Atlanta, October 18, 2011 – Commissioner Lauren “Bubba” McDonald, Jr. today issued the
following statement during the Commission’s Administrative Session:
“It's important for us as Georgians and as the Georgia Public Service Commission to be aware of
industry news and trends. In light of the recent negative press regarding Solyndra and SunPower,
two solar companies here in America, I'd like to address the facts and assess their relevance to
Georgia, the Public Service Commission and our planning for a cleaner energy future.
First, let's address Solyndra. Solyndra received $535 million worth of loan guarantees from the
Federal Government from a process that started in 2009 and ultimately was awarded in 2010.
Solyndra’s technology was the failure, not the solar industry. Solyndra designed and manufactured
a unique and proprietary cylindrical module. Solyndra’s panel was NOT the same thing as silicon- based solar panels that are standard in the solar industry today.
The rush to support a NEW and UNKNOWN technology with the hope of resulting in lower cost
as a way to compete with the ever cheaper Chinese solar panels was a failure. As far as the loan
guarantee and the process, I'll leave that to investigators and the public to decide.
Now SunPower - last week I was VERY concerned over several reports on FOX News regarding
SunPower by Bill O'Reilly, Steve Doocy, Megyn Kelly, Lou Dobbs, and Michelle Malkin for
receiving a $1.2 billion Department of Energy Loan guarantee. FOX News analyzed, in its unique
way, that the loan guarantee from the Department of Energy (DOE) went to support the creation of
jobs in Mexico and that the recipient, SunPower, was a "failing company" and could go under. As
you can imagine, as any American would do, I became concerned and began investigating
immediately.
The result of my investigation shows an attempt by FOX News to create another "solar scandal".
In fact, industry experts, investment banks and all who know the history of solar companies in
America see SunPower as "a success story" and the loan guarantee supports the construction of a power plant in California, not Mexico. More specifically the project is the 250MW California
Valley Solar Ranch (CVSR) Project in San Luis Obispo County, CA sponsored by SunPower and
just acquired by NRG Energy (NYSE: NRG). Construction of the CVSR is underway, and the first phase of the project will begin generating power early in 2012.
As stated above, the recent bad press surrounding "solar" either relates to Solyndra’s solar
technology that couldn't survive in the current silicon panel marketplace or poor, sensationalized
reporting just to elicit another "solar scandal". Accurate information must be used so Georgia can
close the solar gap with other states. Georgia is the 3rd-5th best State for solar energy in the
United States. Yet we are 35th in actual solar installs.
I've watched closely as the solar industry in Georgia has evolved around us. Solar panels have
become more efficient and the cost for a solar installation has fallen dramatically over the past few
years. Just this year alone I've watched as solar panel costs have fallen from $1.80/watt to
$1.20/watt. This represents a 33% reduction in panel cost in only 10 months. These technological
advancements and cost reductions are a byproduct of innovation and market demand. Solar energy
in Georgia has reached grid-parity.
The recent motion by the Georgia Public Service Commission to expand the amount solar energy
by 50MW's (a 1200% increase) represents our careful consideration of these facts on the ground.
Yet we have fallen short on addressing critical elements of any renewable energy project. The
most obvious of these are the Renewable Energy Credits (RECs). A REC (pronounced: rěk)
represents the property rights to the environmental, social, and other non-power qualities of
renewable electricity generation. These property rights are a way to raise the capital to build new
‘distributed generation capacity’. Historically ratepayers were taxed through their electric bills to
raise and guarantee the capital for Georgia Power to build the ‘centralized generation capacity’ that
has served Georgia so reliably for almost 100 years.
Currently RECs from Georgia are undervalued because Georgia does not have a Renewable
Portfolio Standard (RPS). An RPS would help set a market value for these RECs. Thus in a State
without a RPS, a REC’s value is speculative and un-bankable. That uncertainty creates underlying
problems for financiers and businesses to invest in solar projects in Georgia. If a Georgia REC
had a value as low as $0.04, you would see more capital mobilizing to install solar energy in GA
with NO upward pressure to ratepayers.
Subsidizing 50MW's of solar projects would cause upward pressure of only $0.05 per ratepayer
per month. I believe the Commission should further investigate how legislation or action by the
Commission could help set a value to Georgia RECs at $0.04. If we achieve this low REC value,
which is less than the value of RECs in New Jersey, Ohio, Maryland and other states who are
currently aggressively implementing solar, we will have acted in the best interest of our state and
for generations to come.
Finally, since March of this year, ratepayers have noticed an "environmental compliance" fee
which can be as much as 6% of their bills. The Commission and the Georgia Power should
evaluate what, if any, of these charges can be mitigated by increased solar production from
additional third party Purchase Power Agreements (PPA). This review is in the best interest of
ratepayers and important information for the Commission.
Technology and the market have brought us a remarkable turn of events and one that the
Commission should explore immediately. Solar prices today give Georgia an outstanding
opportunity to supplement our fossil and nuclear power sources while creating good jobs and
immediately assist in Georgia's recovery. Solar also brings significant property value and
additional enterprise values to Georgia citizens and businesses that are currently not available to
them through the purchase of electricity.
I look forward to working with my fellow Commissioners, Commission Staff, Georgia Power,
Georgia Legislators and Georgia Solar Industry experts in the immediate future to investigate and
implement needed changes.”
Commissioner McDonald is in the third year of his six-year term on the Georgia Public Service
Commission after having been elected in December 2008. He previously served on the
Commission from 1998 to 2002 as well as serving 20 years in the Georgia General Assembly
where he chaired the House Appropriations Committee. Commissioner McDonald’s full biography
can be found on the Commission web site at
http://www.psc.state.ga.us/pscinfo/bios/mcdonald.asp
