In Kentucky, coal still generates the vast majority of electricity: 75 percent in 2018, according to the U.S. Energy Information Administration. That dominance is waning, however. 

Last year, renewable-powered electricity in the U.S. surpassed coal-fired power, and two of the largest coal plants slated for retirement in 2020 are in Kentucky.

Meanwhile, in a striking bit of energy transition symbolism, the state’s Coal Mining Museum, located in Benham, historically a coal town, made the switch to solar as a cost-cutting measure back in 2017.

“It is a little ironic,” museum spokesperson Brandon Robinson told local TV station WYMT at the time. “Of course, coal is still king around here.”

The museum’s decision is unlikely to be the predominant trend in Kentucky. Though coal is steadily losing its grip on the energy crown, new natural-gas combined-cycle plants will remain more economic than building large-scale solar projects in some parts of Kentucky for the next couple of years.

However, solar developers are inching into the state, teasing out deals and working to gain access to the lucrative PJM market, in part driven by demand from corporate energy consumers.

“With the cost of solar continuing to decline [and the] corporate renewables market continuing to grow and expand, it’s just natural that any state that has a policy framework that allows power to be sold between a solar farm and a corporate offtaker…is going to start to grow,” said Carson Harkrader, CEO at Carolina Solar Energy, a North Carolina-based company that began sniffing around the Kentucky market in 2018.

In late January, utility Louisville Gas and Electric Company and Kentucky Utilities Company announced the state’s first commercial and industrial solar deal — its largest solar project yet. The utility plans to sell power from a 100-megawatt solar farm, developed by Florida-based ibV Energy Partners, to Toyota and chemical and materials giant Dow, built as part of a new green tariff program. The deal hints at a budding corporate and industrial market in the state.

Rising corporate demand in PJM

Developers working in Kentucky say corporate demand is the main driver of the current market. The state has installed just 25 megawatts of solar. But looking ahead, developers such as Kara Price, senior vice president of permitting and development at North Carolina-based Geenex Solar, expect a bump from corporations with a Kentucky footprint, including Toyota and Dow, as well as tech companies such as Facebook and Google, which have data centers in PJM states including Ohio and Virginia.

Geenex has several early-stage projects under development in Kentucky, ranging in scale from 30 megawatts to more than 200 megawatts.

The company began looking at the state in 2018, the same year that Carolina Solar Energy did.

“We saw opportunity where there was an existing market, which was PJM, and not a lot of other solar developers there putting projects into the queue to meet that market demand,” said Carolina Solar’s Harkrader.

Though Harkrader doesn’t expect Kentucky will morph into a multi-gigawatt market in the near future, she also doesn’t expect demand to slow. The company is developing two projects in the state, each 50 to 60 megawatts and expected to come online in 2022. Wood Mackenzie Power & Renewables forecasts 331 megawatts of large-scale solar additions in the state through 2024.

The cooperative solar push

Kentucky’s municipal and cooperative utilities have driven much of the solar development in the state thus far. Louisville Gas and Electric Company and Kentucky Utilities Company, an investor-owned utility, has one 10-megawatt project, but WoodMac data shows the rest connected to the state’s co-ops.

The Kentucky Municipal Energy Agency, an 11-member co-op, approved the state’s next largest solar project in 2018: an 86-megawatt installation slated for operation in December 2022.

KYMEA got its start in 2015 but began operations just last year. When the organization began piecing together its portfolio, President and CEO Doug Buresh said there was “keen interest in economical renewables” as well as the state’s conventional coal resources. The organization’s current capacity mix is 60 percent coal, 30 percent natural gas and diesel, and 10 percent hydro. By 2022, KYMEA plans to boost solar to 18 percent, cutting coal down to 35 percent (and boosting gas to 34 percent).

“Prior to KYMEA’s pursuit of renewables, there were but a handful of solar projects in Kentucky, with the largest at 10 megawatts,” said Buresh in an email. “KYMEA has been told by solar developers that were it not for KYMEA, there was zero interest in developers building solar in Kentucky.”

Now, at least for some, the interest is there. In February, for instance, the Tennessee Valley Authority included a 69.3-megawatt project in Kentucky, developed by Spanish firm OPD Energy, in an announcement that it had contracted for 484 megawatts of solar, increasing its solar portfolio by 44 percent.

“Overall, there seems to be a growing desire for more solar in Kentucky’s overall energy mix,” said Buresh. “Economically, solar continues to have strong appeal.”

As KYMEA’s portfolio plans demonstrate, however, gas continues to have appeal for utilities as well.

“Kentucky is difficult because it’s an odd mix of publicly owned, regulated utilities, regulated investor-owned utilities, cooperative utilities and [Tennessee Valley Authority],” said Colin Smith, a senior solar analyst at WoodMac.

“There’s a strong chance that what we are seeing is a slow progression from a select number of those utilities…not necessarily the desire of all of them,” Smith said.