Oklahoma AG opinion clears way for third-party solar ownership
- An opinion issued this summer by Oklahoma Attorney General Mike Hunter appears to clear hurdles that had kept the state's solar industry from utilizing third-party ownership, power purchase and leasing arrangements.
- The opinion concludes leasing and power purchase agreements (PPAs) are allowed in incorporated areas of a municipality, while panel leasing is allowed in unincorporated areas. The opinion has the standing of law, the Oklahoma Sustainability Network (OSN) told Utility Dive.
- Solar leasing arrangements typically compose the majority of sales for solar companies, but not all states allow them. Florida regulators in April cleared the way for leasing arrangements. Last year, Hawaii regulators signed off on new tariffs allowing solar+storage leasing as the state moves towards 100% renewables.
The AG's opinion could have a major effect on the Oklahoma renewables market, where production has significantly lagged solar potential. According to the Oklahoma Gazette, the state is in the top-10 for solar potential, but it has less than 50 MW installed within its borders.
That could change with the attorney general's opinion — the product of a task force brought together by Oklahoma Secretary of Energy & Environment Michael Teague to evaluate distributed generation policy.
The opinion represents "significant change in distributed solar policy in Oklahoma," Montelle Clark, energy policy director at OSN, said.
The group says the most important findings in the opinion are that leasing is allowed in unincorporated areas, while leasing and PPAs are allowed in incorporated areas. Importantly, a third-party owner of solar panels would not be considered a "utility" by the Oklahoma Corporation Commission
"The permissibility of a third-party owned distributed generation source depends on whether the source is operating in unincorporated or incorporated areas of the State of Oklahoma," according to the opinion. "If the distributed generation system is operated in an unincorporated area pursuant to a lease agreement, the third-party owner would not be a 'retail electric supplier.'"
- Oklahoma Attorney General ATTORNEY GENERAL OPINION 2018-5
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