Arkansas’ sun power industry scored a major victory Tuesday afternoon at the state Capitol as the state House approved legislation to allow third-party financing of solar arrays.
The full House passed Senate Bill 145 by an 83-5 vote, sending to Gov. Asa Hutchinson a bill that supporters say could double or triple the state’s solar installation jobs. The measure, already cleared by the state Senate, will open up solar power options for non-taxed entities like nonprofit corporations, government agencies and schools.
Also on Tuesday, the House overwhelmingly approved House Bill 1636, a measure to give public entities a greater chance to use Arkansas’ widely praised energy performance contracting program. That bill, approved 88-2, moves to the Senate for consideration, but is expected to pass.
Renewable energy supporters had an unusual ally in promoting the solar legislation: Entergy Arkansas, the state’s largest electric company. The investor-owned utility had been monitoring the bill, sponsored by Sen. David Wallace, R-Leachville, to make sure that it would not shift any costs to non-solar customers. “We were concerned about cost-shifting, because we want all of our customers to get the benefits of renewable energy, not just a few,” Entergy executive Kurt Castleberry told Arkansas Business. “We appreciate Senator Wallace for his work on the bill, and we’re happy that specific provisions are included to require the PSC to evaluate solar projects to make sure that cost-shifting doesn’t occur.”
Castleberry is Entergy’s director of resource planning and market operations.
Katie Niebaum, executive director of the Arkansas Advanced Energy Association, a major supporter, said SB145, which the governor is expected to sign, will let non-tax entities reap the full benefits of solar arrays, “unlocking capital” to invest in local communities.
“Advanced energy technologies provide jobs and energy savings in states that deploy them,” Niebaum said in a statement. “By enhancing access to these resources, as Senate Bill 145 does, solar development can play a greater role in Arkansas’s economy. AAEA sincerely thanks Senator Wallace for his leadership and applauds House members for their support of this advanced energy job creation measure.”
Arkansas, starting from a disadvantage, is now among the fastest-growing states for solar job creation, the AAEA said, and third-party solar leasing could double or triple solar jobs in Arkansas, according to a recent analysis from the Business Innovations Legal Clinic of the William H. Bowen School of Law in Little Rock.
Reps. Aaron Pilkington, Stephen Meeks, Vivian Flowers, Johnny Rye and Jack Ladyman all spoke in the bill’s favor, with Ladyman, R-Jonesboro, calling solar power an increasingly competitive and affordable energy resource. “I think this is a good bill,” Ladyman said. “Solar power is getting a lot cheaper and will continue to do that because there have been many advancements.”
Flowers called renewable energy “important to economic development,” and Rye predicted the change will help cities and counties.
HB1636, sponsored by Rep. Rick Beck, would allow a guaranteed energy cost savings contract to be extended if its energy cost savings measures include either an active equipment warranty period or a combined useful life in excess of 20 years. Current law sets a maximum term at 20 years. The contract length extension would put Arkansas in line with federal government standards and allow for solar systems to become a driver of projects given the decreasing costs and long warranties of equipment, the AAEA said.
HB1636 also lets school districts join under existing program rules and regulations, utilizing the Arkansas Department of Environmental Quality’s Energy Office as program administrator. K-12 schools currently are not included in the program, which gives public entities a chance to use guaranteed energy savings to finance energy and operational improvements at their facilities without using upfront capital.
Since its start in late 2014, the AAEA said, 21 projects have been fully executed or are in active development, with total executed contract value worth of $102.5 million guaranteeing nearly $150 million in energy savings. Those figures are expected to more than double by the end of 2019.
Some 9,000 Arkansas jobs are tied to energy savings equipment and services and are directly affected by the program, Niebaum said.
“The successful Arkansas Energy Performance Contracting program has been an economic driver for the state since AAEA members helped secure its adoption in 2013,” she said, thanking Beck for his support. The bill now advances to the Senate chamber for a vote.