Low-income communities priority for Arkansas’ $93.6 million federal solar grant

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A partnership between an Arkansas renewable energy nonprofit and a multi-state organization that helps economically disadvantaged communities will use nearly $94 million in federal funds to help low-income families acquire solar power.

Arkansas was one of many states chosen to receive the federal funds from the Environmental Protection Agency’s $7 billion Solar for All program, announced last month. The funds became available through the Biden administration’s Inflation Reduction Act. 

The implementation of Arkansas’ funds will depend on a partnership between the Arkansas Advanced Energy Foundation of Little Rock (AAEF) and Hope Enterprise Corporation, an organization that aims to improve economically strained regions in Alabama, Arkansas, Louisiana, Mississippi and Tennessee.

“Just like [other funds] available through the Inflation Reduction Act, our taxpayers … had already paid this money; it was already on the table,” said Lauren Waldrip, executive director at AAEF. “It was either coming back here or going to another state, and so we wanted to compete to bring that back to Arkansas.”

The partnership is expected to implement two strategies targeting low-income families, according to the EPA announcement. While details are still being ironed out, the first is expected to focus on rooftop solar panels for single-family homes, and the second will center around multifamily buildings.

Waldrip said AAEF is working closely with Hope leadership to determine a plan, and ultimately, the funds will propel both economic growth and generated power in the state.

Arkansas was also listed in two multi-state solar programs set to receive federal funding. Along with 18 other states, Arkansas is expected to reap the benefits from a Texas-led partnership that will “deploy technical assistance, private capital, and grants to minority serving institutions,” according to the EPA. The project is slated for $156 million.

The other multi-state program is led by Groundswell, a Washington, D.C.-based solar nonprofit. Its $156 million project will launch and implement the Southeast Rural Power: SFA Program, which is expected to further aid low-income residents with an entrepreneurial focus for new developers and installers in the solar market, according to the announcement.

Bill Bynum, CEO of Hope Enterprise Corporation, was not available for an interview.

Using solar in the Natural State

The solar industry in Arkansas is growing, Waldrip said.

Last year, Pulaski County flipped the switch on its latest 40-acre solar complex at the Port of Little Rock. In combination with a separate array near the county jail, officials expect 90% of the county’s governmental buildings to be powered by renewable energy. 

The city of Little Rock is currently working to secure a solar array of its own. City officials approved a $12 million financial plan in April, and they’re now scouting out potential locations with help from Entergy Arkansas. Once operational, the city’s array should power about 70% of its electricity needs in government buildings.

Households or businesses with solar panels atop their buildings likely participate in what’s called net metering, a process by which an electric utility company credits customers for generating an excess of solar energy. For example, if one month is particularly sunny and the solar panels collect more power than the customer uses, the utility will use the extra energy for the larger electrical grid. In return, the customer receives credits for a discounted bill.

The Public Service Commission monitors this exchange.

The Legislature in 2023 changed the net metering ratio from 1:1 to a two-channel billing approach where the renewable energy is instantaneously available on the grid and can power other customers’ houses for a different price. Customers have until Sept. 30 to receive the 1:1 ratio.

Come Oct. 1, Waldrip said, the value of solar energy will change.

“Solar power is produced during the hottest time of the day when energy is at a peak demand,” Waldrip said. “Net metering customers provide that benefit to the grid by helping to shave peak demand and associated expenses for utilities. So I’m afraid the new law will result in utilities’ overbuilt energy generation systems on the backs of Arkansans, instead of a more collaborative approach.”

The change in the industry will also force AAEF and Hope to be creative in how to use the federal funds, Waldrip said.

In contrast, the net metering change is beneficial for utilities. 

Heather Kendrick, a spokesperson for Entergy Arkansas, provided a positive statement about the grant funds last week.

In the statement, Kendrick also referenced the recent net metering change and referred to the 1:1 ratio as “unfair.” She said the Legislature’s change would “ensure that net metering customers contribute toward their fair share of the cost of the electric utility system that is used to provide service to them.”

Entergy operates several solar complexes in Arkansas, including what’s expected to be the largest in the state in Mississippi County once it’s operational later this year.

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