Alaska groups awarded $125M for solar projects as state Senate OKs legislation aimed at boosting renewable energy

JUNEAU — Several Alaska organizations are set to share in $125 million in federal funding for solar projects for low-income and disadvantaged communities.

As part of a national $7 billion Solar for All program, the U.S. Environmental Protection Agency announced on Monday that $62.5 million would be awarded to the Alaska Energy Authority and the Alaska Housing Finance Corp. Another $62.5 million was awarded to Tanana Chiefs Conference, and other groups, for solar projects for tribes.

The federal Solar for All program funds “community energy” projects. Those projects typically involve a group of people — such as residents of an apartment block — who invest in a solar project and get credits off their power bills by delivering power to the electric grid.

The Alaska Housing Finance Corp. will fund solar for low-income households while the Alaska Energy Authority will be focused on funding community solar projects. Curtis Thayer, executive director of AEA, said a bulk of the projects would likely be in rural Alaska in communities that are dependent on diesel-fueled power.

“This is not going to replace diesel. Hopefully what this will do with solar is reduce the need for diesel,” he said.

Tanana Chiefs Conference is planning to use the $62.5 million to invest in solar projects in 13 tribal communities along the Railbelt, including in Nenana and Chickaloon, said Edward Dellamary, rural energy manager for the tribal consortium. The funding was less than Tanana Chiefs had expected, so the scope of the investment is still being finalized, he said.

Dellamary said he was confident the federal funding would be a “pivotal” movement for tribal members. Some of the funding would also go to investing in residential solar, he added.

In February, another $125 million in funding was awarded to Tanana Chiefs to help fund solar and hydroelectric projects in 20 villages across rural Alaska.

The federal investment in renewables comes as state legislators grapple with how to address a looming shortfall of Cook Inlet natural gas, which threatens to see power and heating bills skyrocket. Measures have been introduced to lower royalties to incentivize new gas production in the Inlet; other bills are intended to boost renewables.

The Solar for All program could help fund community projects enacted through a bill the Alaska Senate advanced to the House on Monday. Senate Bill 152 is intended to create a streamlined framework to establish community energy projects in Alaska.

“In the Railbelt, where we are running low on natural gas, it will help us prolong the natural gas that we have by using renewable energy,” said Anchorage Democratic Sen. Bill Wielechowski, the measure’s lead sponsor, on the Senate floor Monday.

Wielechowski said the bill was originally drafted to just include solar power, but it was broadened to include other renewables like hydroelectric or wind power.

Twenty-four states have enacted legislation to establish community solar projects, according to the EPA. Supporters say those projects can fill important gaps. The National Renewable Energy Laboratory estimates that 50% of U.S. households and businesses are unable to install solar arrays. Buildings may be in shady locations, and solar can be unavailable for renters.

Senate Bill 152 passed the Senate unanimously Monday. It now heads to the House, where a companion bill was heard in the House Energy Committee on Tuesday. The measure could apply to small-scale solar arrays, but it could also apply to larger-scale renewable energy projects.

Chugach Electric Association — Alaska’s largest electric utility — filed a plan with regulators in January to create a 500-kilowatt community solar project in Anchorage. Ratepayers would subscribe and pay the costs to build and maintain the panels, and reduce their bills from the power the solar farm produced.

The investment and interest in renewables comes as the National Renewable Energy Laboratory released a report earlier in the year that found if Railbelt utilities produced 80% of their power from renewable sources by 2040, ratepayers could save well over $1 billion.

The Renewable Energy Alaska Project, or REAP, estimates that Anchorage could generate 5% of its power needs if solar panels were installed on 30% of the city’s south-facing homes and buildings.

Chris Rose, executive director of REAP, said there has been a sharp uptick in interest for solar power in Alaska, partly because of a 30% tax credit offered by the federal government. In an interview Monday, he spoke in support of SB 152, and said there needed to be a multipronged approach to boost the adoption of renewables in Alaska.

“Anything we can do to incentivize people to use a local resource like that is helping us to stave off this natural gas crisis,” Rose said.