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story.lead_photo.caption Information about Major solar projects in Arkansas

RUSSELLVILLE -- In the shadow of factories and white plumes of air from the Nuclear One power plant, 30 solar panels sit atop Joshua's Fine Jewelry in downtown Russellville.

Chris George is finally living out an 18-year-old dream. The owner of Joshua's Fine Jewelry wanted to power the store on renewable energy, but for 18 years it didn't make sense.

"It was just too expensive. I was just never going to pay it off," said George, 57, whose ambition was to make his store "as green as we could be."

Solar panels were manufactured by far fewer entities in 1999 and materials were more expensive, so installing the panels simply wasn't economical.

By 2015, things had changed. Solar prices had gone way down, many energy experts said, and installations went way up. It also was about the time utilities in Arkansas began installing or announcing plans for large-scale solar projects.

With declining prices in solar, wind and natural gas, the nation's electricity sector is changing.

Since 2015, utilities have announced six solar projects built in Arkansas, the first ever for the state. The projects aren't just taking off for utilities, either. It's happening on a much smaller scale, too, with Arkansas homeowners and business owners installing solar panels.

So earlier this year, George took another look at solar, figuring out the cost of installation and the potential savings. He'd have to pay about $16,000 -- after a $7,700 federal solar tax credit -- and the panels would save him a few hundred dollars right off the bat. He'd have to pay off the panels on which he would nearly break even for the first few years, but once they were paid off he'd get to keep the savings.

George did the same thing for his home, estimating that after five to six years he'd be left with no electricity payments at all, and came to a conclusion

"Anybody that doesn't do this is foolish."

OUTPACING COAL

President Donald Trump's administration has sought to remove regulations affecting coal production and power, announcing earlier this month that the administration would end the Clean Power Plan, which required states to reduce carbon dioxide emissions and targeted coal plants in the process.

Even with the administration's decision, the costs of natural gas and non-hydropower renewable energies have sunk and their consumption has risen. Accordingly, utilities are using less coal power.

Natural gas has always been a competitor with coal but now has outpaced coal consumption and production in the U.S., according to the U.S. Energy Information Administration's 2017 Energy Outlook, to become the greatest producer of energy at just more than 27 quadrillion British thermal units produced in 2016.

The Energy Information Administration forecasts wind and solar, which produced about 7 quadrillion Btu in 2016, to match coal production and surpass coal in consumption by 2040. Coal produced about 15 quadrillion Btu in 2016 and is projected to produce about 12.5 quadrillion in 2040.

For utility-scale solar, the median price per watt of alternating current dropped from about $6.50 10 years ago to $2.20 in 2016, according to the Utility-Scale Solar 2016 report from Lawrence Berkeley National Laboratory. The report defines a utility-scale project as being 5 megawatts or greater.

Operation and maintenance costs have decreased from $19.30 per megawatt hour in 2011 to $8.20, and the megawatts of added utility-scale solar generation in 2016 (10,636 megawatts) were more than twice what they were in 2015 (4,149 megawatts).

The number of smaller solar installations at homes and businesses has grown by hundreds of thousands each year since 2013, according to the Berkeley lab's Tracking the Sun 10 report released earlier this year.

For those nonutility projects, the median price of installing solar has fallen two-thirds since 2000 (from $12 per watt of direct current to $4) and the size of the projects has more than doubled since 2000 (from 2.9 kilowatts to 6.2 kilowatts)

Incentives for solar are contributing to installation of it, experts said.

Some states offer tax incentives for installing renewable energy. Arkansas doesn't, but the federal government offers a 30 percent tax credit for solar, which effectively knocks off 30 percent of a project's cost. The amount of the tax credit is scheduled to decrease in the coming years.

Renewable energy also has come from states that have standards and goals for the amount or proportion of electricity generated in the state by renewables. Arkansas does not have a standard for either, but neighboring Texas and Missouri do.

Seeing an opportunity, more businesses have opened or expanded to include solar, which has helped drive costs down further.

Fewer companies manufactured panels before, said Seal Energy Solutions co-founder Josh Davenport, but manufacturing of solar and wind technology has risen domestically -- including in Arkansas -- so parts don't need to be shipped as far.

Employment in solar power also has changed. The industry employs more people in the U.S. than fossil fuels, nuclear and wind combined, according to the U.S. Department of Energy. Solar employs 373,807 people, according to the department's 2017 U.S. Energy and Jobs Report. Wind employs 101,738 people, nuclear employs 68,176 and fossil fuels (coal, natural gas, oil/petroleum and advanced gas) employ 187,117.

RENEWABLES ON RISE

Entergy Arkansas, Southwestern Electric Power Co. and the Arkansas Electric Cooperatives all have expressed intentions to increase reliance on solar and wind renewable energy.

The Energy Information Administration projected in its 2017 Annual Energy Outlook that domestic consumption of natural gas and renewables like wind and solar would continue to rise through 2040, while coal would plummet. Other energy sources -- including petroleum, nuclear, hydropower and liquid biofuels -- are not projected to change much.

Utilities have been invested in renewable energy for decades. For years hydropower has helped round out electricity portfolios that included nonrenwables like coal, natural gas and nuclear.

More recently, however, utilities are adding solar, wind and natural-gas projects and neglecting coal and nuclear.

One of the projects is a 3,840-panel, 1-megawatt solar field in Holly Springs. Ouachita Electric Cooperative built the field in Dallas County for $3 million. Once the utility gets its tariff model approved by the Arkansas Public Service Commission, a limited number of panels will be available to residents, said Mark Cayce, general manager of Ouachita Electric Cooperative.

"It will be cheaper than buying from a traditional generator, mainly because we don't have to fuel it. This is a generator where the fuel delivers itself," said Cayce, noting that solar and wind have no fuel costs that would make prices fluctuate.

And when solar arrays can be built close to where they will be used, transmission costs go down compared with traditional power sources, said John Lester, general manager for Clarksville Light and Water Co.

His city-owned utility in Johnson County will build a 5-megawatt operation using about 20,000 solar panels on 42 acres in town to supply about 10 percent of the power for the community of 4,500 people. It'll cost about 5.5 cents per kilowatt compared with 5.3 cents per kilowatt for the rest of the utility's power sources, but it'll be cheaper because of lower transmission costs, Lester said.

After seven years, the utility can choose to purchase the solar array from Scenic Hill Solar, the private company that is building it, for about $7 million. That will bring the cost per kilowatt down to about 3 cents, saving the city more money.

While the low cost of solar has gotten more utilities on board, many utilities and other groups maintain that a diverse electricity portfolio is best for customers.

"In order to protect consumers from price volatility and electric outages, fuel and technology diversity is key," Steve Cousins, executive director of Arkansas Electric Energy Consumers, said in a statement. "Coal-fired generation is central to such a strategy given its attributes of price stability, dependability, and resilience."

Other notable projects have installed large solar arrays on businesses, such as a 12-megawatt facility for Aerojet Rocketdyne in south Arkansas built by Ouachita Electric Cooperative and a 1.2-megawatt array at L'Oreal's manufacturing facility in North Little Rock installed by Scenic Hill Solar.

Beyond utilities, companies like Scenic Hill Solar and North Little Rock's Seal Energy Solutions are busy.

Davenport said his company has grown to 19 people working in its solar division and has done about 70 solar installations this year.

"It's not the same solar environment as it was two years ago," he said.

NET METERING

Solar proponents are keeping an eye on a rule-making process before the Arkansas Public Service Commission that could affect the financial viability of some projects.

The rule-making concerns "net metering," a term used to describe when a home or business with a renewable-energy generating facility connects to a public utility to possibly transfer surplus power into the utility power grid.

For example, people who install solar panels on their homes connect them to a utility's grid so they can use the energy generated at any time instead of only when it is light outside. Utilities then credit the property owner on their bills for the excess power they've produced. If they've used more than they've produced, they would be charged for that electricity.

The commission is accepting input on new net-metering rules, including a proposal related to Act 827 of 2015 that would allow utilities to deduct from their credits to users the cost of connecting them to the electric grid.

The commission is expected to set new rules in the coming months regarding net-metering contracts. It has already decided that it will expand net metering to allow, on a case-by-case basis, facilities with a capacity of 300 kilowatts or above.

Renewable-energy proponents and environmental groups have supported making net metering as easy as possible.

They'd like to see the current rate of credit -- in which utilities pay the market rate of the electricity back to property owners -- stay the same. But industry groups and Arkansas Attorney General Leslie Rutledge have determined that utilities may reimburse only as much as 75 percent of the market rate.

Input from the industry has focused on the size of a user's net-metering facility and whether existing users should be exempt from any new rules.

In response to questions from the Arkansas Democrat-Gazette about its net-metering position, Entergy Arkansas issued a statement saying its proposal "is more appropriate than the retail rate, ensuring that net-metering customers pay rates more accurately reflecting the utility's cost of providing service."

Casey Roberts, a Sierra Club attorney who has been working on the rule-making, said the lower credit can make a big difference for a homeowner who isn't installing solar panels to a larger, more economical scale.

"That could completely remove the financial incentive to go solar," she said.

Utilities have to spend money connecting homeowners and business owners with solar to the electricity grid, but research done by Crossborder Energy for the Sierra Club suggests the costs can be offset by the closeness of solar facilities to existing infrastructure and the consumption of less electricity by property owners, Roberts said.

'A BETTER WORLD'

Chris George said he is "pretty pleased" with the solar panels on his Russellville jewelry store.

They are a way to make a difference that doesn't require much beyond installation, he said.

"We want to leave a better world for our children and grandchildren than what we had," he said.

Nathan George, the son of Chris George who is also a Russellville city councilman, said he's also exploring how to convert the city to more solar power.

In August, the city's electricity costs were about $40,000. Solar panels, Nathan George said, could be a way for the city, much larger than a single store on West Main Street, to save money, too.

SundayMonday on 10/22/2017

Print Headline: As costs go down, sun power rises in state; Utilities adding large solar projects; homeowners, businesses installing panels

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