As the Mall of Louisiana’s thousands of customers traverse its 1.5 million square feet of retail space on any given weekend, something is quietly happening above their heads: Hundreds of solar panels are collecting the sun’s rays and converting them into energy to help keep the lights on and the air conditioning blowing.
At nearly 1.3 megawatts of power, the Baton Rouge mall’s system is among the largest in the state. Solar Alternatives, a New Orleans-based solar firm, completed the installation without fanfare in November. At about the same time, the firm completed a 700-kilowatt project atop Gretna’s Oakwood Center.
In some ways, the projects represent where Louisiana’s solar industry, at least the rooftop side, currently stands. The demand for residential systems dried up almost entirely after a confluence of events — including the death of a state tax break for installations.
Now, commercial rooftops are where the money is, said Solar Alternatives owner Jeff Cantin. While his business once did almost entirely residential rooftops, it is now split 50-50 between businesses and homes.
As the rooftop part of the solar industry limps along, hoping for a lifeline from regulators or lawmakers, the other side of the solar industry — utility-scale power — is looking increasingly like the new frontier.
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New solar frontier
Solar prices have fallen dramatically in recent years, to the point where solar is threatening traditional fuel sources, even in Louisiana where natural gas is king.
In that regard, the mall rooftops don’t even scratch the surface of the potential for solar power in Louisiana. While easily in the top 10 of Louisiana solar projects in terms of megawatts, the Mall of Louisiana project will soon be dwarfed by another 50 times its size: Eagle Solar’s West Baton Rouge plant. If approved by regulators, it will generate 50 megawatts for Entergy Louisiana.
A couple of weeks ago, a 1.1-megawatt solar plant at the University of Louisiana-Lafayette went into service as part of a $4 million solar research center. Experts will study how to best scale the technology — and determine the overall feasibility of megawatt-scale solar plants in the state.
South Alexander Development LLC, a subsidiary of New Orleans-based Joule Energy, has plans for 12 projects throughout the state comprising 29.5 megawatts. Of those 12, six are slated in Calcasieu Parish; two in Tangipahoa; and one each in Livingston, Iberville, St. Martin and St. Landry parishes.
Entergy Louisiana also is in discussions with another developer for another 50-megawatt project.
Others are likely to come soon.
“What we’ve seen over the last several years is a pretty significant decline in the cost to install solar,” Entergy Louisiana President and CEO Phillip May said. “With where they are today, we’ll continue to see more adoption of solar.”
Costs still need to drop, May said, and battery or other storage technology needs to become more viable. Also, regulators at the Public Service Commission still have to approve the deal between Eagle Solar and Entergy. PSC Commissioner Foster Campbell last month promised to scrutinize the deal to make sure ratepayers are getting a good deal.
But the fall in solar costs in recent years has been dramatic. A recent study by the consulting firm Lazard found the levelized cost of solar fell from $359 per megawatt-hour in 2009 to $50 last year, making it $10 cheaper than natural gas.
May declined to provide specific energy costs associated with the West Baton Rouge solar plant but said the utility is “comfortable” with the deal’s effect on rates. He also said it will give a “good feel” for how to pursue more solar projects.
In an effort to further diversify its electricity portfolio, Entergy Louisiana has reached a 20-year deal to purchase solar power from a propo…
Lagging in Louisiana
Louisiana has long lagged behind the rest of the country in the adoption of solar power. While the state consumes more energy per capita than any other, and ranks fourth in the country for total consumption, the vast majority of that comes from natural gas.
According to the Energy Information Administration, Louisiana ranked 45th in the country in renewable energy consumption as a share of the state’s energy mix.
While northwest Louisiana was set to get power from the largest wind farm in the country — the $4.5 billion Wind Catcher project in Oklahoma — that project was scrapped Friday after regulators rejected it in Texas. It had gained approval from Louisiana regulators.
Part of the reason Louisiana has not embraced renewables is the abundance of natural gas in the state. As May notes, the state is home to the Henry Hub, in Erath, the place where gas is benchmarked for trading in the U.S. It is plentiful, and it is relatively cheap. Natural gas is cleaner-burning than coal, which has made Entergy’s portfolio cleaner than most, May said.
But solar advocates also say the state’s regulators and utilities have been slow to adopt policies that would make solar more attractive. In New Orleans, a fierce battle has played out over whether Entergy New Orleans should build a new gas-fired plant or embrace more renewables like solar.
While most other states have Renewable Portfolio Standards — programs that set goals for the amount of renewable energy sold or generated — the Louisiana Public Service Commission several years ago opted not to adopt such a program.
Instead, the PSC laid out a Renewable Energy Pilot Program to get utilities to test the renewable waters. The 29.5-megawatt project from South Alexander Development sprang up out of this pilot program. Entergy then issued a request for proposals, which drew dozens of responses from renewable energy developers, most of them solar, and which culminated in the deal with Eagle Solar.
Solar Alternatives owner Cantin, who also serves as head of the Gulf States Renewable Energy Industry Association, said the program didn’t go far enough. He chided what he calls a lack of “interest and willingness” from utilities and regulators to more thoroughly embrace renewables.
“It sounds like there’s projects in the pipeline, but we’ve also heard that for many years,” he said. “I think you have to have friendly utilities, friendly regulators. You don’t need big incentive programs. The technology pays for itself pretty well at this point.”
The utilities regulated by the PSC are currently crafting their Integrated Resource Plans, which serve as long-term road maps for what types of power generation they’re going to build, among other things.
Simon Mahan, director of the Southern Renewable Energy Association, spends much of his time advocating for renewables to be a greater part of those plans. He pointed out that Entergy Corp. CEO Leo Denault said in a letter to shareholders in April that the utility giant was evaluating 1,000 megawatts of renewable energy resources.
“That’s a really big deal,” he said. “But those numbers aren’t showing up in the IRP process here in Louisiana.”
One reason is what Mahan calls problems with the modeling software and economic assumptions used to run analyses.
Still, he thinks the solar projects are going to happen. There are indications they will.
Twenty-nine proposed power plant projects are in the “queue” run by MISO, which operates the grid system in Louisiana. Of those, 24 are solar projects, accounting for 2,682 megawatts of power. Not all will happen, but Mahan said it is a good indication of the interest solar is attracting.
Cleco Corp., the Pineville-based utility, said it is in active discussions with solar developers and has 3,500 customers who have installed residential systems. The utility’s Integrated Resource Plan will include grid-scale solar, said spokeswoman Jennifer Cahill.
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Residential to business
While utility-scale projects are poised for a breakout, the other side of the industry — distributed generation, or primarily rooftop installations — is languishing.
At its peak, when the state was still doling out a generous tax credit for solar installations, Cantin estimates there were more than 4,000 solar-related jobs, and dozens, if not hundreds, of active companies.
Now, there are maybe a dozen firms operating in the state, and perhaps 500 jobs, he said.
A few of the surviving companies have shifted their focus to commercial rooftops, but most have shut down or gotten out of the solar business entirely.
Richard Carroll installed his first solar system in 2007 on his own home in Zachary after losing power for extended periods of time during hurricanes Katrina and Gustav. Shortly thereafter, he installed one for his brother; then his neighbor.
The state instituted its tax credit in 2008. By 2012, Carroll’s Structure Green Solar was doing a steady two installations a week. During the busy season, he had one or two a day.
Now, he does two a year, if that.
“It’s definitely been a difficult, difficult market,” Carroll said. “It’s tough to hang in there.”
Carroll and several others in the industry tell a similar story: Lawmakers began allowing solar leasing, which the critics say gave rise to bad operators who cheated customers and put a stain on the industry. Then the Legislature capped the program retroactively, leaving homeowners who had bought solar systems out in the cold.
There’s also the net metering debate, which boils down to how much utilities should pay residents for their excess solar power.
The residential side of the industry is less financially lucrative than the utility-scale projects, largely because of the rate structure. The state tax credit program offered 38 percent credit on the first $20,000 to install a residential solar system, and it could be coupled with a similar federal tax program to cut down costs.
By the time the state began making homeowners whole again, it was too late.
Now, Cantin said he’s been able to find enough business from companies looking to install solar systems on their roofs or carports to continue his business. But many other companies weren’t so lucky.
“We had something like 4,000 solar and related jobs at the peak of the market,” he said. “I believe the state could have preserved quite a lot of those.”
Entergy New Orleans pulled about $1 million from a repair fund for power lines and poles five years ago, and New Orleanians have had frequent …
Researching solar feasibility
On a 6-acre patch of land in Lafayette, off Eraste Landry Road, is a 1-megawatt solar plant that provides 3 percent of the University of Louisiana-Lafayette’s power on an annual basis.
The 4,500-panel plant is part of the $4 million PART Lab at the university, run by Terrence Chambers. Besides its role as a power generator for the school, Chambers said the facility will serve as an important applied testing lab for the industry. It was funded by an investment from Louisiana Generating LLC, a subsidiary of NRG.
“We hope to serve as a resource to the community to provide accurate information about what type of solar technologies work in Louisiana,” Chambers said.
Wind and solar are intermittent sources of energy, he noted, which is why utilities need a mix of different types of generation. But there are ways to get around that, he said, such as combining wind, which works better at night, and solar, which works better during the day, to create a more stable source of energy.
Over the next decade, Chambers expects a huge adoption of renewable energy, but not because of the state’s public policies. Rather, the adoption of solar will come precisely because it makes financial sense.
“If you’re building a new power plant, for new capacity, it’s cheaper to put in solar than even a natural gas plant,” he said. “Ultimately, these decisions are driven by economics.”
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