By Bart Pfankuch
Despite being home to wide-open spaces and abundant sunshine, South Dakota ranks 47th in the nation for production of solar power and has lagged well behind other states for decades.
Less than a year ago, the only utility-scale solar farm in South Dakota was a 1-megawatt facility near Pierre, which became operational in 2016 and accounted for just 0.01% of the state's overall power generation.
But recent developments have brightened the outlook for future development of medium- and large-scale solar power projects.
Driven by new federal sustainable energy tax credits, a national mandate to move energy production away from coal and a desire by power companies to diversify their sources of energy, the state has seen increased interest in development of new solar farms and electricity transmission lines to generate and transport more solar energy in South Dakota.
Chris Nelson, a member of the South Dakota Public Utilities Commission, said he doesn’t expect solar power generation to become as widespread in the state as wind power has over the past decade.
But there is a new buzz about solar, especially with the launch last month of the Wild Springs Solar project east of Rapid City in New Underwood, now the largest solar farm in the state, he said.
“That really is a big deal because it’s the first large project here in South Dakota,” Nelson told News Watch. “We’re certainly in a period where there’s a lot of investigation of solar being done around the state. That is absolutely true.”
New solar projects coming online
The solar surge began in September 2023 when power began flowing from the 80-megawatt Fall River Solar facility near Oelrichs, southeast of Hot Springs. That project, owned by New York-based Greenbacker Renewable Energy, will provide enough electricity to power almost 18,000 households a year for customers of Rapid City-based Black Hills Energy, which is buying the electricity produced.
Another jolt forward came in March 2024, when the massive Wild Springs Solar facility began operating on nearly 2 square miles of prairie just south of New Underwood. That $190 million solar energy project, built and owned by National Grid Renewables of Bloomington, Minnesota, will produce up to 128 megawatts of energy that will be purchased by Basin Electric Power Cooperative of Bismarck, North Dakota. The grid is so large its gray solar panels are easily visible from Interstate 90, about 3 miles to the north.
On the east side of the state, a new 345-kilovolt transmission line expansion has been proposed to carry wind and solar power from Big Stone City to Becker, Minnesota, for service to communities across both states. Missouri River Energy Services (MRES) of Sioux Falls is a partner in the project that was announced in fall 2023.
MRES already has plans to build a 5-megawatt solar power generating facility on an 80-acre site south of Brookings that could begin generating power by 2025. That project could include up to 11,000 solar panels to power up to 1,100 homes per year.
The South Dakota PUC in 2020 granted approval for the proposed Lookout Solar Project north of Pine Ridge in Oglala Lakota County that could produce up to 110 megawatts of electricity once operational, though that project has stalled.
Only solar projects of 100 megawatts or larger require PUC approval in South Dakota, and there are no permit requests for solar projects before the commission at this time, Nelson said. However, he does anticipate there could be development of smaller solar projects in the near future.
“In conversations with people around the state, there’s probably a dozen different (solar) projects that are being talked about or looked at with various degrees of seriousness,” Nelson said.
Power companies seek diversification
A new mantra of many power companies is that they want to take an "all of the above" approach to reduce reliance on fossil fuels while ensuring a steady supply of power, including from solar.
The phrase refers to a philosophy of diversification in which power companies are increasingly seeking a mix of consistent energy sources from coal, natural gas and hydro power while also adding more green energy from wind and solar, which are dependent on weather and are therefore less reliable.
"We have our integrated resource plan that looks to bring more renewables into our portfolio," said Lynn Kendall, community affairs manager at Black Hills Energy, which serves 1.3 million customers in eight states. "But overall, we are focusing on reliability, cost effectiveness and safety for our customers."
At Basin Electric, which serves 3 million customers across South Dakota and eight other states, that diversification has resulted in a dramatic shift in how it has obtained energy over roughly the past two decades, according to the company's 2022 annual report.
Basin received 84% of its power load from coal in 2000 and the remainder from hydro power, oil and diesel sources. None of it came from natural gas or wind. In 2022, the company received 39% of its energy from coal, 24% from wind, 17% from natural gas, and the rest from hydroelectric and other sources.
Andy Buntrock, vice president of strategic planning and communications for Basin, said the company is buying power from the Wild Springs Solar facility as a way to further diversify the sources of energy it receives and provides to its customers.
"We were early adopters in wind, and now we’re pioneers on the solar end of things," Buntrock told News Watch. "It helps with the consolidated mix of energy sources and is part of our 'all of the above' energy strategy."
Buntrock said Basin is under contract to buy 114 megawatts of the power generated at the 128-megawatt capacity Wild Springs farm. Basin recently put out another request for proposals to buy more energy and will consider solar power if an affordable, reliable opportunity arises, he said.
"Our membership is very clear that they want affordable and reliable power and we’ve got to figure out the recipe for that, which we believe is creating an all-around basket of sources to provide that affordability and reliability," Buntrock said.
Even as interest in solar and wind power continues to rise, and federal tax incentives make those power sources increasingly affordable, Basin is likely to maintain some energy sources powered by fossil fuels, Buntrock said.
"We can’t rely totally on one of those types of (renewable) energy because on a cold winter morning when it's cloudy and there’s no wind, we’ll still be keeping our members warm with natural gas and coal and diesel. And that’s just the way it is," he said.
Tax incentives driving solar growth
The tax incentive picture has brightened significantly in recent years to encourage more development of solar power, particularly on the federal level, said Tim Blodgett, vice president of member services and communications at MRES.
New tax credit programs can be “pancaked” with other loan or grant programs to allow credits of up to 60% on new investments, he said.
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