Alabama Power's 500 MW of solar could brighten dim state

Alabama Power

While you might be able to count 500 megawatts of solar energy generation on residential rooftops in a single small California town, an Alabama utility’s proposal to add that much solar capacity is making big headlines.

Alabama Power proposed to the state’s public utilities commission earlier this month to build or contract to buy 500 megawatts of renewable energy.

Why does this utility, which has not made many strides to add renewables to its portfolio before, suddenly have an interest in solar? Alabama Power has several corporate customers with shareholders and national pressure and some even with corporate regulations requiring them to get a certain percentage of their power from renewable sources. If Alabama Power can’t provide it, those businesses will either have to begin generating their own power on site or – more likely – they’ll move. That would be bad for the local economy and bad for the utility, which is owned by Southern Company, an investor-owned company with several utility holdings.

The proposed 500 megawatts would represent about 5 percent of the utility’s total capacity, which is pretty significant. The package that the utility presented to the commission includes several 80-megawtt projects. The commission can either approve the proposal as a package or require the utility to come back and get approval for each project as it’s developed.

Of course, Alabama Power’s proposal aims to provide renewable power – at a premium – to corporate customers only. The renewable energy will not be available to residential customers. And it will come with extra charges.

That’s despite a recent poll conducted by the Alabama Solar Knowledge Project that showed Alabamians overwhelmingly support investment in solar energy and oppose charging solar customer extra fees. Instead of spreading the cost of adding the new capacity to the grid across bills for all ratepayers the way the utility would if it were expanding or upgrading one of its coal-fired power plants, the utility will pass all of the cost of adding the renewable capacity onto the businesses that want it.

That’s contrary to how the vast majority of Alabamians want to see solar and other renewable energy incorporated into the grid, according to a recent survey of 1,600 residents conducted by the Alabama Solar Association.

“Alabamians are overwhelmingly in favor of their utilities boosting the use of solar energy to generate electricity, and they are nearly unanimous in their opposition to penalizing solar by tacking on fees,” according to the association’s report.

Alabama is a state rich with solar resources. An Arizona State University study ranked it 8th in the nation for its solar potential. But it’s actual solar deployment puts the state in 48th place nationally.

That’s almost entirely due to weak solar policies that don’t encourage investment. In fact, the policies are so dim they tend to discourage solar development.

So, Alabama Power’s proposal to invest in 500 megawatts of solar, while not ideal, is sunny news in one of the darkest corners of the country.