Solar systems help growers cut electric bills while raising their environmental stature.
• By Vicky Boyd,
Chris Isbell, a partner in a family-owned farming operation near Humnoke, Arkansas, looks at his 300-kilowatt solar-generation system as just another crop.
“Essentially, we’re farming the sun anyway,” he says. “Any crop you raise is just a power plant for the sun. It’s interesting to me that as we grow the crop, the energy from them is turned into food and energy for animals or humans or it’s fuel for fire. We’re just taking what God has given us and turning it into a different form of energy.”
Isbell isn’t the only Delta farmer who has started cultivating solar energy as a way to reduce electric bills.
Doug Hutchings, CEO of Little Rock, Arkansas-based Delta SunEnergy, says he receives requests from growers almost daily to examine their energy bills and determine whether solar may offer an economic benefit.
A sunny outlook
Arkansas is well suited for solar, Hutchings says, ranking 11th in the nation for solar insolation – the amount of average daily solar radiation that strikes the state.
He credits much of the recent interest to the Arkansas Public Service Commission adopting public policies that enable on-site solar generation coupled with favorable economics. Among those is the state’s net metering policy, which provides 1-for-1 credits for generators.
Net metering can be viewed as a kind of electric bank account. For every kilowatt hour generated and fed into the power grid, solar system owners receive a 1 kWh credit in their account. Each credit will offset 1 kWh of use.
Unused credits carry over for two years, after which time the utility will pay the generator a much-discounted rate for anything left over. As a result, most solar systems are sized to generate slightly less electricity than will be used during the year.
Meter aggregation also has made solar systems attractive to agriculture, Hutchings says. This allows an operation with grain bins, pumps and other electric-powered machinery in several locations but in the same service area to combine their electric use and have it offset by a single solar system.
In the case of Isbell, he can put his meters in order by their return-on-investment and have the credits from his generation applied to them to maximize the value.
Determine if solar is a fit
A.J. Hood, who has a 200-kW system near Tillar, Arkansas, recommends any producer interested in solar first collect their electric bills and have a solar provider, such as Delta SunEnergy, conduct an economic analysis. Then they can present the results to their accountant to see if it makes financial sense based on their tax and other financial situations.
Hood did just that and received a call back from his accountant in a matter of hours. “When your accountant is standing behind you, you need to do this,” he says.
As Hutchings points out, a solar system may not be for everybody and depends on their electric use and rate schedule. The minimum size that provides an economic advantage is typically about 100 kW, which will generate about $15,000 in annual electricity savings, he says.
Delta SunEnergy also evaluates the distance to the closest interconnection, since these systems feed into the electrical grid.
Hood was approached in early 2018 by the principals who formed Delta SunEnergy about possibly installing solar. After his accountant gave him the thumbs up, the system was installed and began generating power in May 2018.
The 624 solar panels, visible to passersby on Highway 165, essentially offset about 75 percent of the electricity needed to dry rice in the six adjacent 30,000-bushel grain-storage bins.
“It takes a lot to dry rice down, so we typically burn a lot of electrically in that one location,” Hood says. The solar system is expected to reduce his energy bills by about $30,000 annually.
Through 2019, people who install solar receive a 30 percent tax credit, Hutchings says. The amount will step down in subsequent years. In addition, the U.S. Department of Agriculture offers Rural Energy for America grants that pay up to 25 percent of a renewable energy system’s cost.
Hood took advantage of both, which reduced payback for his $300,000 system to roughly four years from six without them. The system performed so well that he expanded it by 33 percent to the current 200kW size. Delta SunEnergy even handled a lot of the paperwork for his USDA grant proposal.
“It really cut down on my (payback) time — it’s one of the things to think about when making your decision,” he says.
In addition, some producers may take advantage of accelerated depreciation, depending on their tax status, Hutchings says.
Even after his panels have paid for themselves, Hood will continue to receive bills from his energy provider, Entergy Arkansas, for standby charges. But they will be miniscule compared to what his bills once were.
Hutchings says Delta SunEnergy chooses from among a handful of solar panel suppliers based on their generation efficiency and anticipated lifetime performance. The systems have a 25-year warranty.
Production decreases slightly during that period and is typically about 82 percent of what it was on the first day of operations.
Dipping a toe in the solar pool
Isbell’s system, which was also installed by Delta SunEnergy, came online more than four months ago. Although it hasn’t generated for a complete year yet, he says he was happy with how it has performed so far.
“It’s done really well for the weather we’ve been having — it’s been so rainy and cloudy,” he says.
The 300 kW of panels produce slightly less than one-third of the electricity used across all the family’s acreage, reducing their bill by about $45,000 annually.
In addition to reducing Isbell’s electric bill from First Electric Cooperative of Jacksonville, the tax credit also was a selling feature.
“It comes right off the top, and we can take the money and put it back into the system and get it paid off as quickly as we can,” he says.
Because the technology was so new to the state, Isbell says, he wanted to dip his toe into it before getting wet. Seeing how it has performed, Isbell says he’d now consider installing more.
The 140 acres that host his array was not good rice ground and had not been cropped for years. With the panels taking up only about 1 acre, Isbell says he has plenty of room to expand.
Both Hood and Isbell monitor their systems using a smartphone app, which shows real-time generation.
Hood says he’s also been surprised at how much electricity he has generated this winter, even though it has been cloudy and rainy much of the time.
In fact, high summer temperatures can actually decrease the panels’ efficiency slightly, Hutchings says.
“My results were pretty fascinating during the summer, but during the winter I was just shocked,” Hood says. “Even on a day when it’s been cloudy, any time the sun peaks out, we see that spike (in generation).”
Displaying ‘the good that farmers do’
Eight rows of solar panels occupy about 1 acre adjacent to Hood’s grain bins. Although he could have had them installed closer together, he wanted enough space between them so his crew could mow and keep the system presentable.
It’s high visibility on Highway 165 also offers a chance to educate the public about farmers’ commitment to the environment.
“To the general public, the farmer is the enemy,” Hood says. “They don’t realize the conservation practices put in place. This helps the general public see the good that farmers do. It’s something to be proud of.”
Isbell agrees: “It plays into what we’re already doing with the sustainability and carbon credits.”
He was referring to an effort by his family as well as a handful of other growers who documented their greenhouse gas reductions and sold carbon offset credits to Microsoft.