented in the U.S., the GRU program is the first and only one patterned after those that have successfully encouraged renewable energy generation in Europe. Other feed-in tariffs in the U.S. are based on factors like the purchasing utility’s cost savings, the cost of climate mitigation measures, or the value of negative impacts on health and air quality. The European-style feed-in tariff is based on the estimated generation costs of the renewable energy system, plus a mandated rate of return on investment. In addition to being easier to calculate, this guarantees a profit for renewable energy producers because it takes into account actual costs of production.

By offering a long-term guaranteed profit, feed-in tariff programs help make renewable energy generation a stable and attractive investment. Feed-in tariffs have been credited with significantly boosting renewable energy generation in Europe; in 1990, renewable electricity generation in the European Union started growing by an annual average of 3.4 percent, accounting for 14.6 percent of total electricity produced by the end of 2006. Gainesville hopes that its feed-in tariff program will increase local installation of solar PV systems by an average of 1000 kilowatts a year over the next 20 years. As the utility purchasing the generated solar PV electricity, GRU is allowed to pass on the cost of feed-in tariff payments to its customers, though this is estimated to increase consumer costs by less than 1 percent.

The program was implemented in March 2009. Less than a month later, GRU had already received proposals for approximately 40 megawatts of solar PV energy. There are currently 36 solar PV systems installed in the GRU service area, with a total capacity of 210 kilowatts.

The GRU feed-in tariff program has the potential to attract major new renewable energy investments, providing a vital boost to the local economy. More than 220 companies currently produce, sell or install solar PV products in Florida alone. While the program does not require that solar PV equipment be sourced from, or installed by, local or in-state companies, products and service providers must meet all necessary national and local standards and be licensed to operate in Florida.

Solar companies in the Gainesville area report that implementation of the feed-in tariff program has been beneficial thus far, and expect that business will continue to expand in the future. “This will grow the industry,” said Wayne Irwin, president of Pure Energy Solar, a solar contractor based in the city. The feed-in tariff program may also attract solar-panel producers from out of state who aim to capitalize on the expected growth in the local solar industry.

The solar PV projects currently in the pipeline promise to generate more than enough solar PV electricity to meet the program’s targets through 2014. However, an announcement on the GRU website states that the utility “will continue to accept and approve applications…to fulfill targets for future years.”

 

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Photo credit:  University of Florida, Gainesville.