Officials from the Southeast Alaska Power Agency and the Wrangell borough are working on a plan to bring a solar farm and battery storage system to the island, a move aimed at stabilizing the power grid.

The regional power provider is looking for federal funding to pay most of the cost. The solar panels and batteries are estimated at $6 million.

The project was the centerpiece of a town hall meeting May 6 at the Nolan Center, where roughly 25 residents gathered in person and online to hear about the future of their utility service.

SEAPA Chief Executive Officer Robert Siedman told the audience that after exploring various renewable energy avenues — including wind, geothermal and tidal power — solar emerged as the most practical and cost-effective solution to supplement the town’s power supply, particularly during outages.

The proposed site for the solar array is 44 acres upland from Zimovia Highway, between Shoemaker Harbor and the 6-Mile Mill site. The land was acquired by the borough through a land swap with the Alaska Mental Health Trust Authority in March.

Borough Manager Mason Villarma, who also serves as the vice chair of the SEAPA board, emphasized the speed and significance of the development.

“We’ve been working on this a lot, even if it doesn’t look like it,” he said. “But it is pretty amazing to see the pace which a lot of this project has come together.”

The borough’s planning and zoning commission was scheduled to vote on a conditional-use permit for the development at its meeting Tuesday evening, May 11.

The staff report for the meeting said the project could be completed by June 2028.

The financial structure of the project is designed to protect electricity customers. Under a 25-year lease agreement presented to the assembly, SEAPA will pay the borough $1 a year for the land. Villarma explained that this arrangement is strategic, as it helps guarantee that residents get priority on the power generated by the site.

Between the solar installation and a necessary upgrade to the electric distribution switchyard — a larger electrical transformer at the 6-Mile mill site — the total investment is estimated at roughly $9 million. “Essentially, it’s a $9 million investment into Wrangell that we don’t have to pay for,” Villarma noted.

Siedman clarified that the solar and battery portion specifically represents about $6 million of the total cost. He explained that federal incentives, such as the Investment Tax Credit, could cover up to 50% of the cost. The agency is also seeking a $2.4 million grant through Sen. Lisa Murkowski’s office to further drive down the expense for ratepayers.

“The goal is to use outside funding as much as possible so the project does not create unnecessary pressure on electric rates,” Siedman said.

While the solar panels will provide clean energy, Siedman was careful to manage expectations regarding their output. Because of Southeast Alaska’s clouds and short winter days, a 5-megawatt solar farm is expected to have a “capacity factor” of about 10% to 20%. This means that while it can produce 5 megawatts during peak daylight, it will likely average between 0.5 and 1 megawatt over the course of a full year.

The project would start with 1.5 megawatts of solar generation capacity, possibly expanding to 5 megawatts.

To complement the solar panels, the project includes a 5-megawatt battery system. Siedman explained that the battery isn’t meant to run the whole island for long periods like a diesel generator. Instead, it acts as a high-tech safety net that can react instantly if a tree falls on a line or a generator fails.

“The battery can help hold voltage and frequency steady long enough for the system to ride through the disturbance,” Siedman said, noting it could provide enough time to start backup diesel generation and avoid a community-wide outage.

The push for new energy sources comes as Wrangell faces a capacity issue.

Wrangell and Petersburg share in the electricity supplied by the Tyee Lake hydroelectric power station on the mainland. Demand is growing, particularly as more homeowners and businesses convert from diesel furnaces to electric heat pumps.

While 72% of Southeast Alaska residences heated with diesel in 2026, that number was down to 50% by 2023, according to SEAPA’s presentation for the Wrangell meeting.

The agency has awarded a contract for a third water-driven turbine to boost Tyee’s generating capacity by 50%. Construction of the additional turbine is scheduled for completion next year.