South Dakota's lack of incentives cripples solar market

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When one thinks of South Dakota, they think of the Badlands, the Black Hills, and motorcycles and Sturgis. They don’t think much about the fact that this largely rural state has the same amount of solar potential as Florida does, or that it has better geothermal resources than most other states. Maybe that’s why some criticize it for a lackluster renewable energy market.

For instance, Tim Teeslink, national sales manager for GenPro Energy System.

“We’d be very happy to have net metering,” he said. He’d also like to see the state enact a renewable portfolio standard rather than a goal, which the state currently has. “Our current administration is looking to do a 10 percent [spending] cut across the board, so I don’t see where there will be any new incentives. The only systems that really make sense are those with battery storage.”

GenPro—a wholesale seller of photovoltaics, solar thermal systems, wind turbines, and more—sells 95 percent of its products out of state.

Teeslink said the majority of the business the company does in South Dakota is related to off-grid cabins and remote solar-powered water pumping.

Regarding net-metering, Hunter Roberts, South Dakota’s energy policy director, said, “Every year it seems like there’s legislation for net metering, and every year it fails to pass.” He said the same will likely hold true in 2011.

While the state doesn’t offer net metering it does offer all sectors a handsome property tax incentive up to $50,000 or 70 percent of the assessed property value, whichever is greater, Roberts said. That includes the commercial, industrial, residential, and agricultural sectors of the state.

But there’s not much impetus in the state for solar and other renewable incentives other than that, Teeslink said.

The state is dominated by electric cooperatives (co-ops) that aren’t interested in adding renewables or incentivizing more renewables through distributed-generation programs like net metering, according to Teeslink.

“We’ve talked with the public utilities commission, but there’s so much clout from the co-ops that there’s no real incentive [to add renewables],” he said.

Part of the reason the cooperatives aren’t interested in adding renewables is because the cost of coal is cheaper than what they’d get from renewables, Teeslink said.

“Unless coal gets cap and trade, or there’s some sort of economic penalty for using coal, the cost for the co-ops is definitely going to weigh them toward the fossil fuel generation,” he said.

Still, the state is on course to meet the renewable portfolio goal of 15 percent renewable, said Roberts.

“It looks like we’re going to meet that objective in 2015,” he said. The majority of that energy will come from large-scale wind turbines, he added.

Pictured: A solar water pumping station, typical of the type of installation you'd find in S.D., courtesy of NREL.