Scenic Hill to Build $10M Municipal Solar Plant in Clarksville

by Kyle Massey

Scenic Hill Solar of Little Rock and Clarksville's city-owned utility have partnered to build the largest municipal power source in Arkansas using renewable energy, a $10 million solar project expected to be completed by next summer.

Scenic Hill, which has done recent multimillion-dollar solar projects for L'Oreal in North Little Rock and Kentucky, will pay to build and operate the array for Clarksville Light & Water Co., and the utility will buy the electricity it produces under a 30-year power-purchase agreement. The project is expected to save Clarksville Light consumers $500,000 a year, according to John Lester, the utility's general manager.

The 20,000-module array, covering 42 acres bordered by Main Street and Clark Road, will be the state's third largest solar power plant and will have a capacity of 6.5 megawatts of direct current, 5 megawatts of alternating current.

Lester and Bill Halter, Scenic Hill's CEO, said the project is structured to provide the most benefit to all concerned.

"This is the wonderful thing," Lester told Arkansas Business. "Each party maximizes its benefit. Clarksville Light & Water is buying the property, and as a nonprofit city utility we are exempt from property taxes. Bill's investors are providing the capital to build and operate the plant, and as a for-profit company they can take advantage of federal solar tax incentives that we could not as a nonprofit."

Under the 30-year deal, Clarksville Light will pay 5.8 cents per kilowatt for the electricity, and the array will provide more than 25 percent of Clarksville's residential power. The utility serves about 4,500 customers, including major commercial and industrial clients like Wal-Mart Stores Inc., Tyson Foods Inc. facilities and HanesBrands Inc., which has manufacturing facility in Clarksville.

"What we're doing in Clarksville is more than five times larger than the project at L'Oreal in North Little Rock," Halter said in a telephone interview. "The design process has already begun. Geotechnical analysis is this week, and engineering and design is complete. We expect to be finished by mid-2018, and we will be producing power at that point."

The solar array will be visible from Interstate 40, according to a company news release.

The project is another forward-thinking initiative by Clarksville, a city of about 10,000 that is well ahead of the curve in technological innovation, Lester said.

"Our utility already had a significant amount of renewable energy in our portfolio, and we were already considering solar. The economics are starting to work out on the utility scale, and that's why you're seeing such growth," he said. "Those economics may not have been attractive 10 years ago."

The announcement drew applause from environmentalists, including Glen Hooks, director of the Arkansas chapter of the Sierra Club. "Clean energy production is happening all across our country, and seeing it blossom all over Arkansas is nothing short of exhilarating," Hooks said in a statement. "Constructing projects like this one in Clarksville means cleaner air, better health, smaller utility bills, and good-paying jobs for Arkansans." He said Clarksville joins other Arkansas towns like Camden, Stuttgart, North Little Rock, Benton, Ozark and Bearden in "leading the way."

Clarksville's Lester said he reached out to Scenic Hill and Halter, who was an Arkansas lieutenant governor before founding the solar company, for several reasons.

"We liked that he was Arkansas-based, and he invited us to watch along and experience what was happening at L'Oreal, and that was all positive," he said. "He was also clearly able to address our particular needs very well."

One goal was to boost Clarksville's use of renewable power up to the 50 percent range.

"We already had a significant renewable portfolio, mainly with hydroelectric power," said Lester, noting that CL&W has 19 megawatts of hydro capacity from the Southwestern Power Administration, based in Tulsa, Oklahoma. Most of that hydro power comes from Corps of Engineers lakes and dams in Arkansas.

The solar array is expected to provide 11 million kilowatt hours of power per year, which computes to nearly 10 percent of CL&W's normal peak of 55 megawatts. "All told, if we have good weather conditions, during peak times of day 52 to 53 percent of our energy will be from renewable sources," Lester said.

"We may pay slightly more per kilowatt for the solar power, but since it's ‘behind the meter,' it will shave my peak and lower my capacity and demand charges," Lester said, referring to the cost of meeting demands at times of peak power usage, usually on hot summer days. "The other aspect on costs is that since this power is directly connected to my grid, I won't have transmission charges. Between savings on transmission and peak demand, I'll be saving my customers about a half million dollars a year."

Lester said that the solar project dovetails nicely with a fiber-optic network Clarksville is now installing to offer multi-gigabit speeds. "Combined, the solar and telecommunications projects are creating an infrastructure in Clarksville for the 21st-century economy," Lester said.

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