Arkansas solar industry officials had expected grandfathering to be extended before it expires on Dec. 12. 31. However, this is unlikely because the state regulator has not submitted a proposal to do so to the Legislature, which could have decided whether to extend it. Without the grandfathering effect, solar companies cannot adequately predict the savings arrays will bring to their customers, officials said.
According to Energy Toolbase, grandfathering allows existing solar customers to maintain their old rates or rules for the life of their arrays. This enables customers to retain the savings they expect to realize with their arrays, even if the utility changes rates and regulations.
“It’s kind of like a mortgage on your house,” executive director Lauren Waldrip said. Arkansas Advanced Energy Association“Grandfather says when you sign that note, your interest or your net metering rate — good, bad or doesn’t matter — doesn’t change halfway through the loan term.”
She said it’s a grandfathered claim that many other states have indefinitely. Through grandfathering, solar customers know the rate they will receive before installing the array. Without it, investors face the challenge of launching new solar projects.
“We’re at an inflection point right now,” Waldrip said. “Do we want to maintain our strength in the industry, which ultimately benefits every taxpayer and pro-free market Arkansasian? That’s what we’re trying to protect and fix right now.”
The Arkansas Public Service Commission (PSC) is expected to propose a rule change to extend the grandfathering system that the Arkansas Legislature could have voted to approve, she said. However, the committee did not submit a report ahead of last week’s council meeting in December, the final meeting of the year. So it looks like grandfathering won’t be extended before December. 31 Deadline.
Jeff Hilton, interim executive director of the Arkansas Public Service Commission, said the commission has yet to issue an order to change the rules to extend grandfathering.
“It’s waiting for orders,” Hilton said. “At some point the committee will issue an order related to the grandfather in this docket. That will happen.”
As rules are changed, they can be sent to the council for review. A committee review won’t happen before the end of the year, he said.
Asked why the rule change allowing extended grandfathering hadn’t been brought up for review by the committee, he said he didn’t know and couldn’t answer because he couldn’t speak for the committee. The digest included 95 file entries of varying lengths, Hilton added. The committee opened a to-do item related to grandfathers on August 8th. Held on the 18th in October. 27 Hear it.
Still, grandfathering may be an issue state lawmakers are discussing in January.
“We’re going to continue to work on it, but it’s critical for our state’s leadership right now,” Waldrip said, noting the group’s ongoing economic impact study. “The economic impact of hundreds of millions of dollars … is now in limbo, waiting for certainty so that they can continue to honor their contracts.
“It’s a simple question,” she added. “It’s good business. It’s good policy. It doesn’t have much to do with renewable energy. It’s logical.
Grandfathering is separate from the 1:1 net metering credit, but Grandfathering ensures that solar customers receive credit for the life of their array, she explained. Like Grandfather, she said net metering is likely to be something the state legislature also considers in January.
However, she said the Public Service Commission could approve projects on a case-by-case basis. Potential solar array customers must submit an application to the commission requesting that their projects be exempted. She noted that some of the problems in the process included bottlenecks caused by a shortage of commission staff and an increase in grandfathering applications.
“You have to pay a lawyer to file the application, which can be as much as $10,000,” she said.
Douglas Hutchings, Co-Founder and Chairman, Little Rock Array Installers Delta Solar, indicating that costs make seeking case grandfathering unfeasible for residential clients and may only be an option for larger projects. The process can also take months to complete.
“I don’t see how you’re going to sell residential solar responsibly after the New Year unless you’re either downsizing it so you’re not putting anything on the grid, or you’re integrating batteries,” he said. “You won’t be able to Covers PSC fees and schedules for residential. Small business is similar. Larger business, where you can budget costs.
“I think for a large part of the industry, you’re going to see any sales activity stop until the issues are resolved,” he added. “It’s hard for customers to understand what their systems will do when the rules can change dramatically.”
He said the committee had recently received multiple grandfathering requests as solar customers worried about meeting deadlines before their arrays were complete. However, the committee is awaiting a decision on the applications, as they will automatically be approved if grandfathering is extended. Still, some customers and installers are concerned that the committee may have to wait until after the legislative session to make a decision on the requests. If lawmakers extend grandfathering, it could take about six months to take effect.
“The bottom line is that within a few weeks, it will be impossible to provide customers with any certainty about the financial performance of solar arrays,” Hutchings said. huge change.
“I’m optimistic that our state legislators understand and see the value in giving Arkansans the option to invest in solar for their homes or businesses,” he added. “Historically, they have enabled strong policies that have served the state well offers many well-documented benefits.”
After January 1, 1:1 net metering will remain in place, Hutchings said. 1. Even if the grandfather does not extend. But regulations in some neighboring states do not provide a 1:1 credit for electricity generated by the array. He noted that array owners in Louisiana get less value from the power the array supplies to the grid than they pay the utility for the electricity.
“Grandfathering means you can keep 1:1 net metering, and the PSC originally picked a date of 2040 in their ruling, noting that it came into force in 2020,” Hutchings said. “It’s effectively a 20-year “grandfather law”
Waldrip said Arkansas leads in terms of planned solar projects compared to other states covered by the regional transmission organization Midcontinent Independent System Operator (MISO). The state is ahead because of its policies and other components such as agricultural land, she said. She questioned why the state didn’t protect what it did so well and foster growth, contributing to significant economic development and employment in rural communities.
“Arkansas has done an excellent job of positioning itself as … not only competitive, but a leader in the field,” she said. “The jeopardy was avoidable.”