Tax incentives play heavy role in Mississippi solar power

By Steve Wilson | Mississippi Watchdog

Entergy is dipping its proverbial toes into the solar power waters with a new experimental project in Mississippi, and the company may raise its rates, as well.

It will seek approval to build the solar facilities and for the rate increase from the Mississippi Public Service Commission, the government agency that regulates utilities, at its next meeting July 8.

Entergy won’t have to go far to buy the solar panels for the project.

The New Orleans-based energy company — it serves 441,000 customers in 45 of Mississippi’s counties — will buy solar panels from Stion, which received a $75 million loan from Mississippi in 2011 to build a solar panel plant in Hattiesburg. The plant added 23 jobs to the 177 already working at its Mississippi solar facility, but that’s still short of the 1,000 promised when the deal was announced.

As for the rate increase, Entergy will earn an additional $49 million in 2015, its general rate case before the PSC in 12 years. Entergy spokeswoman Mara Hartmann said the average 1,000-kilowatt bill will go up $6.28 or 20 cents per day, and much of the new revenue from the increase will go toward capital costs for improved and additional infrastructure. The increase will also be offset by a $5.57 per bill reduction from the fuel charge on customer bills.

Entergy will build three 50-kilowatt solar facilities with possible sites selected in Jackson, Franklin and in either Atalla or Tate counties. Hartmann said the facilities are not designed to pick up slack during peak usage times during the summer, but rather are an effort by the company to discover where solar fits into the company’s energy output.

The company will take advantage of a 3 percent federal tax credit for renewable energy, the Business Energy Investment Tax Credit. The credit is equal to 30 percent of expenditures on any solar generation equipment.

“The solar project is a pilot to determine the actual production levels of solar at various locations in Mississippi,” Hartmann said. “Since this is a pilot project and solar is an intermittent resource, it will not have a meaningful impact in meeting our summer peak.”

Hartmann said the three solar plants will generate about 1.5 megawatts, a drop in the bucket compared to the company’s 3,400-megawatt output during peak time in the summer. A green energy rate from the solar power will also be an option for customers if the new rate structure is approved by the PSC.

Stion released a new solar panel design in February that boasts a 50 percent efficiency improvement over its older products.

Stion is one of two green energy companies with plants in Mississippi that got heavy investments by Khosla Ventures — the venture capital firm owned by former Sun Microsystems founder Vinod Khosla, which invests heavily in green energy. Both Stion and KiOR have received loans from Mississippi.

The other is KiOR, which owns a plant in Columbus that converts wood pulp into cellulosic ethanol for fuel. The plant recently laid off 18 workers and hasn’t operated in six months. The company owes the state more than $69 million on a loan to build the $214 million plant.

Contact Steve Wilson at swilson@watchdog.org

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