Correction: The solar farm along Walnut Grove Road at Agricenter International is one of the most visible solar projects in Shelby County. An earlier version of this story misstated its size.
This story also has been updated to include MLGW’s recent budgeting for solar power.
After years of stagnation, Memphis is finally taking major steps toward creating a solar power system.
The news broke earlier this month when Memphis Light Gas and Water announced it would seek a site to install solar panels and purchase batteries to store electricity.
CEO Doug McGowen said the city-owned utility will seek proposals on Friday to install 100 megawatts of solar generation and up to 80 megawatts of battery storage. The move is significant for Memphis, which trails many Tennessee communities and is far behind other Southeastern cities in developing community solar power.
“In our nation and around our world, our demand for energy will soon outpace our collective ability to meet it,” McGowen said. “If we are going to meet our needs here locally and nationally, we need everyone in the game. With today’s announcement, I will tell you MLGW is in the game. We are taking an important huge first step in helping our community … meet the challenges ahead.”
The development hinges on a tentative “side agreement” with the Tennessee Valley Authority that would allow MLGW to generate some of its own power. MLGW currently gets all its electricity from TVA under an exclusive contract that forbids it from getting electricity from any other source.
That decades-old contract has long stood in the way of MLGW developing solar power. Dating to December 1984, the rolling, five-year contract contains language preventing MLGW from getting power anywhere other than TVA.
MLGW is one of just five local power companies in TVA’s 153-local-utility system that hasn’t agreed to a long-term contract that allows signers to get up to 5 percent of their power from other sources. Some local utilities that have signed those 20-year contracts have left Memphis far behind in developing solar power.
McGowen hopes to change that.
“This does nothing to change our fundamental power agreement that we have with TVA,” he said. “This is going to be a side agreement, an amendment. That is what we will work on together, on something that will work for both organizations.”
Solar power is something MLGW has had in the works for at least two budget cycles. MLGW inserted money into its budget for solar power in fall 2023 when it prepared its 2024 budget. Money was then also included in fall 2024 when it prepared the current year budget.
McGowen’s March 5 announcement follows a report in February by the Institute for Public Service Reporting that detailed the impediment that the TVA contract poses to developing solar power.
In 2022, MLGW discussed entering a 20-year agreement with TVA, which would have allowed the creation of its own solar power system. But that long-term agreement was never signed, so the terms of the 1984 agreement remain in place. In May 2023, McGowen announced that the utility would stick with TVA as its power supplier under the terms of the old contract for now.
Was that a mistake?
Not so, said Stephen Smith, executive director of the Southern Alliance for Clean Energy, a Knoxville-based nonprofit. That is because committing long-term to TVA means Memphis likely could never get out from under TVA’s onerous exit clauses to pursue cheaper and cleaner energy sources, Smith said.
Under the terms of the current contract, MLGW must give TVA a five-year notice if it wants to leave. A long-term contract would require a 20-year notice, which means it would be decades before Memphis could get free from TVA.
Solar power would be part of what McGowen called “an aggressive expansion of capacity” to provide electricity for Memphis. McGowen has said Memphis needs to expand the ability to provide electricity for economic growth.
The best example is the establishment of the xAI facility in south Memphis, which has huge power demands. Bloomberg News reported that new artificial intelligence data centers can be drivers of economic growth for communities, but they have huge power demands.
Battery storage is pivotal to plans for solar power because the sun does not shine at night, so the electricity must be generated during the day and then stored for use at other times. But a battery storage system is only the first step toward using the sun to generate electricity.
Scott Brooks, senior relations specialist for TVA, confirmed via email that Memphis is way in the minority when it comes to developing its own power generation writing, “Many of our partners are doing solar and community solar.”
A 2023 study done by the Southern Alliance for Clean Energy titled “Solar in the Southeast” confirmed that Memphis was behind Knoxville and on par with Nashville when it came to using electricity generated by the sun.
The same study showed that Memphis will be even further behind Knoxville by 2027 if things stay the same with the TVA contract. And Tennessee, which is almost entirely served by TVA, is miles behind the average utility in Florida, Georgia, South Carolina and North Carolina.
The goal of creating Memphis’s own solar power system is not new. It was part of the Memphis Area’s Climate Action plan written in 2020.
The plan said the city of Memphis and Shelby County would work with TVA to explore changes to the MLGW contract. The report mentions solar power 35 times as a key goal for the community.
Solar power is not absent in Memphis. The TVA contract does not prevent companies, individuals or even government entities from putting up solar panels and generating power. One of the most visible solar projects in Shelby County is happening at the Agricenter where thousands of vehicles whiz by five acres of solar panels on Walnut Grove Road.
That project, launched in 2012, is generating enough electricity to power 110 homes per year. And it is connected with TVA’s system, showing the potential for solar power in Memphis. Shelby County government also generates electricity with the establishment of its modest collection of solar panels off of Farm Road behind the county construction code enforcement office.
At the March 5 announcement, Mayor Paul Young specifically thanked TVA for agreeing to allow Memphis to move forward with solar power. And he acknowledged how Memphis has been behind when it comes to solar power and creating sustainability energy.
“We know that power is one of the utmost concerns for people throughout this nation. We are thinking about ways to do this more sustainability cleaner, thinking about ways we can limit our impact on the environment,” Young said. “This is such an important step. I cannot say enough about how many strides MLGW has been taking.”
Young cited reliability as a key. Solar power and the batteries to store that power helps a community keep the electricity flowing during blackouts, storms and natural disasters.
Mike Pohlman, MLGW board chair, also acknowledged that Memphis has been behind in creating solar power. He said the board has been pushing MLGW for years to get moving on solar power.
“We have gotten out of the pace of snail. And things are happening a lot quicker. We have been looking at this solar thing for two years now. It is finally coming to fruition,” Pohlman said.
McGowen said the proposals for the solar generation and the battery storage are due back to MLGW by the end of April. He said the goal is to start producing and storing electricity by the end of 2026. MLGW has not yet identified a site for the solar facility, he said.
