Innovative Contracts Unlock New Solar plus Storage Opportunities

The growth of combined solar plus energy storage projects has been a major factor in the industry over the past year. The market has seen the announcement and development of dozens of large projects, many in the southwest US, with most owned or financed through agreements with large investor-owned utility companies. However, innovations in project business models and contract structures are allowing smaller projects to flourish in new regions. The state of Arkansas rarely comes to mind for most people thinking about renewable energy developments, yet a new project in the state is providing a blueprint for innovation at local levels. 

Local Farms Join Forces

The new project is being built by solar developer Today’s Power, Inc. (TPI) on approximately 15 acres of land near Jonesboro, Arkansas. Two separate systems jointly located at the project site total 2 MW of solar PV generation and use both fixed-tilt and single-axis tracking along with a 6 MW battery energy storage system (ESS). While the technology used in this project is mostly standard, the innovative ownership and contracting structures are not, bringing together the local utility cooperative, solar project developer, and two large local farms. 

The project includes two asset owners and two offtakers for the solar generation and battery ESS services. Delta Farms is set to purchase and own 1.2 MW of solar capacity in a fixed-tilt array. Another local farm, Southland Gin, is leasing the output of an 882 kW single-axis tracking array through a power purchase agreement from the project developer and owner TPI. Finally, local utility Craighead Electric is operating the battery ESS to reduce its peak demand and lower costs associated with wholesale electricity purchases and transmission network charges. 

Collaborative Development Is Key

Delta Farms and Southland Gin separately explored opportunities to develop solar on their properties. However, combining assets in a joint property allows for a larger project to be built at lower costs per unit of generation that offsets more of their energy consumption. The addition of the battery ESSs reduces any potential negative effects such as voltage and stability disruptions on the rural grid, allowing Craighead Electric to reduce peak demand charges. This innovative model allows multiple stakeholders to benefit from the development of new renewable generation with minimal disruption to the grid or other ratepayers. 

As solar generation continues to become cost-competitive with conventional resources throughout the US, this type of project can provide a blueprint for other communities. It has become unfortunately common for large energy customers to have contentious relationships with their local utilities when working to add large solar systems that must be interconnected and managed by the grid. This project in Arkansas shows that upfront collaboration along with the integration of energy storage can resolve many of the issues that arise from new solar development while benefiting all parties.