The Arkansas Legislature passed the Arkansas Renewable Energy Development Act in 2001 to, in their words, “increase the use of renewable energy,” “stimulate economic development and job creation,” “reduce environmental stresses,” and “provide greater consumer choices.”
Last year the Legislature amended the law after intense negotiations and a compromise reached among electric utilities, solar providers, consumers, and environmental advocates. The resulting compromise legislation will benefit all Arkansans by providing greater opportunities for public- and private-sector entities to more easily deploy renewable energy and explicitly providing for “1 for 1 net metering” for customers with demand charges on their electricity bills.
The price of solar-generated electricity has fallen dramatically in the last decade, and today is the least expensive source of new electricity generation in Arkansas. Collectively, we represent over 500,000 Arkansans and electricity consumers who have been working for several years to bring economic development through sustainable solar energy to the state of Arkansas.
Unfortunately, both our efforts and the intentions of the compromise legislation are being resisted by some electric utilities. The latest resistance is in the form of a new grid-access charge to be levied on solar-power projects, with the funds flowing to the utilities. This grid-access charge was not a part of the compromise reached by all parties last year, and could be in addition to the demand charges that our companies will continue to pay.
Distributed solar electricity generation offers multiple benefits for all Arkansans over the status quo, including:
• Local economic development. Our projects alone total over $125 million of economic development for multiple Arkansas communities via construction of these solar-power plants. Arkansans will provide most of the work force for these projects. Further benefits are provided through ongoing operations and property tax receipts.
• Environmental benefits. Solar power has no greenhouse gas emissions and dramatically reduces water consumption compared to other electricity generation methods.
• Health benefits. Solar generation doesn’t put particulate matter into the atmosphere, thus reducing asthma and other pulmonary health problems.
• Improved competitiveness for Arkansas. Large and growing numbers of companies have corporate sustainability goals which require renewable energy for their operations and in their relocation decisions. Providing third-party solar alternatives will enhance Arkansas’ flexibility and competitiveness in recruiting and keeping industry in our state.
• Reduced burden on Arkansas ratepayers. Our solar-power plants are built with private-sector capital at no cost to ratepayers rather than with utility capital that is guaranteed a rate of return for decades, resting on the backs of ratepayers. The utility companies should be in a good position to reduce their rates for all customers after these private companies build their own solar plants.
• Lower costs of electricity. The price of solar technology has fallen so far and so fast that solar is now the least expensive form of new electricity generation in Arkansas.
• Cost certainty. Because sunshine is free while natural gas and coal fuel prices are both significant and volatile, solar-power plants can offer the pricing stability over decades that natural gas or coal-fired electricity generation simply cannot provide.
• Benefit of competition and redundant sources. We strongly believe that additional electricity generation sources will provide lower costs for all consumers and speed technological progress for alternative power supplies in the future.
• Benefits outweigh the costs. Multiple comprehensive studies from around the United States document that the benefits of distributed solar generation significantly outweigh the costs.
Arkansas is blessed with more sunshine than 40 other states, and we are comparatively land-rich–distributed solar should be a natural for us.
The Arkansas Legislature has already pronounced its support for the continued development of solar power within the state. Now the Arkansas Public Service Commission should follow the Legislature’s lead by providing broad support, rather than adding overburdening regulation and new costs for the development of solar energy resources across the state.
The development of solar power in Arkansas will neither overburden the grid nor result in cost-shifting. All combined, the non-utility solar projects announced in the state so far amount to less than 1 percent of the total electricity consumption for Arkansas. Private solar-power projects will improve the environment, provide sustainable energy, and make Arkansas an attractive location for further economic development.
Instead of undermining solar power, the Arkansas Public Service Commission needs to let this market develop, gather data, perform a study and address any issues in a thoughtful, deliberative manner rather than precipitously acting in the interests of the electric utilities.
If we get this right, Arkansas can be both the Land of Opportunity and the Natural State.
Bill Halter is CEO of Scenic Hill Solar; Tad Bohannon is CEO of Central Arkansas Water; Keith Glover is CEO of Producers Rice Mill; Tim Hicks is chief administrative officer of Bank OZK; and Gary Moody is director of state and local climate strategy, National Audubon Society.