Kansas of course has plenty of sunshine and a heck of a lot of wind. Both can be harnessed to produce valuable electricity. Wind is a powerful source in the state of Kansas. But there are signs a solar industry just hasn't kept pace. On a closer to home level solar advocates say Kansas has work to do to enable homeowners and business owners to take advantage of the sun's rays with the Kansas reflector today are Mark Horst, owner of King solar of Yoder and Michelle Milburn of Stanyan, wholesale electric and Pratt, as well as Jessica Lucas of clean energy business council to make the connection with two bills introduced in the Kansas legislature to spur development. Welcome to you all.
Thanks, Tom. Glad to be here.
Thanks for taking time out of your day. Jessica, let's start with you. And perhaps you can just give us a bit of a foundation some information that listeners can can lean on to understand the size and scope of the solar power in Kansas.
Yeah, Tim, happy to be here to have this discussion. Our legislation was designed with the idea of creating a uniform policy for Kansans that no matter where you lived in the state, everyone was playing by the same rules. They knew what the system size limitations were and, and how the net metering policy works. Right now, there are some some of the most restrictive policies in the country in the evergy territory. And then the municipal and cooperative territories have a variety of different policies, or sometimes no policies that customers are subject to. And our solar installers have been doing this work and trying to provide people solar, when they call up and say, Hey, we're looking at ways that we can reduce our energy load and lower our cost. And we've bumped up into a lot of gray areas. So we came to the legislature with some ideas about how we could improve the process and hopefully make it easier for Kansans to access this energy opportunity.
And Jessica, the the the gray areas you're talking about apply to both commercial solar facilities, and also the private homeowner type.
Yeah, so when we're talking about distributed generation, and rooftop solar, that is a technology that can be utilized by both the homeowner and a business owner. The policy today for those in the investor owned utility area is that you can install a 15 kilowatt system as a residential homeowner, and assist them sized up to 100 kilowatts for a commercial business. That's pretty limiting for businesses. There's a lot of folks who would love to be able to utilize this technology and experiencing experience some of the cost savings that comes with that. But the system size doesn't make the system
work. Okay, one last piece of our background, or part of this is what about the political dimension of this kind of help us understand what you look at when you go into the Capitol and work on behalf of Clean industry businesses.
So what we've seen is that the solar industry has changed a lot over the last decade. And there's a more recognition by folks under the dome that, that there's interest in accessing this technology. This is not a Republican or a Democrat issue. Folks recognize that they want their constituents to have every tool available. Many folks believe that all energy options should be available. And solar rooftop solar is one of those. So it's not a democrat or republican issue in the way some things are. We have support across the board. It's just a matter of figuring out how to work within the existing systems and the business models of how utilities operate today. How can we all work together to transition to make this possible to more people and still honor our commitments to customers?
All right, Mark, and Michelle, we've raised the flag on a couple of bills here. Let's start with the second of these House Bill 2228. And it's a piece of legislation creating a uniform policy for net metering. I'm going to try to define net metering here. It's a billing mechanism that credits a solar energy system owner for the electricity they add to the grid. And utility companies compensate those contributors of electricity and at times, so electricity back to those individuals and companies. Does that ring true?
It is a piece of that legislation. Yes. Net metering also sets a standard for safety and interconnection, the system size ratings, as well as how yes power that any excess power that the home isn't gonna instantly consume will go back to the grid for credit. And of course, they'll also be paying for that same energy that they use from the grid as they would any other homeowner
So, Jessica talked about standardizing the rules of this industry of the solar industry. Why is why would that be beneficial in Kansas?
I think the main reason is the different types of utilities that we have now investor on utilities have been working under net metering for quite some time. But there are municipalities who also say, hey, we offer net metering and parallel generation as well. But their version of net metering is different, it often will also be paired with additional fees or, or things that might deter folks from investing in those. So if we're going to have net metering, or that exchange of credit on a, on a monthly basis, we'd like to see it more consistent. You know, for instance, municipalities, there's 118, statewide terms of municipalities, and those policies vary widely, and there can be right next door to each other. And so as contractors, and as someone like myself, who helps folks assess whether or not they have a viable option with solar, we take into account their production, we take account their resource, but we also have to take into account these policies that vary, and it can really degrade the viability of a project.
Yeah, really sounds like it adds a high level of complexity, my course King solar, how would you perceive the notion here of creating a standard set of policies regarding solar in Kansas?
So So standardization is is basically a it's also a question of equity. So if someone lives in a different city or a different cooperative area, they they may not have the ability to install solar for various reasons. And even to the point of the the coops and the municipalities can change their policies on a monthly basis at their city council meeting or at their at their board of directors meeting. And in the legislation would just say, No, this is these are the rules you're playing by. And it's a stable, equitable way to do it. So that's that's the big
benefit. Mark, do you think that the rules of other states will say Missouri, for example, are more amenable to solar installation? i We have Kansas companies doing a bunch of work in Missouri on so
yes, is the answer to that second question. i My company is strictly here in Kansas. So I can't speak too much other than what I learned from trade shows and from from colleagues, but there are a number of of installers that work in Kansas City Metro Area on both sides of the line.
All right, Jessica, getting back to House Bill 2022 28. What are some of the other key elements of here, we can tell people about?
I'm actually going to defer that question to mark to just talk through a couple of the things. We're really proud of this legislation because we tried to think about all of the feedback that we've received from policymakers about what what they think is important. So I think speaking,
okay, Mark, go ahead, just give us a couple of highlights of this.
So basically, the legislation is drafted so that it opens net metering up super, super wide, and it's saying there's there's probably 10 or more different ways we can we can get to more stable equitable interconnection policy or net metering policy. And so one of those is system sizing caps. The currently the system sizing cap for residential is 15 kilowatts and commercials 100. This raises that substantially. And there's sizing metrics. So right now the legislation has the term appropriately sized written in who will who defines appropriately size, everyone defines it and everybody would defines it differently. So this legislation would, our goal would be to say, though, this is the formula you use. Another one is, is a cap on allowable capacity. Currently, the net metering capacity cap is 1%, we'd say, you know, there are other states that have upwards of 20% or more grid grid penetration from solar, we're asking for 10% at this point.
So can you stop right there? You better say that last bit there in English. Okay. 1%.
Okay, so 1%. So, whenever I say solar grid penetration, basically, utility in any given year, has a number of capacity, and it's measured in megawatts or megawatt hours, depending on how they're doing it. And solar produces in kilowatts, which is, which is a mathematical formula. It's smaller than a megawatt. And basically, they take the number of megawatts they sold last year, divided by 100. And that's 1%. And, and that's how much solar can be installed. We're asking for that instead of being 1% of last year's peak to be raised to something larger like 10%.
Okay, Michelle, just getting back to you consulting with individuals who might like solar. Have you noticed an increase in the number of people coming to you curious about this?
Absolutely. You know, can Standing and works with 17 different branch locations are 16 of those throughout Kansas. So I will tell you in the 10 years I've been with standing and building out, and helping electrical contractors, you know, to install these types of products. And we went from working with three or four of our branch locations. And last year, it was 14 out of our 17. So those are the areas that we're seeing. And as it expands West, yes, folks want the technology. And they're saying, I have this resource, I have this power, I have this energy that is landing on my property, I want to collect it and make use of it.
Just curious to when you have individuals trying to make decisions about solar, whether it's a business owner, or somebody with a big farming operation, perhaps is this about helping them find a lower cost option for electricity, and about consumer choice?
It's 100%, about customer choice and being able to access or at least find out what options are available to lower their cost. And our goal is recognizing that the industry is changing. Technology is has rapidly outpaced I think what any of us thought was going to happen. We need Kansas policies to change with that so that folks can have the choice, they have the opportunity to make the choice for the energy that they consume. I think Michelle said it great, right? This, this energy source is landing on their roof, and technology exists for them to capture it and use it. Let's make sure they can do that.
Yeah, the challenge here is to convince the House and Senate and the Governor that you're right. Okay, Jessica, let's shift to the other house bill 2227. And this is, this is different. This is about third party agreements used to finance solar projects. Can you kind of give us a summary of this one?
Yeah, so how spell 2227 is another tool that can be used. In this circumstance, the Army, for instance, is advocating for this one of the champions who testified in the hearing. And they want the ability to lease their solar array or at any of the energy source that they would derive from renewables. And rather than have to install and own it. So it's the difference between an own versus a lease. It's another tool, it's available in more than half of the states across the country that folks are using, effectively, Oklahoma is another state where power purchase agreements are available. And it enables you to go to other developers to find out what options are available. The utility also could offer a third party power purchase agreement or a power purchase agreement, but they can negotiate with other developers as well.
Tell me if I'm wrong. Currently, only utility companies in Kansas can enter into these purchase power agreements.
Yes, that's correct. That's why this legislation is being sought. So that it does provide again, more choice to customers and making decisions about their energy consumption.
Yeah. And that's a barrier. And it could be that there's a wealthy investor and in Hays, Kansas, and wants to enter into one of these agreements as an individual, for businesses in the Hayes area, I guess. But they couldn't do that. They couldn't be the financier for something that might help that community.
Yeah, you're absolutely right. This business is or this bill is another tool. And we want Kansans to have as many tools in their toolbox to use for deciding their energy generation, and where possible to lower their cost.
Mark. And Michelle, Can you envision if this was adopted and put into statute, that there could be a domino effect? If if more investment from different sources not necessarily utilities could come in? Would it make it easier and make a difference to people making decision? Would it make a difference for the businesses that are engaged in solar?
Yeah, so a power purchase agreement allows a long term agreement to pay for the upfront capital investment. So currently, if if let's say a church, for example, wants to put a solar array on their roof, they have to come up with hundreds of 1000s of dollars to do that. A power purchase agreement allows a financer to buy the system, own it and have it installed. And then the church just buys the power that that that produces every month, perhaps at a lower cost. Typically, yes, yes, typically, but at least maybe they could have they could feel good about their drawing from the sun. Sure. There's multiple reasons why people install solar, financial is one environment is one and also just being able to be self sufficient is a big one right now in today's in today's political climate.
Michelle, do you think you some of your clients and people that come to you would have a different idea about the opportunities for Coatesville solar, if there were a broader array of investment opportunities as somebody helped pay them those upfront costs?
Absolutely, I think mostly about some of those areas that financially need more longevity. In rural areas where we have hospitals and limited access to some of those services, it's a great way to create more financial longevity for them, because these systems are 30 years or more in terms of performance. Schools, we see this also as an investment, we have enough issue with trying to to fund our schools, if we can lower that operating cost on an on an annual basis. It's a win win. So the idea is that with a PPA, you will be able to purchase energy that's produced at your property for less than what you would from the grid. And you can do that at a monthly payment that is lower than what you would have been paying as to the utility.
Just question about these power purchase agreements. What do other states do in this arena, there must be some states that authorize it and states that don't states don't care. Maybe they don't have a solar industry.
All of the above, there are seven that expressly prohibit third party PPAs and Kansas is one of those seven, there's at least 27 who have granted that authority, including Oklahoma.
So Oklahoma, we know grants us authority for third party financial arrangements. Do we know anything about Colorado and Nebraska? Missouri,
Colorado and Missouri, I believe, also permit them? I do not believe Nebraska has anything on the books one way or the other? I
see. Okay. All right. Jessica, let's both of these bills have been heard in committee. What What can people expect to see going forward? Like what's the process?
So the process is that the bills have had a hearing and now is really where the dialogue begins. And we're having conversations with legislators and also with utility partners to figure out where can we find common ground. bills start as an idea, we think our ideas are pretty good ideas, and we would be thrilled to see them on the governor's desk. That being said, the legislative process is one of negotiation. And so we're talking with all folks that have an interest in this and trying to figure out what is the best path forward for Kansans. And our intention is that we will see these on the governor's desk and able to benefit all ratepayers in the state.
Okay, so Mark, I'm gonna give you the final word here. Can you do us a favor and make a pitch to your neighbor across the backyard fence about why they should have solar on the top of their house? Ah,
it depends is going to be my first answer. What's your what are your goals? So if your goals are saving money every month, and it really depends on which way your roof faces? Do you have trees that cover your property, some, some customers just shouldn't install solar. If you're looking to save the environment, then we can find something that will work for you. It might be a ground mounted system in the backyard, it might be just changing your light bulbs to LEDs. And if you if you have a mixture of those a financial technology and environment, then we'll find something for you. But But it really depends on your goals. So I can't tell my neighbor, they need solar, it's a choice for them. And that's what this bill is about is about consumer choice, maybe more precision.
one last thing that I want to say to anyone listening that is interested in solar, as with any new technology and business, it does behoove you to do your research and Mark's business, good energy solutions, Cromwell solar, we have some wonderful Kansas based companies that are doing this and I would just urge folks to do your homework and know that your Kansas based companies are doing really good work and they deserve your phone call if that's where you're considering going.
All right, excellent. I think we're gonna have to leave it there. We'll see how the political process works out. I want to thank our guests today Mark Horst, owner of King solar of Yoder Kansas, and Michelle Milburn of Stanyan, wholesale electric and frat and Jessica Lucas, thank you all for being here. Thanks for having.