Heather Nelson of Seal Solar Solutions of North Little Rock and other renewable energy companies are pushing businesses interested in solar power to act now, before federal investment tax credits begin sunsetting at the end of the year.
"The solar investment tax credit is now 30 percent for residential and commercial properties, but that's going to start going down," she told Arkansas Business at a ceremony last month as Seal Energy Solutions became Seal Solar Solutions, selling its efficiency and HVAC operations to focus solely on sun power projects.
"That credit will be 26 percent for projects started in 2020 and then 22 percent for those that start building in 2021," Nelson said, pointing to a Cabot self-storage business as an example of organizations reaping the current tax bonanza.
Deer Creek Mini Storage is now the first solar-powered self-storage facility in central Arkansas, Nelson said. Last week, her company installed 80 panels at 12 Douglas Road in Cabot, enough to produce nearly 40,000 kilowatts of power a year and save the business a projected $140,000 in total energy costs over 30 years.
"Thanks to state and federal incentives, including the 30 percent Investment Tax Credit, solar is more affordable than ever," said Nelson, Seal Solar's co-founder and chief operating officer. Executives like Bill Halter, the former Arkansas lieutenant governor who is CEO of Scenic Hill Solar of North Little Rock, routinely point out the importance of tax incentives in offsetting project costs.
Nelson called Seal's project in Cabot both innovative and cost-effective, assessments seconded by Deer Creek Mini Storage owner Alese Stroud. Deer Creek secured several funding incentives, including a $16,000 grant from the federal Department of Agriculture's Rural Energy for America Program. To offset additional costs, Deer Creek is installing site-wide energy efficiency upgrades, including LED lights and new insulation for its office building and climate-controlled units. After the renovations, alternative energy sources will power 90 percent of the storage facility.
"Deer Creek Mini Storage has expansive rooftops, abundant sun exposure and eco-conscious consumers," Stroud said. "Environmentally and financially, solar was the right choice" for the company, a gated, self-storage facility with ID-controlled, 24-hour access.
The solar Investment Tax Credit has been a crucial federal mechanism for growing solar energy adoption nationwide, industry leaders say. Since the credit was enacted in 2006, the value of solar industry projects has increased nearly 9,000%, though solar power still provides less than 2.5% on electric energy produced nationwide.
"Despite the overwhelming success and popularity of the ITC, the value of the credit will unfortunately start decreasing after 2019," the Solar Energy Industries Association said in a press statement. "The 2015 extension of the ITC has provided market certainty for companies to develop long-term investments that drive competition and technological innovation, which in turn lowers energy costs for consumers."
For projects commencing in 2022, commercial and utility-scale projects will reap a 10 percent credit; the incentive for residential projects will cease.
South Arkansas Technical College and Today's Power Inc., a Little Rock solar installation company, plan to throw the switch Thursday afternoon to power up a 1-megawatt solar array in conjunction with Ouachita Electric Cooperative Corp.'s 80th annual meeting in Camden.
Gov. Asa Hutchinson was scheduled to speak on solar power accomplishments in South Arkansas, including Ouachita Electric's own 1-megawatt array built by Today's Power and OECC's partnership with aerospace contractor Aerojet Rocketdyne and and solar builder Silicon Ranch Corp. of Nashville, Tennessee.
That 12-megawatt project on 150 acres near Aerojet Rocketdyne's 1,200-acre site at Highland Industrial Park in East Camden was the state's largest when it was built in 2015, big enough to power about 2,400 homes.