How to build solar in Alaska
Inside efforts to mitigate the state's looming natural gas shortfall with utility-scale solar
Image credit: Lisa Martine Jenkins (Photo credit: Renewable IPP)
Image credit: Lisa Martine Jenkins (Photo credit: Renewable IPP)
It’s been nearly a year since Alaska’s largest solar project, the Houston Solar Farm, came online.
The 8.5-megawatt project is tiny by the standards of the contiguous United States, but its operators and financial backers see its first full year of operations as a major milestone, and a proof point for the wider Alaskan solar industry. It’s key evidence of the so-called Land of the Midnight Sun’s viability when it comes to propping up an industry that is so deeply dependent on sunshine.
“Alaska has the same amount of daylight as everyone else,” said Jenn Miller, CEO of Renewable IPP, the Alaskan independent power production company acting as project developer and local operator for the Houston farm, located north of Anchorage. “Our seasonality curve is different, and it’s more drastic.”
But utilities in the state, including the project’s offtaker Matanuska Electric Association, are well accustomed to navigating that curve. And today, Miller said, they’re eagerly looking to integrate more renewables into the state’s energy mix. That’s in large part because Alaska is expecting to face a shortfall of locally produced natural gas — its predominant source of energy — as soon as 2027.
A series of pilots paved the way for the Houston project: most in the 140-kilowatt range, constructed between 2017 and 2020. Those were the test bed for Renewable IPP’s larger-scale follow-up, Miller said: “What we wanted to understand was, what does it cost to build solar in Alaska, is the production coming in as it's modeled, and basically do the economics work?”
In the 12 months since it came online, the project has averaged 99% system availability and solar production has matched modeling and predictions, Miller reported, thanks in large part to some technical tweaks that were designed to accommodate Alaskan winters.
Despite the project’s initial successes, though, getting it off the ground was no easy feat.
The building challenge
To say that Alaska doesn’t have an established solar industry is something of an understatement, said Miller. Basic infrastructure that exists in the lower 48 states — for supply chains, EPC firms, and even a workforce — are all essentially being built from scratch in Alaska, she added.
It’s not that there’s something inherently challenging about solar in the state, Miller said: “The physics are the same in Alaska as they are in the rest of the world…this is a regular project, we’re still doing the same calculations.”
But there are some technical hurdles that are unique to the location. Miller pointed to unusual project elements like raising the panels an additional three feet to accommodate snowfall, and a racking system specifically designed for snow clearing. The project also uses bifacial panels, which can generate electricity from both sides, to take advantage of light reflecting off of snow.
“We have a really high DC/AC ratio in our design,” Miller added. “We ran a whole bunch of different sensitivities on economics, and what we found is that when you have a high ratio, then you boost your production on those cloudier days, and overall it makes the project more economic.”
Beyond the tech though, there were supply chain challenges that projects in the lower 48 almost certainly don’t face. First of all, most established shipping routes (and pricing) for suppliers don’t include Alaska; the closest they get is Seattle, or Tacoma. That means Renewable IPP needs a second-leg partner, to get materials from Washington state up the coast to Anchorage.
That was a challenge they largely ironed out during the pilot projects, Miller said, and the company now has “a really good relationship” with a local shipping partner in Seattle. One pleasant surprise, she added, was that both the Chinese panel manufacturer Risen and the inverter supplier SMA were able to ship all the way to Anchorage.
“There’s definitely a supply chain that is maturing,” Miller said.
Another, more local challenge, is the Anchorage port itself, which isn’t operational every day of the week. And because of the relatively remote location, trucking materials up from the contiguous U.S. isn’t really a viable alternative. The company, though, has learned to make it work.
The financing challenge
Technical and logistical challenges aside, financing a solar project in Alaska also requires a slightly different approach, explained Julia Bell, chief investment officer at CleanCapital, which funded the development of the Houston project and is its long-term owner.
“It has been a little bit of a challenge, frankly, because there’s a lot of state bias,” Bell said. ”Because there wasn’t really a solar industry up in Alaska, the first response we would always get was surprise and slight confusion.”
For its part, the CleanCapital team is also new to Alaskan solar, and spent a lot of time looking at weather data, she added.
The project uses a tax equity partner that CleanCapital had already worked with on projects in the contiguous U.S., Nelnet Energy, which wrangled the project’s investment tax credits. For debt financing, they worked with the Alaska Energy Authority’s Power Project Fund, a program that disperses loans to utilities and independent power producers for project development, with the express mission of economic development in the state.
One thing Alaska has going for it is a pipeline of reliable, creditworthy utility offtakers, which is essential for putting financers — particularly those who aren’t traditionally involved in clean energy — at ease.
“You know who's paying fixed payments to you, as long as the sun keeps shining,” Bell said.
And for most of the year, she added, it does — with the exception of a few weeks around the winter solstice, when the Houston project gets just six hours of sunlight each day. To make up the difference during periods of less sunlight, though, utilities in the state are “rapidly deploying battery storage,” Miller said, thanks in part to federal funds and grants.
While the developer ultimately landed on the right set of financiers for the project, Bell said that wasn’t necessarily a given; the main thing they look for is experience, especially for projects in new locations. And solar experience beyond pilot-sized projects is hard to come by in Alaska.
“As we get more projects of any size and more financiers are involved, they’re going to get more and more comfortable,” she added.
Broadly, Miller said, the Houston project and CleanCapital’s investment came at a critical turning point for Alaska’s renewable energy industry. In the last few years she has watched the conversation change from “could this work?” to “how do we get this to move faster?”.
“We know they work. We know they’re investable,” she added. “And the critical timing of CleanCapital’s investment…has changed the landscape of what our options are going forward.”
Houston won’t be Alaska’s largest solar farm for long: last week, Renewable IPP signed an offtake deal with another of the state’s utilities to build a 45-MW solar farm, set to come online in 2027, also financed with support from CleanCapital.
