Why Mississippi's solar industry is growing rapidly despite a lack of state incentives

• Mississippi’s solar energy sector is experiencing rapid growth despite minimal state financial incentives.
• Key growth factors include existing grid infrastructure, a competitive power sales market, and increasing energy demand from new businesses.
• Federal incentives and local tax abatements are supporting solar development, making state-level incentives unnecessary.
• Continued growth is expected due to increasing energy demands, corporate clean energy goals, and the affordability of solar power.

Despite practically no financial incentives offered by the state for solar companies to build new power plants, the renewable energy sector has been exploding in Mississippi in recent years.

The growth is due to several factors, including an existing infrastructure in place to connect new power to the grid and a competitive market for developers to sell new power to customers, such as Entergy, the Tennessee Valley Authority and Mississippi Power.

Several industry leaders also pointed to a growing need for new power production in Mississippi as more energy-dependent companies locate in the state, a fact not lost on state government leaders and the Public Service Commission, which has been actively working with companies to approve work on new solar energy production projects.

“What has been very important here, and I think has led to much of the numbers that you’ve seen, has been constructive relationships, where there can be honest brokering between utilities, developers and regulators,” said Brandon Presley, a former Public Service Commissioner for the Northern District and a former candidate for governor. “That’s been the secret sauce.”

Current Central District Public Service Commissioner Dekeither Stamps said that while solar has grown to account for just about 1% of the state’s power generation, it is double what it was in 2020. Most of the state’s power generation comes from natural gas. As part of the state’s goal to increase production across all fronts, Mississippi is looking at solar as a necessary part of the equation, he said.

“We’re part of the executive branch of the governor, and the executive branch has been in unison, from the governor to us as a supporter of all energy production,” Stamps said.

Since 2017, companies have invested more than $4.5 billion in the construction of more than 40 solar farms throughout Mississippi, according to PSC records. Of those projects, at least 27 of them have been completed and connected to the grid, supplying at least 1,331.22 Megawatts of power, which if converted into Megawatts per hour, could power nearly 400,000 homes for a day.

Projects to be completed in 2025 through 2027 will total 16, which when finished will add at least 2,000 Megawatts of power to the grid.

“There are just lots of opportunity to generate that energy,” said Brian O’Shea, the director of public engagement for Apex Clean Energy. “The Mississippi electric grid is fairly dependent on one fuel source, natural gas, and so there’s plenty of room for diversification of the electric grid. There’s lots of transmission capacity for that region. Mississippi tends to use more power in state historically than is generated. So, there’s, opportunity for local demand or local generation to catch up to local demand.”

Despite the lack of state incentives, those on the federal and local level appear to be supporting enough of the growth of the solar industry as not to warrant the state to step in with additional incentives, said Bill Cork Mississippi Development Authority executive director via email.

“Federal incentives such as the Section 48E Clean Electricity Investment Tax Credit and the Section 45Y Clean Electricity Production Tax Credit, provide significant financial benefits for facilities that generate clean electricity, including solar projects, making state-level incentives unnecessary,” Cork said. “Additionally, officials at the local level may choose to provide a property tax abatement or a Fee in Lieu of tax to project developers that make those requests. At MDA, I approve (Fee in Lieu) agreements, which offer generous property tax reductions and can improve the financial viability of solar projects.”

Those federal incentives were both part of the Inflation Reduction Act of 2022, passed and pushed for by former Democratic President Joe Biden. Among other things, the law promoted and incentivized the production of clean energy, or power production that had a reduced or net zero carbon footprint.

In order to be approved to build, solar developers, or any energy plant developer for that matter, must obtain permission via the Public Service Commission, which has jurisdiction over telecommunications, electric, gas, water and sewer utilities.

How has solar industry grown in the last five years?

In 2024 alone, 10 solar production sites connected to the grid with more than a dozen more on the way in the next three years.

O’Shea, whose company will soon break ground on a $700 million solar project producing about 396 Megawatts of energy in Hinds County near Bolton, said Mississippi’s energy landscape provides ample opportunities for developers to sell power.

For example, the state features ample supply of agricultural land on which it is ideal for developers to build. The fact that Mississippi receives more sunlight per year than other states and already-in-place transmission lines all over the state for new power production sites to plug into once the plant is up and running.

Without that last factor, it would cost about $3 million per mile for companies like O’Shea’s to build those lines to transmission facilities, he said.

Mississippi is also part of a transmission line sharing agreement organization, the Midcontinent Independent System Operator Inc., an Independent System Operator and Regional Transmission Organization that provides open-access transmission service in various parts of the Unites States of America and Canada.

Essentially, this organization puts several energy transmission facilities owned by different groups, which facilitate the movement of electricity, onto the same system.

“(MISO creates) a bit more of a competitive environment for power sales,” O’Shea said. “In a state like Alabama, you have to essentially sell the power to one person, which is the utility. In Mississippi and Arkansas, Louisiana, when you’re in the MISO region, you can take advantage of the classic American capitalist concept of competition, where it doesn’t all have to go through the utility. We have the ability to sell to the utility or to a different off taker and compete for the most affordable, lowest cost power for commercial and industrial customers.”

Cork and Stamps both said another driver for the industry is interest in cleaner energy from companies coming to Mississippi and those already here. For example, the Tennessee Valley Authority, an energy producer, Amazon and Nissan, three major players in energy, technology and car manufacturing with large operations in Mississippi, are working to be carbon neutral within the next few decades.

“If Amazon wants some solar, we got to work and see what communities would be more amenable to make that happen,” Stamps said.

Together, these factors create an environment where it is both affordable and incentivized for solar developers to land projects in Mississippi, even if the state lacks interest in providing the same level of investment it does in other industries, said Presley, who is now an executive with Edelen Renewables, a solar development firm.

“We saw the explosion in the solar industry take off, where I think I cited somewhere around $3 billion worth of renewable energy projects during my time on commission,” Presley said. “There never was a renewable portfolio standard in Mississippi, and likely there is not going to be one. … There wasn’t any type of state incentive, yet the state’s attractiveness from being both pro-business and having a constructive regulatory environment, solar providers found Mississippi a good place to do business. I think that’s going to continue, you know, given all the factors in place today.”

Future growth for solar industry in Mississippi?

Apex Clean Energy’s project, the Soul City Solar power plant, will provide about $150 million in tax revenue to Hinds County over a 30-year period, as well as pay money to landowners for the use of property for the solar site. Other projects around the state will also benefit their home counties and local landowners through similar means, which has driven some of the interest in solar and could continue to do so in the future, Cork said.

“Mississippi has seen steady growth in utility-scale solar, driven by rising electricity demand, corporate clean-energy goals and utilities’ sustainability efforts.” Cork said. “Growth will likely continue, but projects depend on community support and available land and infrastructure. Not all areas are suitable, even if they have strong solar potential, due to these system-level requirements.”

At the same time, more projects are popping up. The Public Service Commission is currently reviewing nine solar projects for approval to build out and add more power to the grid. There are also four other projects announced but not yet on the books to come before the commission.

“If you look at all the new generating capacity that was put on the grid last year, about two thirds of it was solar,” O’Shea said. “If last year is any indication, solar growth will continue to accelerate or keep pace, and a lot of that just goes down to cost. Solar is cheap. It’s affordable. It has low long term maintenance costs and fuel costs and is a sort of a hedge against kind of an unpredictable environment where you don’t know how the price of natural gas is going to change over time.”

When asked how he sees the industry going forward, Stamps said as long as there are greater demands in Mississippi for more energy supply, there will be a desire for solar power to be part of that growth. Presley added that as long as both power regulators and developers remain on the same page on solar, the sky is the limit.

Grant McLaughlin covers the Legislature and state government for the Clarion Ledger. He can be reached at gmclaughlin@gannett.com or 972-571-2335.