Agreement paves way for dramatic increase in solar energy production in Alaska

A renewable energy company has signed a deal with a Homer utility company that paves the way for construction of Alaska’s largest solar farm, according to people involved in the project.

The solar farm, once operational, will be a small step toward reducing demand for natural gas from Cook Inlet in southcentral Alaska, which could run out as early as next year, scientists say.

Jenn Miller of Renewable IPP says the new solar farm will be built near Puppy Dog Lake in Nikiski on the Kenai Peninsula.

With 45 megawatts of capacity, Alaska’s solar energy production will nearly triple, counting both rooftop solar panels and existing solar farms, she added.

It will power about 9,000 homes on the Peninsula and will be more than five times larger than Houston’s Renewable IPP project. That solar farm came online last year with an 8.5-megawatt capacity, making it the largest in the state to date.

“There will be over 60,000 solar panels over 300 acres,” she added.

The Homer Electric Association board unanimously approved this week to purchase power from the solar farm, the company said in a statement. That sets the stage for the project, which will soon seek approval from the Regulatory Commission of Alaska, Miller said.

Miller said the solar farm could be operational by late 2027.

This will double the renewable energy produced by the company to 24% of its total production, said Keriann Baker, the company’s chief strategy officer.

Baker said that, along with the utility’s new plans to replace the gas-generating unit with a more efficient turbine, the solar farm would reduce Homer Electric’s natural gas usage by more than 15%. The new gas turbine could also be up and running as early as late 2027.

She added that the company’s reduced reliance on natural gas will help conserve natural gas from Cook Inlet, which is essential in southcentral Alaska.

Enstar, a gas company in the region, has warned that local gas supplies from the aging Cook Inlet basin could start to dwindle next year. The looming shortage has utilities scrambling to support new renewable projects. They are also considering importing natural gas to Alaska, which is expected to skyrocket electricity and heating prices.

“Any gas we can leave in the current pool is more gas for others to use,” Baker said.

Baker said the agreement will allow Homer Electric to purchase solar power from the project at a price lower than the cost of natural gas today. The price will be consistent for decades, which will benefit ratepayers by reducing their reliance on gas, the price of which can fluctuate, she said.

“For us, it’s a no-brainer,” she said of the utility company.

Renewable IPP and Homer Electric have been working on the project for about three years, Miller said.

She added that the project will be built on land owned by the Alaska Mental Health Trust Authority under a long-term lease agreement.

Miller declined to provide an estimated cost for the project, but said it would be in the tens of millions of dollars.

“Our mission is to diversify the generation mix in Alaska, and we want to do it in a way that drives down prices,” Miller said. “These increasingly large projects are the vehicle to help us do that.”

2024 Anchorage Daily News. Distributed by Tribune Content Agency, LLC.