Alaska Gov. Dunleavy signs measure into law boosting community solar projects

Gov. Mike Dunleavy signed a measure into law on Tuesday intended to boost renewable energy production, particularly in Southcentral Alaska.

Senate Bill 152 passed the Legislature in May with broad support. The new law creates a streamlined framework for community solar projects, which typically involve people purchasing power from a central solar farm on a subscription model to reduce their electricity bills.

Supporters say community solar helps people who cannot otherwise access renewables. Solar panels may be unavailable for condominium owners or renters, and buildings may be in shady locations. The National Renewable Energy Laboratory estimates that 50% of U.S. households and businesses are unable to install solar arrays.

According to the U.S. Environmental Protection Agency, at least 24 states have enacted measures to establish community solar projects. SB 152 goes further, including other renewable sources of power like wind and hydroelectric projects.

Dunleavy signed the bill at the site of a planned community solar project in South Anchorage. Chugach Electric Association, the state’s largest utility, is set to start operating the 500-kilowatt community solar project in 2025, officials said.

Alongside Dunleavy at the signing ceremony was Anchorage Democratic Sen. Bill Wielechowski, the measure’s lead sponsor, and Arthur Miller, CEO of Chugach Electric. In an interview, Miller said the utility is “very excited” by the new law as it removes impediments to advance clean energy.

”In its simplest form, it allows businesses and households to benefit from renewable power if they can’t install renewable power at their location,” Miller said.

Officials at Chugach Electric say they have heard interest from members in their community solar project, and in subscription-based renewable power.

Described as a “pilot project,” Chugach Electric could expand its small solar farm if the project proves successful, Miller said. Community solar projects could help the utility meet its goals to reduce its carbon emissions 35% from 2012 levels by 2030, and at least 50% by 2040, he added.

The Regulatory Commission of Alaska — the governor-appointed body charged with regulating the state’s utilities — is tasked under the new law with writing regulations for community solar projects within a year.

Community solar projects have steadily expanded across the U.S. in recent years. They are expected to continue growing annually by 8% per year through 2028, according to energy consulting firm Wood Mackenzie.

“I think you’re going to see a lot of people take advantage of this, particularly with the federal funds that are available,” Wielechowski said.

As part of its national $7 billion Solar for All program, the EPA awarded $125 million in April to the Alaska Energy Authority, the Alaska Housing Finance Corp. and Tanana Chiefs Conference to build solar farms and battery storage sites across Alaska.

Renewable energy organizations have reported a sharp uptick of interest in solar panels in Alaska, partly because of a 30% tax credit offered by the federal government for solar panel installation.

Facing the prospect of a natural gas shortage in Cook Inlet, the Legislature passed several measures this year intended to boost renewable energy in Southcentral Alaska. Dunleavy signed one measure into law last month to establish a fund within the Alaska Housing Finance Corp. to finance clean energy projects. He signed another bill to exempt new large-scale renewable projects on the Railbelt from local property and sales taxes.