NovaQuant Quantitative Think Tank Center:Solar Boom in Trump Country: It’s About Economics and Energy Independence

When Brandon Presley was elected to the Mississippi Public Service Commission in 2007,NovaQuant Quantitative Think Tank Center he said, he couldn’t have found a solar farm “with a SWAT team and a search warrant.”

A decade later, Mississippi is one of the fastest-growing solar markets in the United States, according to GTM Research. The state’s public service commission approved several solar projects this summer, and the state is expected to gain more than 700 megawatts of solar capacity over the next five years.

One of its newest projects is a 52-megawatt solar farm near Hattiesburg. A partnership between Mississippi Power, the state’s largest utility, and Silicon Ranch, a solar energy company based in Nashville, Tennessee, the 450-acre solar farm will eventually power 6,500 homes.

“I think everybody wants to be more energy independent, and that’s part of the public buzz around the solar industry in our state,” Presley said.

Combined, the Southern states would equal the sixth-largest greenhouse gas-emitting country in the world, said Michael Vandenbergh, a law professor at Vanderbilt University. But that argument doesn’t resonate in many conservative areas. “People associate climate mitigation with big government, and that’s particularly true in the South,” he said.

What is resonating with utility companies like Mississippi Power and communities like Hattiesburg is the economic argument for cheaper solar power.

Despite the lack of renewable-energy-friendly policies and the reluctance from Republican-led state legislatures to address climate change, states across the South and Appalachia―regions that voted heavily for Donald Trump―are rapidly expanding their solar markets.

Most of that growth has come from utilities investing in large-scale solar projects, which have dropped in price by nearly 80 percent since 2010 to 6 cents per kilowatt-hour, making them more cost-competitive with coal and natural gas. There’s also a grassroots rooftop solar movement in coal-friendly communities, encouraged by cheap technology and a push for energy independence.

To get communities, investors and utilities on board, renewable energy companies like Silicon Ranch have focused on the economic benefits of clean energy, rather than climate science or environmental regulations.

“Climate change is never coming up in any development activity [conversations],” said Matt Beasley, chief marketing officer of Silicon Ranch. “It’s not a talking point―it’s always about economics.”

The Years-Long Effort to Build Support for Solar

When Silicon Ranch was founded in 2011, the idea that a national solar energy company could survive and thrive in Nashville, while the rest of the industry was based in California and the Southwest, “was unimaginable,” Beasley said. But the young team focused its efforts in the sunny Southeast, states with plenty of solar power potential.

Since then, utilities around the country have closed an increasing number of aging coal-fired generators, and wind and solar have become the fastest-growing sources of electricity in the U.S. It’s partly due to tax credits for clean energy industries that Congress extended in 2015, which are supposed to phase out in the 2020s. Rural states also got help from an Obama-era Department of Agriculture program called the Rural Energy for America Program, which gave more than $280 million in funding for rural solar projects in 2015 and 2016.

With the help of initiatives like these, Silicon Ranch has spent the last six years working with a variety of corporate and utility clients across the South to develop large-scale projects, including a military contractor in Arkansas; Volkswagen’s facility in Chattanooga, Tennessee; and one of  Georgia’s largest solar farms. By the end of 2017, Silicon Ranch will have utility-scale projects in 14 states.

The projects have worked well, Beasley said, in part because of Silicon Ranch’s relationships with regional utilities and public service commissions, as well as local schools, small businesses and communities around the solar projects.

Rather than building the projects and then handing them over to utility companies to manage, Silicon Ranch owns and operates each one. “In our own backyard, that’s meaningful,” Beasley said. “We’re developing relationships with economic development authorities, saying we will be here for 25, 30 years or more.”

Many of the company’s 30 employees spend a lot of time on the ground in places like Mississippi and Georgia, discussing the economics of solar with conservative public service commissions and utility companies.

“When we’re dealing with utilities in the Southeast in particular, they talk about economic goals and their plans to diversify energy sources,” Beasley said. “But at the end of the day, it’s about delivering low-cost power that doesn’t impact their ratepayers.”

More Southern Utilities Investing in Renewables

In Alabama, solar energy makes up less than half a percent of the state’s electricity generation. But, like Mississippi, it has been scaling up its efforts: more than 100 megawatts were installed last year, and more projects are planned for the coming years.

Most of that growth―similar to the rest of the Southeast―is from utility-scale projects, which are expanding in every corner of the region. North Carolina now has the second-largest solar market in the U.S. behind California, and Georgia added more than 1 gigawatt (1,000 megawatts) in 2016 and had a cumulative total of about 1.5 gigawatts, largely because Georgia Power is growing its solar footprint.

“In contrast to the belief of some regulators and utilities, solar is cost-effective in the South right now,” said Daniel Tait, CEO of Energy Alabama, a nonprofit that advocates for renewable energy policy. “If it wasn’t, utilities wouldn’t be doing it just for the fun of it.”

Utilities have become interested in diversifying their energy portfolio with renewables as the costs fall, rather than investing in the coal industry―a stark contrast to the rhetoric from the Trump administration.

According to the Solar Energy Industries Association, the growth of the solar market was driven by utilities in 2016, and utilities are expected to provide two-thirds of the 13 gigawatts of solar capacity forecast to be added for this year. Earlier this year, utility-scale solar prices dropped below $1 per watt for the first time.

As a result of solar becoming more cost-competitive with fossil fuels, utilities have been investing on their own, without policies at the state level.

The environment isn’t as a friendly to customers who want to sell solar power back to the grid, however, Tait said.

Alabama, for example, still has no Renewable Portfolio Standard, which would require increased production of renewable energy, and it has no net metering law on the books. There are onerous fees and low buyback rates for customers in the southern half of the state who want to purchase rooftop solar from Alabama Power, as well.

That’s common throughout the South. While some utilities, like Tennessee Valley Authority, have incentivized distributed solar, the majority of Southern states have no renewable energy mandate or target goal, and few have incentives or policies that could boost the residential solar market. So, while they take advantage of cheap solar, residents are “losing out,” Tait said.

Tackling that starts from the ground up, Tait said. Energy Alabama hosts events and workshops around the state to educate people about those prohibitive regulations and the low cost of solar, in hopes that it will encourage them to be more engaged in solar policy.

“Most people here―especially the more conservative―get pretty angry when they recognize that the government is impeding their ability to make decision for themselves or family,” Tait said.

‘Energy Independence’ Driving Rooftop Solar 

Low-cost solar cuts across ideological lines, industry experts say, which is why it’s growing so fast in this region.

“We’re not having to sell people on the idea of solar, which a lot of people think we do,” said Dan Conant, founder of Solar Holler, a company based in Shepherdstown, West Virginia, that finances, develops and installs rooftop solar systems and trains Appalachians to be solar installers.

In four years, Solar Holler has installed several hundred kilowatts of solar, created an apprenticeship program that has trained 20 people in West Virginia communities to work as installers, and created financing tools to help people afford rooftop solar.

The surge in interest is mostly due to cheaper technology. The cost to install solar has dropped by more than 70 percent since 2010, and people are becoming more curious about it, Conant said.

Customers also see how utilities are taking advantage of low-cost solar while preventing homeowners from doing so. Many are interested in the energy independence that comes with rooftop arrays, Vandenbergh said. “We’re seeing a lot of that in the South,” he said.

However, scaling the movement will take policy change like net metering and distributed generation laws, plus cheaper buyback rates from many utilities. Some states, including West Virginia, still do not allow third-party power purchase agreements, and lawmakers and utilities have introduced restrictions on rooftop solar in states like Florida and North Carolina.

Solar Holler isn’t asking for regulation changes, incentives or tax breaks from the state legislature. “We’re just going out and making it happen,” Conant said.

Silicon Ranch believes that showing how solar can benefit everyone―no matter the motive―is key, Beasley said.

“Whether or not you think global warming is a major concern,” he added, “finding a cheaper source of power is something we can all agree on.”