Arkansas' Solar Systems Reach Record as PSC Ruling Nears

Arkansas' Solar Systems Reach Record as PSC Ruling Nears

Home and business solar power system installation soared last year in Arkansas, which added a record 812 new net-metering customers between Jan. 1 and the end of the year, according to state numbers compiled by the Arkansas Advanced Energy Association.

That represents a 54% annual increase, to 2,320 total systems under net-metering, the accounting system that lets home and business solar owners get credit for the power they contribute to the electric grid.

The burst came as the state considered changes in net metering that could cut the compensation solar customers get from their utilities.

“As with all industry, local solar business leaders are navigating the impact of COVID-19, while at the same time awaiting a highly anticipated ruling regarding customer-financed solar systems,” the AAEA, a trade group, said in a news release. PSC Chairman Ted Thomas told Arkansas Business two weeks ago that the ruling, four years in the making, was only a week or two away.

“Advanced energy resources like solar are clear economic winners in Arkansas,” said Katie Laning Niebaum, the AAEA’s executive director. “The solar sector can maintain its role as an important economic driver in Arkansas – with tremendous opportunity ahead – if policies continue to align with solar’s economic benefits.”

The association pointed to success stories like Marc Jones of Sunpro Solar’s North Little Rock operation, which has seen “tremendous” sales growth. “In most cases the homeowner or business is simply trading their utility bill for a fixed solar bill that will never increase, and when it’s paid off they will have little or no bill for the life of the system,” Jones said, noting that most systems have 25-year warranties. “Sunpro has recently expanded to northwest Arkansas and has grown to over 100 employees. Even in the face of the COVID-19 pandemic we are projecting 400% sales growth in 2020 and the need to hire an additional 75 employees.”

Niebaum noted strong bipartisan support last year for Act 464, passed by the General Assembly to enable third-party financing of solar arrays and increase a commercial project’s size limit to 1 megawatt under net metering. Act 464 took effect in July of 2019, spurring a wave of solar projects by cities, counties and school districts seeking power savings and environmental sustainability.

The Arkansas Public Service Commission, which regulates the rates and services of Arkansas’ public utilities, including power companies like Entergy Arkansas, is deciding on proposals to change a 1-to-1 retail credit for any unused power sent back to local utilities. The AAEA has argued that customer-financed solar systems are a net benefit for utility systems and all ratepayers through long-term avoided costs, like alleviating the need to build new transmission lines and power plants. The utilities held that customers with their own solar power are passing off their share of grid infrastructure and service costs to other ratepayers who lack their own solar panels.

Solar business leaders fear the state could damage or even destroy an emerging private solar development industry if the PSC goes against the 1-to-1 credit.

Matt Bell, a partner in Entegrity of Little Rock, said the new Solar Access Act allowed his firm to grow to more than 100 employees working on major projects for public and private clients across Arkansas. 

“Thanks to the efforts of the governor, state Legislature and Public Service Commission, we have been able to leverage energy efficiency and renewable energy to help Arkansas’ taxpayers realize millions of dollars in savings through reduced expenses for our public sector clients,” Bell said, adding that private businesses are commissioning solar farms as well. The private sector projects are realizing savings to be “redirected to increase company profitability, job creation, and job retention.”

He said the COVID-19 crisis further highlights the need for Arkansas to avoid hurdles to energy efficiency and renewable energy.

Josh Davenport, CEO of Seal Solar of North Little Rock, said his company was proud of its part in the state’s solar surge. 

“In the last year alone, our nearly 30-person team has completed a record number of projects, including many groundbreaking firsts,” Davenport said in a statement. “In these uncertain times, it’s more important than ever we support pro-solar policies to give homeowners, businesses, government entities, farms and others the certainty, and the power, that they need.”

AAEA solar business members include AEV Solar, Delta SunEnergy, Energy Systems Group, Entegrity, Excel Energy Group, LightWave Solar, McKinstry, Nexamp, Perihelion Solar, Picasolar, Scenic Hill Solar, Seal Solar, Shine Solar, Solar & Renewable Power Systems, Stitt Solar, Stone Creek Solar, Sun City Solar Energy, Sunpro Solar, Today’s Power, Inc. and Trem Wel Energy, with many more advanced energy companies integral to the state’s solar market. AAEA’s electric utility company members — Entergy Arkansas, Oklahoma Gas & Electric, Ouachita Electric Cooperative Corp. and SWEPCO — continue to invest in renewable energy as well.

“What a year for solar in Arkansas,” said Douglas Hutchings, chairman of Delta SunEnergy of Little Rock. “The current policies in Arkansas are effective at spurring investment in local communities and we hope that continues to be the case.”

While generally optimistic, Skip Woessner of McKinstry in Little Rock conceded that the pandemic is taking a toll on the market. “Last year and the beginning of 2020 was a period of strong growth for McKinstry here in Arkansas,” he said. “Unfortunately, COVID-19 has caused a majority of our clients, both in Arkansas and nationwide, to hit the pause button on projects. The [Public Service] Commission should be mindful of the impact of any rule changes with respect to interconnection deadlines, as potential changes could jeopardize unforeseen delayed projects already under contract.”

Arkansas’ electric cooperatives led with 1,315 projects net-metering projects on their lines at the beginning of the year; Entergy Arkansas had 703 and SWEPCO 213, according to data compiled by the AAEA from the utilities’ annual reports detailing net-metering facilities.