by Kyle Massey
A bill that supporters say could more than double solar power construction in Arkansas moved a step closer to final passage Monday in the General Assembly, one of two pieces of energy legislation cleared by the Joint Energy Committee at the state Capitol.
The legislation, Senate Bill 145, would enable third-party financing for solar energy projects and is key to plans by non taxed entities, including nonprofits, government agencies and schools, seeking to deploy sun power. The other measure, House Bill 1636, would give public entities a greater chance to use the state’s effective energy performance contracting program.
It would also allow public schools to take advantage of the power- and money-saving program, with the Arkansas Department of Environmental Quality’s Energy Office acting as program administrator.
SB145, sponsored by Sen. David Wallace, R-Leachville, and already approved by the state Senate, goes to the House floor for a vote, where approval would send it on to Gov. Asa Hutchinson for his signature. A final vote could come as early as Wednesday.
HB1636, from Rep. Rick Beck, R-Center Ridge, also moves to the House floor, but would also have to get an up vote from the full Senate before reaching Hutchinson’s desk.
Beck, as it happens, is an electrical engineer at Kimberly-Clark in Maumelle.
The bills drew applause from Katie Niebaum, executive director of the Arkansas Advanced Energy Association, a trade group. “Advanced energy products, including energy efficiency measures, renewable energy resources and other innovations, have been an economic driver for the state’s economy,” Niebaum said in a statement. “Demand for these technologies has grown rapidly, with advanced energy businesses investing in local communities to meet that demand.”
She thanked lawmakers and supporters for backing policies to “enhance access to advanced energy solutions.”
SB 145 also got the endorsement of the state’s birds, or at least their human friends at the Audubon Society, which called third-party ownership options for solar power good for Arkansans and “good for birds, like climate-threatened pine warblers and mallards.”
“Solar energy is viable and growing in Arkansas,” said Gary Moody, interim executive director of Audubon Arkansas. “By expanding access to solar through market-driven solutions, we can reduce air and water pollution, create jobs and become more economically competitive.”
Supporters say that, with the third-party option, government and nonprofit groups can take full advantage of federal incentives to cut the cost of a solar array, “unlocking capital to invest in local communities,” as the AAEA put it.
An analysis by the Business Innovations Legal Clinic of the William H. Bowen School of Law calculated that the addition of third-party leasing could double or even triple solar job positions in Arkansas.
HB 1636 would allow extensions of guaranteed energy cost savings contracts beyond a current 20-year threshold under certain circumstances. The extension would be allowed if the contract has either an active equipment warranty period or a “combined useful life” exceeding 20 years. The flexibility would allow for solar systems, with their decreasing costs and long warranties on equipment, to drive new projects, the AAEA said. The bill would also open up energy efficiency benefits to school districts seeking guidance on energy savings; kindergarten through 12th grade schools now fall outside the program’s parameters.
The state’s utilities have not strenuously objected to the new legislation.
Arkansas Energy Performance Contracting, as it is called, is an essential savings and economic development tool for state agencies, cities, counties and municipal utilities, not to mention colleges and universities, the AAEA said. Under the program, these entities use their guaranteed energy savings to finance improvements to facilities without deploying upfront capital.
Since its inception in 2014, the program has spawned 21 projects, either completed or in development, with a total executed contract value of more than $102 million guaranteeing nearly $150 million in energy savings. By the end of this year, those figures will have more than doubled, and about 9,000 Arkansas jobs are linked to energy savings equipment and services fueled by the AEPC program, Niebaum said.