Interest is hot in developing solar power in Montana

Interest in developing solar power is soaring in Montana.

Developers are leasing land from Missoula to Great Falls to Hardin with plans to install photovoltaic panels to generate electricity to sell to public utilities.

“There’s a lot of prospecting in our area for sure,” said Susan Conell, Cascade County planning director.

At least six different companies from North Carolina, South Carolina, California and Virginia have called the county inquiring about the county’s solar regulations, Conell said.

One company has preliminary plans to build solar farms at three 30- to 40-acre locations in the county, she said.

These aren’t roof-top projects but rather proposed solar panels 5 to 7 feet off the ground on land surrounded by gates.

NorthWestern Energy, the largest public utility in Montana, has signed five 25-year power purchase contracts with Cypress Creek Renewables of Santa Monica, Calif., for 14 megawatts of solar power from separate farms outside of Missoula, Helena, Townsend, Hardin and Reedpoint.

“We’re just getting a ton of these proposals,” said Butch Larcombe, a spokesman for NorthWestern Energy.

Statewide, two out-of-state developers alone are proposing 43 solar projects, each 3 megawatts, NorthWestern says.

Not all of the solar projects will get built, says Kathi Montgomery, renewable energy specialist with the state Department of Environmental Quality’s Energy Bureau.

“We have a really good solar resource,” Montgomery said. “We don’t have as many cloudy days as other places have. Even when it’s really cold here in the winter it’s still sunny.”

Another advantage the state has is that photovoltaic solar panels are more efficient in cold temperatures, she said.

Three community solar projects developed by rural electric cooperatives recently went online in western Montana. Customers who own shares get credits.

But the deals between NorthWestern and Cypress are state’s first solar power purchase agreements between a solar developer and a utility, Montgomery said.

“These companies have come to Montana because the environment is right for these kind of projects,” Montgomery said.

The cost of solar equipment has come down substantially in the past few years, said Montgomery, citing one reason for the interest.

The price for the power also is right.

The Public Utility Regulatory Act of 1978, designed to promote alternative forms of energy generation, requires utilities to buy electricity from smaller, “qualifying utilities.”

NorthWestern currently buys power from about 30 qualifying facilities, most of them wind projects.

Rates are set by the Public Service Commission.

The proposed qualifying solar facilities are under 3 megawatts.

Because of the proliferation of solar proposals, NorthWestern has asked the PSC to lower the rates of mandated power agreements.

John Hines, NorthWestern’s vice president of supply, said the state is attractive to solar developers because profits are higher under the current rates.

But the utility argues that entering contracts at the current rate will result in higher electricity bills for the state’s 360,000 Montana customers, prompting a request for relief from the PSC.

NorthWestern currently pays $66 per megawatt-hour for solar electricity.

The payment for solar power would drop to $34 under NorthWestern’s request.

“Our customers are going to pay for it if the PSC doesn’t address that in some fashion,” Larcombe said.

NorthWestern, whose energy portfolio includes hydro, wind, coal and natural gas, says it doesn’t need more intermittent renewable power such as solar and wind.

“Obviously, if the rate cuts in half, many of these projects will not move forward,” the DEQ’s Montgomery said.

Frank Marshall of FLS Energy in Ashville, N.C., says the company has numerous project sites in Montana.

The 10-year-old company, which installed 225 megawatts of solar projects in 2015, develops, builds, owns and operates its project.

“We just think it’s an exciting market,” he said of Montana.

FLS is used to working with public utilities and a regulating commission because a similar model is in place in North Carolina, he said.

The company is working on four projects in Cascade County and three in Lewis and Clark County. It’s looking to develop in suitable areas close to electrical substations.

Ten to 20 projects are in some stage of development statewide, with the companies leasing land or attempting to get building and storm-water permits and approval from counties where zoning changes might be necessary, Montgomery said. Most of the projects are on private land, Montgomery said.

“These companies are trying to get ahead of other companies,” said Conell, Cascade County’s planning director, noting it’s a race to lease land first.

Cascade County is trying to get ahead of the interest in solar, too.

The county’s Planning Office is updating its zoning regulations to address the interest in the new energy option with changes out for public comment ending May 31, Conell said.

Cypress Creek Renewables of Santa Monica, has not formally submitted an application to Cascade County, but it is moving forward with three 40-acre projects around Great Falls and has supplied preliminary site maps to the county, county and Cypress officials said.

The locations are the corner of Dick and Fox Farm roads, the Ayrshire Dairy property south of 33rd Avenue and in Black Eagle.

“These are what you would call utility-grade solar projects,” said Jeff Mckay, a spokesman for Cypress, which says it’s the largest local solar developer in the country.

A standard project for Cypress is 5 megawatts which involves 30 to 40 acres of land, with most of it covered with solar panels, Mckay said.

A 5-megawatt solar farm requires about $15 million in investment and generates enough power for 1,200 homes a year.

The company, which has more than $1 billion invested in 2.6 gigawatts it has installed in 16 states, is looking at 10 projects in several Montana counties.

Montana is a great place to do business, and has open land available for solar development, Mckay said. Residents will benefit from clean solar energy, he added.

“I’m a firm believer in solar and alternative energy,” said Harry Mitchell, who owns the Ayrshire Dairy property.

Mitchell was contacted by Cypress last fall and signed a memorandum of understanding in January allowing the company to explore the feasibility of the site for a solar farm.

Mitchell would receive more money from a solar facility than he does now leasing it for pasture.

The project would not encroach on the Lewis and Clark portage trail in the area, he said.

Follow Karl Puckett on Twitter @GFTrib_KPuckett.