AMPed Up Energy Industries

An ecological investment: Arkansas’ struggle with solar net-metering

Joe Kramer
Written by Joe Kramer

The natural state has given solar power the cold shoulder for well over a decade. Here at AMP, we explored why that is, and what Arkansas officials and organizations are doing to advocate the use of renewable energy through net-metering.

 

With the advent of the Arkansas Renewable Energy Act of 2001, Arkansas was one of the first states in the nation to implement an environmentally and economically friendly system of utilizing new solar technology via net-metering.

Net-metering is a system in which solar panels or other renewable energy generators are connected to a public-utility power grid and surplus power is transferred onto the grid, which allows customers to offset the cost of power drawn from the utility.

The benefits of net-metering were pivotal in the push for solar energy nationwide. It gave homeowners and businesses the ability to supply themselves in an environmentally friendly way that also created a revenue stream for the solar panel owner over time.

Fifteen years later, fewer than 500 people are net-metering customers in the state, while there are more than one million net-metering facilities in the nation.

This is largely because electricity in Arkansas is among the least expensive in the nation. At the time of the adoption of the AREA of 2001, the state saw advances in technology that streamlined hydraulic fracturing, and tapping deeper for deposits of natural gas became much easier. This made natural gas cheaper and more accessible to the fossil-fueled power distribution infrastructure within the state.

Despite this, federal programs, such as the Federal Investment Tax Credit, were set up to stimulate solar panel technology usage and net-metering adoption. This credit allots $10 billion nationally. Arkansas has a population of nearly three million people, which would put us at about one percent of the national population. That should result in a credit of close to $100 million; instead, it’s closer to $4 million.

This lack of utilization of solar energy, along with several other factors, resulted in Arkansas receiving a failing grade from Solar Power Rocks, a solar power advocacy and information group, in the area of Renewable Portfolio Standards.

According to Solar Power Rocks, “A Renewables Portfolio Standard (RPS) basically requires utilities in the state to source a percentage of energy from renewable sources by a given date. A strong RPS is important because it forces utility companies to promote conversion to renewable energy. That generally means free money for you in the form of solar power rebates and performance payments when you switch to solar.”

Solar energy is often seen as an investment. The panels themselves can be expensive and the operating systems linked to homes or business that tap into the local grid, equally so. Homeowners are often not willing to make that kind of investment, especially not when natural gas is cheaper and more straight forward.

To combat this, lawyers around the state are working towards adjusting the current laws in Arkansas surrounding net-metering in an effort to improve the economic outlook for the state. Pulaski County, along with other entities, have formally asked the Arkansas Public Service Commission to make a ruling on the parameters of net-metering in Arkansas.

Former Lieutenant Governor Bill Halter is part of the Scenic Hill Solar team pushing for the PSC to clear up any questions that linger on the current net-metering rulings.

“The language in the law is very clear when it says that the PSC is the body that can make adjustments under certain circumstances. Improving the economic outlook for the state is one of those circumstances,” Halter said.

The main worries circle around three central factors: Can third-parties and leasers benefit from net-metering? What is the cap on the amount that an owner of a system can net-meter?  Is aggregated metering going to be allowed?

The law currently prohibits government agencies to act as a third-party with private citizens and businesses in order to get benefits from the 30 percent federal tax credit that President Obama pushed that will carry through 2020.

According to DSIRE, residential metering is capped at 25kW or 100 percent of the customer’s highest monthly usage in the last twelve years. Commercial owners have a 300 kW cap. Meter aggregation is currently allowed in the state. Meter aggregation allows a single, centralized solar panel system to service multiple meters and service points, making solar an even better investment for agricultural producers. This was made possible through SB 594 and was approved by the Public Utility Commission (PUC) of the state of California, going into effect in February, 2014.

Though any ruling by the PSC on the current laws surrounding net-metering in Arkansas is months away, many hope that this decision will allow Arkansas to catch up to the rest of the country on solar.

About the author

Joe Kramer

Joe Kramer

Joe Kramer is a former reporter for AMP. Joe has written for the Log Cabin Democrat in Conway and served as editor for The Echo newspaper at the University of Central Arkansas.

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