Rising sun, meet bottom line.
Private-sector corporations in Arkansas are taking the spotlight with multimillion-dollar solar power projects, with a goal of cutting costs.
Lexicon Fabricators & Constructors and Bank OZK, both of Little Rock, have commissioned two of the biggest non-utility arrays in the state, and Walmart is extending its environmental commitment with solar and efficiency features in preliminary blueprints for its new headquarters in Bentonville.
“Customers are saying yes, including private companies,” said Heather Nelson, president of Seal Solar of North Little Rock. Seal and Lightwave Solar of Tennessee are putting up 11,000 photovoltaic panels in two installations for Lexicon: one in Carlisle to serve the steel builder’s Little Rock headquarters, the other near fabrication and steel mill maintenance operations in Blytheville.
“Clients are saying yes to saving money, yes to being environmentally conscious, and yes to asserting control over their utility budget,” Nelson added.
Lexicon expects the solar yield to offset operational costs by $320,000 a year, about half of Lexicon’s total electric bill in Little Rock and Mississippi County.
“Lexicon defines excellence in everything we do, from cutting-edge fabrication equipment to comprehensive project management software,” Patrick Schueck, president and CEO, said in a statement. “The choice to go solar is no different. This project is not only good for the environment, it’s a wise business decision.”
‘Always Had a Balance’
Bill Halter, whose Scenic Hill Solar of North Little Rock is building a $6 million-plus array for Bank OZK, said that when known companies start harnessing the sun, Arkansans notice.
“We’ve always had a balance between private-sector and public-sector clients, and you can see that from our early projects,” said Halter, who was Arkansas’ lieutenant governor before forming Scenic Hill. The company’s first project in 2016 was building solar plants for L’Oreal, the cosmetics giant.
It’s designing Bank OZK’s array as the $23 billion-asset bank is moving to a new 248,000-SF headquarters in west Little Rock with room for more than 800 employees. The solar project, which will not be on the 44-acre campus, will be the largest renewable energy investment by any Arkansas-based financial institution, said Tim Hicks, the bank’s chief administrative officer and executive director of investor relations.
“Solar energy felt right to us, and over the long horizon, there will be savings from ownership,” Hicks said. The bank has several possible locations for the 4.8-megawatt, 12,000-panel array.
“Certainly our shareholders and customers are looking for us to be leaders in all categories,” Hicks continued. “We’ve seen a lot of interest in renewable energy, including among shareholders, and we want to be a leader in that space as well.”
Bank OZK will own the solar power plant, which awaits review by the Arkansas Public Service Commission. Hicks said the project “is non-polluting and will give our bank stable, predictable energy costs for decades.”
Katie Niebaum, executive director of the Arkansas Advanced Energy Association, said businesses are “just now starting to scratch the surface with a long runway of opportunity ahead. Solar customers are interested in the utility cost savings,” but they’re also “messaging to stakeholders that they are powered by a clean energy resource.”
A 26% federal solar investment tax credit, slated to fall to 22% in 2021, is a “motivating factor” as market forces keep pushing down solar costs.
“We also currently have a favorable net-metering environment in Arkansas,” Nelson said, referring to rules on how much utilities pay for locally generated power. Those rates, a key factor in determining ROI on solar projects, are under review by the PSC, which will hold a hearing on the topic Feb. 19 in Little Rock. “It’s likely we will see a final order a few weeks after that,” Niebaum said. “Through years of deliberations, AAEA has argued that distributed generation is a customer-financed investment and a net benefit for utilities and ratepayers.”
In Bentonville, Walmart is building its new “home office” in phases from 2020 through 2024, with plans to accommodate 14,000-17,000 workers on 350 acres east of J Street.
“We are designing the campus to reflect the company’s broader sustainability goals, to be good stewards of our natural resources and minimize our impact on the environment,” said Anne Hatfield, Walmart’s director of global communications. Plans include solar panels on parking decks and the roofs of certain buildings, but “we are still very early in the home office design phase, so it’s premature to discuss the use of solar in detail at this point.”
Walmart has been installing rooftop solar on stores around the world, and that effort will continue, officials said. Other sustainability features for the headquarters include “stormwater collection and re-use, smart irrigation, drought-tolerant plants, carbon-negative locally sourced mass timber, and solar,” Hatfield said.
“Companies are looking at solar through a different lens,” said Nelson of Seal. “Are they incorporating renewable energy policies and commitments into their businesses? Walmart is an example, and its policy relates not just to clients, but to vendors they work with. Solar allows firms to spread the word that they do have sustainability policies.”
Lexicon’s projects involve about 6,600 panels in Carlisle powering Little Rock operations and nearly 4,300 modules serving the Blytheville facility. No cost estimate was provided for the project, but it is expected to be the largest yet for a private business in Arkansas. Publicly traded Bank OZK has not revealed what savings it expects from its solar project.
Lexicon paid $1.3 million for its Lonoke County site, 336 acres of farmland sold by Bill Webb, Charline Hale, Ron Hale and Vicki Hale. The Blytheville project required no land purchase, according to company officials. The tract, on Raborn Road south of town, is adjacent to an Entergy Arkansas electrical substation, making the property ideal for a relatively simple connection.
Project for Water Utility
To reinforce his point on having a wide client mix, Halter noted that privately held Scenic Hill is working on a project for Central Arkansas Water that’s roughly comparable to the Bank OZK’s. “There are many different kinds of clients finding this appealing and cost-effective, largely for savings and environmental benefits,” he said in a telephone interview. “Even the desire of customers for more sustainable operations by companies has become a factor. These same benefits appeal to public entities.”
The CAW project will put 12,300 solar panels on 30 acres off U.S. 67/167 near Cabot. The board of the water utility, the state’s largest with 450,000 customers, approved the project in December.
Arkansas’ list of private-sector, non-utility solar projects includes Aerojet Rocketdyne’s 12-megawatt array in East Camden, Husqvarna’s 1.4-megawatt unit at a factory in Nashville (Howard County), L’Oreal’s 1.3-megawatt array in North Little Rock, and Caney Creek Farms’ 0.99-megawatt plant in Cross County, built by Stone Creek Solar of Jonesboro. A dozen of the state’s 25 largest solar arrays went up just last year.
“I think part of what we’re seeing is just that there are more and more of these projects,” Halter said. “There’s an increasing amount of data that the industry is moving forward.”