Photos courtesy of Seal Solar
The sun is rising on the solar industry in Arkansas.
Across Arkansas, as the sun shines down, its rays are striking rooftops and ground arrays, generating renewable energy for homeowners and businesses. Through advancements in technology and legislation, more people have been able to acquire solar power, providing them with a measure of control over their energy usage and payments.
But local leaders say that this is just the dawn of the solar industry in Arkansas, with more to come in 2021.
Seal Solar president Heather Nelson and CEO Josh Davenport have had a front-row seat to the growth of the solar industry throughout the last decade. The North Little Rock-based solar company, which installs “everything from two panels to 20,000-plus panels,” according to Nelson, has been a major player on the business and legislative sides of the push for increased solar usage in the state.
Co-founded by Nelson and Davenport in 2012, Seal Solar (formerly Seal Energy Solutions) has shifted its focus completely to solar in recent years in response to rising demand for the renewable energy.
Starting in 2015, it became increasingly involved in advancing the solar industry at the legislative level, playing a role in the eventual approval of significant energy legislation in 2019. In April 2019, the company sold its heating-and-air and energy-efficiency units to concentrate on solar design and installation.
“It’s been a long five years, and I don’t think there’s any comparison to where the market was in 2015 compared to today. It’s night and day, due to legislation, policy, competitors and the penetration rate that we’ve seen in the last few years,” Nelson said.
Over the last decade, solar energy across the United States has boomed, growing by an average annual rate of 49 percent, according to the Solar Energy Industries Association (SEIA), the leading U.S. solar trade organization. Net metering applications, which allow for individuals to sell excess electricity to utility companies, tell a similar story about the rise of solar power in Arkansas. In 2015-2016, the penetration rate in the state was only 28 percent. In the years since, it has been more than 50 percent year-over-year. For 2016-17, Arkansas had a 56 percent increase, a 52 percent increase in 2017-2018 and a 53 percent increase for 2018-2019.
While Arkansas has been in the middle of the pack among U.S. states in terms of solar adoption, its stock has been rising lately. The SEIA ranked Arkansas 36th for solar in 2019, a ranking that was increased to 33rd in 2020.
Coming into 2020, the solar industry in Arkansas was riding high after a banner 2019. Then the COVID-19 pandemic struck.
Nelson said the early days of the pandemic, with its rising case counts and quarantines, caused confusion and uncertainty throughout her industry and company. Quickly, they realized how the pandemic highlighted the necessity of solar power.
“It was very scary at the beginning of COVID for everybody and certainly our industry,” she said. “It’s been exciting to see not only the industry in Arkansas survive COVID, but also find a way to thrive on some level.
“What we have seen, listening to our customers, is in the midst of COVID, when you have control over nothing in your life, solar is really appealing because now all of the sudden, you’re saying, ‘Here’s one thing I can have control over.’”
Matt Bell, a partner with Little Rock solar firm Entegrity, echoed this sentiment, saying that customers had a “sense of urgency” about adopting solar with the pandemic in full swing.
“The combination of better technology, lower implementation cost, good legislation and favorable financing has made energy efficiency and renewable energy investments a sound choice,” he said.
The pandemic also served as a test case for where the industry is moving toward: batteries and storage.
“I think solar plus storage is answering a very legitimate expense question, but it’s also answering an emotional question — a hole that everybody’s got where everybody feels like their life is out of control,” Nelson said. “What we’re selling is security, and we’re selling control at the end of the day.
“They know that they’re living in their house 24/7, and if a storm goes through, they’re going to have power. And guess what? During the day, those lines are still down, and the battery is backing up with the sun coming down on the roof of their house. If the grid is down for two nights or 14 nights, they’re going to be OK. The only way they’re not OK is if the sun doesn’t come up.”
Arkansas Advanced Energy Association executive director Stephanie Osborne is seeing storage options becoming more mainstream around the country and has seen increased use in Arkansas.
“Honestly, I think the next step is going to be storage and batteries. That’s next for Arkansas. Across the country, that’s the technology that’s going to become more mainstream and more necessary to continue to provide what customers are looking for,” she said.
Today’s Power Inc., a wholly owned subsidiary of the Electric Cooperatives of Arkansas, has already installed battery storage — a technology that TPI president and CEO Michael Henderson calls an “economic game changer” for the company. For Henderson, this battery storage is a way to expand solar’s competitiveness and deliver increased service for customers.
“Today’s Power expects that the momentum created over the past six years will continue and even increase in 2021. An economic game changer for TPI’s service offering is the combined advantage of integrating solar with the dramatic benefit of battery-energy storage and the potential to collect and control every kWh of renewable energy,” he said.
Arkansas solar companies are already staking their ground for growth in 2021.
Bell told Arkansas Money & Politics that 2021 is shaping up to be a “breakout year for solar in Arkansas.” He expects customers to retain that sense of urgency that the pandemic inspired to seek out more efficient and cost-reducing energy alternatives.
Entegrity also is expecting to wrap up construction on its new Northwest Arkansas headquarters in Fayetteville by summer of 2021. Construction has already begun on the Net Zero-certified office, which will have a ground-floor office with 28 multifamily units on the second and third floors.
Today’s Power also has begun moving beyond Arkansas, providing services in Kansas in Oklahoma. In addition to a full slate of Arkansas projects, TPI is developing more than 20 megawatts of solar power projects for the Kansas Cooperative Sun Power Program in 2021 and beyond. Henderson expects the company to develop 14 1-megawatt solar farms in 2021 and another eight in 2022.
Overall, Henderson sees a dramatic growth on the horizon for the whole industry. “We anticipate solar energy doubling in 2021 and again in 2022 as customers try to capture as much of the ITC before dropping to 10 percent for commercial customers and expire for residential customers,” he said.
Seal Solar is in the midst of multiple projects, with more awaiting approval from the Arkansas Public Service Commission. According to Nelson, the company is working on approximately $6 million in projects for Lexicon Steel — providing solar for its Blytheville and Little Rock locations. While the Little Rock project is awaiting approval, the Blytheville project is in the works with the possibility of being completed by the end of December.
Nelson and Davenport are also banking on batteries, as well as the rise of electric vehicles and fully-integrated homes. As certified Tesla installers, they have seen a dramatic rise in Powerwall sales in the last year. In 2019, the company sold three Powerwalls, which are the home batteries that can store solar energy. In 2020, they sold 53 as of November — an 18x increase.
“We’re seeing that increase around EVs and EV chargers. How that plays into residential will be really interesting,” Nelson said. “That fully integrated home — I think that’s where it’s moving to. In some ways, it might be moving a little bit faster.”
Henderson has his eyes on the political arena for 2021, waiting to see the impact that the upcoming state legislative session and presidential transition has on the solar industry.
“Based on trends in other states, we anticipate that there may be legislation at the state level to amend solar net-metering legislation. On a national level, TPI is diligently tracking developments in order to assess if the presidential transition will lead to more incentives to grow renewable energy and to the extent that taxes will increase,” he noted.
Nelson already expects the legislative session will be “lively” in the coming months with new bills and discussions about the future of solar. The 2021 legislative session is the first since the landmark Solar Access Act, passed in 2019. This legislation has been credited with driving solar growth in Arkansas by adding third-party financing options, increasing the solar project cap size from 300 kilowatts to 1 megawatt and establishing a 1:1 full retail credit for net-metering through 2022.
Both Nelson and Davenport agreed that the legislation that emerged from the 2019 session was game changing for the state’s solar industry. Solar leaders hope to build on that progress in the 2021 session.
“All of that tees us up for coming back to the table,” Nelson said. “We fully expect that there’s going to be some push back from the utility side to clarify some things that were in Phase III, and so we are prepared. We are getting the gang back together to see what that could look like.
“I do hope that we have a broader discussion as an industry for things that we need and want for our consumers. We may look at a tax credit for the state in Arkansas. We have a tax credit on the federal level. It would be nice to see a discussion about Arkansans doing something on the state level. It would be great to talk about property tax and how you deal with the property tax issue for solar.”
Davenport has a broader goal of merging the interests of two industries that have traditionally been on opposing sides of the solar issue. He sees the legislative session as an opportunity to bring the solar industry partners and the utilities to the table to find common ground. “I would like to see the divide between the solar side and the utility side mesh. There’s so much synergy by us all working together and embracing this technology. We’re honestly hurting the economic development of the state, and we’re hurting the advancement of the state,” he said.
State legislators are still filing bills to be considered in the upcoming session, and no major bills concerning solar have emerged yet. For Osborne, the focus should be on maintaining the solar industry’s momentum and keeping the industry open and competitive.
“We’re on a good path both for technological advancement and innovation,” she said. “For us, we don’t want to see us take steps back. Why would we move back when things have been so great the last two years? We want to keep moving forward.”
At the federal level, SEIA president and CEO Abigail Ross Hopper has already outlined proposed changes for the coming year —– a “wish list” for the solar industry. In early November, Hopper called upon federal leaders to extend tax credits for solar energy for five years at the original 30 percent rate and to lift tariffs on imported solar panels.
Bell supported the call for the continued tax credits, which he said have been instrumental in growing and subsidizing the solar industry.
“I hope that the federal government extends the Investment Tax Credit for renewable energy investment to either maintain the current level of 26 percent tax credit or better yet, go back to the 30 percent tax credit. The tax credits afforded to traditional fossil fuels have subsidized the industry for years, maintaining a reasonable tax credit for renewables allows for the solar industry to compete and grow to scale, which therefore reduces long term cost,” he said.
A major hurdle that solar industry leaders are planning to tackle in the coming year is the perception of solar energy. For Osborne, there is an outdated assumption that solar energy is unattainable due to cost or other factors that no longer apply.
“There’s still a stigma that solar is just about the environment, and it’s expensive. That’s just simply not the case anymore. Perhaps it was, a decade ago. Solar is incredibly affordable, and the benefit is not just for the environment but also for your own energy efficiency, and for bringing business into the state.
“The solar industry is a bright spot. People are still operating and growing,” Osborne said. “It’s not just an environmental issue. It’s also a market and economic issue.”
While company growth is top of mind for Davenport, he and the Seal Solar team are planning to beat the drum for solar in 2021. Educating consumers, he said, is critical for them to buy into a relatively new energy source.
“It works here, it works in Arkansas. People assume that it only works in California or it only works in Hawaii. It is here in Arkansas, and it not only saves you money but it provides security,” he said. “People have rented their electricity their entire life. You don’t think about it, but that’s all you’re doing. You’re renting your electricity, and now there’s an opportunity to own. And you don’t have to be wealthy to own it.”
These educated consumers will help raise the tide for all parties in 2021, Nelson hopes.
“Our growth is directly tied to how fast and efficiently we can educate. We really are a team of educators at the end of the day. We are trying to educate Arkansans on solar and storage, and our hope is that they have great knowledge about the technology and about what that technology will offer them.
“We hope that they select our firm to design and install, but even more, we hope that we have an educated consumer. It’s much more important that we educate than sell because we believe that if we educate properly, the sales will be there. If we sell and don’t educate, we’re not really building solar nerds. We’re not building advocates,” Nelson said.