Solar power generated at individual homes and businesses remains relatively rare in Arkansas, but it has been growing. Support has come from falling prices, tax incentives and a 2013 state law that allows residents to get loans for solar installation through improvement districts and pay them off via additions to their property tax bills.
The Public Service Commission is also reviewing state rules that could profoundly affect solar’s future. One focus of the review is net metering, the billing system that lets customers with solar panels and other renewable energy facilities essentially sell back excess electricity to power companies.
This review has put solar growth at a crossroads, participants in the process say.
(See also: Solar Power On the Rise in Arkansas)
At the end of 2015, just 422 electricity customers in Arkansas had net metering generation systems, said Ken Smith, policy director of the Arkansas Advanced Energy Association, a renewable power advocate. “Half the NMFs [net metering facilities] in the state are 4.7 kilowatts or less,” Smith said. “That tells you that the vast majority of the NMFs are for residential use.”
That total could skyrocket, Smith says, if the PSC emerges from a review with proposals favoring renewable energy.
The PSC has opened two dockets seeking comment on policies for home electricity generation, with final results expected by September 2017.
The key outcome will be how to implement the state Legislature’s 2015 requirement that utility bills reflect the costs and benefits of serving net metering customers.
Clean energy proponents like the AAEA and the Sierra Club favor less reliance on Arkansas’ five coal-powered electric plants, including Entergy’s White Bluff and Independence plants. The plants have kept Arkansas’ retail electricity costs among the lowest in the nation at an average of 8.44 cents per kilowatt-hour, according to the U.S. Energy Information Administration. The U.S. average was 10.53 cents.
“The nut of it all is that the PSC is trying to figure out how much of a fee to add to net metering customers, to cover the utilities’ cost of service,” said Glen Hooks, director of Arkansas’ Sierra Club chapter.
“Some states have really jacked these fees up or attempted to in a big way, allegedly to recover these costs, but I think really to discourage people from getting solar on their homes. We don’t want net metering customers to be charged a penny more than is absolutely necessary.”
A public hearing on the net-metering rules is scheduled for 9:30 a.m. Oct. 4 at the Public Service Commission headquarters, 1000 Center St. in Little Rock. Investor-owned utilities and electric cooperatives operating in Arkansas are parties to the dockets, along with the PSC staff and the state attorney general. Intervenors include solar companies, environmental and consumer groups, the AAEA and Pulaski County, which hopes to establish its own solar facilities, as well as assist in creating a framework where its citizens have the best possible opportunity to pursue solar facilities.