A transition in Arkansas’s economy is underfoot. As residents change the way they receive goods and services, particularly in rural communities, businesses have been faced with a difficult choice: adapt or slowly disappear. No sector has experienced this rapid consumer shift more than our state’s energy industry.
Over the last decade, Arkansas residents and businesses alike have made the switch from traditional utility arrangements to more innovative technologies like solar. And with the recent legislative changes at our state Capitol, many city and county governments are choosing to hop on board with this power shift.
Take the recent Arkansas Resource Conservation and Development (ARC&D) Annual Conference in Hot Springs as an example. Last week, government officials and grassroots organizations from across the state discussed how to “work together for a better future.” Topics included disaster recovery, infrastructure upgrades and, due to members’ growing interest, guidance on how to leverage alternate energy resources to the benefit of their communities and local economies.
Specifically, local leaders focused on energy performance contracting, an initiative made possible by legislation passed by the Arkansas General Assembly in 2013 and 2015. This alternative procurement vehicle allows entities like city and county governments to pay for energy improvements at their properties — from lighting upgrades to high-efficiency plumbing — over a set term using savings, or revenue, generated from their investments. No upfront capital is needed for the projects or system modifications because each comes with a set cost, guaranteed savings and, ultimately, guaranteed performance.
As an extra impetus, many government projects can now also benefit from the Solar Access Act. Passed by the legislature this spring on a bipartisan vote, this bill allows for third-party purchasing and leasing of solar arrays by non-taxable entities. It more than triples the maximum solar size limits — from 300 to 1,000 kilowatts — and adds a grandfathering provision to provide market certainty and protect solar adopters from future rate structure changes.
But that’s not the only change on the horizon for city or county-funded projects. Across the state, government leaders are contemplating the use of power-purchase agreements. These allow developers to design, permit, finance and install solar energy at little to no cost to the government entity. And, unlike current utility purchase agreements, developers are then able to sell the power generated to consumers at a fixed rate lower than the local retail rate.
Whether cities or counties choose to take advantage of third-party purchasing and leasing or power-purchase agreements, the consensus at the Annual ARC&D meeting was clear. City and county governments now have the opportunity to embrace Arkansas’s ever-changing energy landscape. By doing so, these public entities not only can be good stewards of taxpayer dollars, but they can invest in projects that will bring long-term economic dividends to their communities.
Editor’s note: Josh Davenport and Heather Nelson are the co-founders of Seal Solar, a solar energy solutions firm that serves homeowners, businesses, government entities and farmers. The opinions expressed are those of the authors.