Little Rock – The Joint Energy Committee today passed two legislative proposals that would help spur greater deployment of advanced energy technologies, the Arkansas Advanced Energy Association announced.
“Advanced energy projects, including energy efficiency measures, renewable energy resources and other innovations, have been an economic driver for the state’s economy,” said Katie Niebaum, AAEA Executive Director. “Demand for these technologies has grown rapidly, with advanced energy businesses investing in local communities to meet that demand. AAEA members thank Joint Energy Committee members for their support of policies that will enhance access to advanced energy solutions.”
Senate Bill 145, sponsored by Senator Dave Wallace, would enable third-party financing for those seeking to deploy solar. This financing tool is particularly important for non-tax entities, such as schools, churches, cities and counties, colleges and universities, state agencies, and non-profit organizations. With the option of a third-party solar services contract, these non-tax entities could take full advantage of federal incentives and lower the cost of a solar array, unlocking capital to invest in local communities.
Third-party solar leasing could double or triple the number of solar jobs in Arkansas, according to a recent analysis from the Business Innovations Legal Clinic of the William H. Bowen School of Law, University of Arkansas at Little Rock.
House Bill 1636, sponsored by Representative Rick Beck, would enhance the state’s successful energy performance contracting program by providing public entities with additional flexibility and support utilizing this economic development and cost-saving initiative.
The proposal would allow a guaranteed energy cost savings contract to be extended if its energy cost savings measures possess either an active equipment warranty period or a combined useful life in excess of 20 years. Current law sets a maximum term at 20 years. The contract length extension would provide needed flexibility and put Arkansas in line with the federal government. This flexibility would allow for solar systems to become a driver of projects given the decreasing costs and long warranties of equipment.
HB1636 also would allow school districts to opt into the existing program rules and regulations, therefore allowing all public entities the ability to utilize the ADEQ Energy Office as a program administrator. School districts in increasing frequency have sought guidance and followed program rules, though K-12 currently falls outside of the program.
Arkansas Energy Performance Contracting is a key cost-saving and economic development tool for state agencies, colleges and universities, and cities, counties and municipal utilities. The program provides public entities the opportunity to utilize guaranteed energy savings to improve the energy and operational efficiency of their existing facilities without the need for upfront capital.
The initiative has seen an explosion in interest since its start in late 2014; 21 projects have been fully executed or are in active development, with total executed contract value worth $102.5 million guaranteeing nearly $150 million in energy savings. Those figures are expected to more than double by the end of 2019. Approximately 9,000 Arkansas jobs are tied to energy savings equipment and services and are directly affected by a vibrant AEPC program.
SB145 and HB1636 now advance to the House floor for a vote of all House members. If approved, SB145 would be sent to the Governor to be signed into law. HB1636, if approved, would move to the Senate chamber for a vote of all Senators.