Arizona faces solar standstill

Solar panel outside of Brooklyn Pizza Company on 4th ave. Photo by Brittany Smith/Arizona Sonoran News Service
Solar panel outside of Brooklyn Pizza Company on 4th avenue in Tucson, Ariz. Photo by Brittany Smith/Arizona Sonoran News Service

In April 2011 Tucson resident Christian W. Reaney and his family decided to utilize their unused land to do their part in going green by switching to solar energy.

After considering the financial and environmental benefits, Reaney allowed Tucson Electric Power (TEP) to install rooftop solar panels on his property in exchange for a monthly $250 equipment lease charge.

“Our old bill averaged around $500 per month, now our TEP is usually only about $17 plus the lease fees,” Reaney said. “It’s a little bit of an eyesore at times, but it has been a great way to save money and get clean energy. In the summer these things humm!”

Arizona is one of the most ideal states for solar generation in the nation. Yet, according to Bruce Wright, associate vice president for Tech Parks Arizona, the state is just not utilizing its full solar potential.

Arizona has a modest renewable energy standard goal of 15 percent by 2025, which is lower than most states according to percentages given by the Database of State Incentives for Renewables and Efficiency, a comprehensive information source site funded by the U.S. Department of Energy.

What is holding Arizona back?

According to the Environment Arizona Research Policy Center, Arizona has the highest solar capacity per capita in the nation. This has created more than 360 solar companies throughout the state.

Based on research from the American Council on Renewable Energy, Arizona installed more solar electric capacity than any other state and had the highest amount of installed solar capacity per person by the end of 2013.

That same year Arizona was ranked No. 2 in the nation for being a solar state, according to the Solar Electric Power Association.

Not only has Arizona completed the construction of many large solar projects that are able to produce solar energy, but also has an abundance of available rooftop capacity.

“Our company was actually started because one of the owners was looking out his airplane window above Arizona and didn’t understand why all the roofs were empty when we have so much solar power. It was just absolutely absurd to him why we didn’t have more,” said Michelle Burnett, vice president of sales at the Sun Valley Solar Solutions.

According to the National Renewable Energy Laboratory, Arizona has the potential to host more than 800,000 solar panels on both residential and commercial rooftops, making it possible to produce more than 320 times as much electricity than the state uses annually.

Arizona’s available land area and constant sun seemed like the perfect combination for solar success. It wasn’t until 2014 when the market started getting cloudy.

“We were No. 1 in the nation for solar energy per capita, four years ago,” said Harvey Bryan, professor and director of Solar Energy Engineering and Commercialization at ASU. “Unfortunately, due to push backs from the major utility companies and the Corporation Commission there is a pause in our progress towards being a more solar state.”

At 32 megawatts, APS’s Gila Bend Solar Power Plant generates enough energy to power 8,000 homes.  Today, APS has more than 800 MW of solar energy available to customers – enough to power more than 200,000 homes across Arizona. Courtesy of Arizona Public Service.
At 32 megawatts, APS’s Gila Bend Solar Power Plant generates enough energy to power 8,000 homes. Today, APS has more than 800 MW of solar energy available to customers – enough to power more than 200,000 homes across Arizona. Courtesy of APS.

In 2013, Arizona Public Service (APS) utility company proposed a fee increase for its solar customers to cover the cost of maintaining the power grid, tacking on $50 to $100 per month to solar customer’s bill.

The Arizona Corporation commission regulators reduced the proposed fee to an increase of  $5 per month that would apply to new solar installations. This fee came around the same time that the company saw a lower number of solar panels installations.

Another utility company posing a threat to the solar industry is the Salt River Project. SRP has proposed a rate hike for all of their customers with rooftop solar, ranging from $50-$100 per month.

But unlike APS, SRP doesn’t need the approval of the Arizona Corporation Commission to move forward. The vote on the matter will take place on Feb. 26 in Phoenix. If approved, solar customers can expect to see increases in their April bills.

“Rates like this won’t kill solar, but it will make it less attractive,” Burnett said, “Our business with SRP clients has come to a complete halt because without knowing what they will charge, we don’t know what we can save our clients.”

When solar energy first started, utility companies and local and state governments were offering many incentives and even paying their consumers to jump on board. After seeing how much money they were beginning to lose, these big companies started to fight to gain their power back, Burnett said.

“They say they are charging consumers to help maintain their energy grid, yet SRP just invested a lot of money in building their own solar plant. How is their solar better than our solar on the grid? It just doesn’t make sense,” Burnett said.

Roman Black, president and CEO of Solar Gain, Inc., says that Arizona politics is holding back renewable energy companies like his. “We are dismantling utility companies’ monopoly, one rooftop at a time and they don’t like that.”

Solar Gain, Inc. provides solar energy to residences and businesses in Southern Arizona. Black said that APS’s rate implementation, or solar tariff, was a huge blow to the industry. “Arizona’s solar future isn’t looking too bright when looking at other progressive states, like California and New York. We have the solar capacity but the utilities that impose fees hold us down.”

Bryan said California has always led the way in solar energy. “We lost out to states like New York, Connecticut and New Jersey, states that don’t have much solar capacity. Countries like Germany and Spain have aggressive policies that promote solar power energy and they have a fraction of the solar capacity then we do,” he said.

Financial setbacks are one of the main reasons solar has been suffering. Buying the technology can come at a hefty price, yet many consumers are unaware of the different options the solar companies have to offer them.

“A long time ago solar was really expensive. However, now there are so many ways to make the switch with zero down,” Burnett said.

Reaney was one of these consumers. “I looked at buying instead of leasing but technology changes and for $120,000 price tag I had to decide if I really wanted to own a huge antique system in 20 years,” Reaney said. “Leasing made more sense because they installed it at no cost to me and even monitor and maintain it for efficiency for 20 years.”

The seventh solar plant in the APS AZ Sun portfolio, the Gila Bend Solar Plant reached commercial operation in October 2014. Through its AZ Sun program, APS has financed and built its own photovoltaic power plants throughout Arizona, which are being designed and constructed by third-party solar developers, contractors and equipment providers. Courtesy of APS
The seventh solar plant in the APS AZ Sun portfolio, the Gila Bend Solar Plant reached commercial operation in October 2014. Through its AZ Sun program, APS has financed and built its own photovoltaic power plants throughout Arizona, which are being designed and constructed by third-party solar developers, contractors and equipment providers. Courtesy of APS

Rex Stepp, solar program leader at APS, looks at solar differently. “At APS, the primary goal is to provide a sustainable energy future, and solar is a great part of that. We are not a standstill,” he said.

The industry is bringing jobs to Arizona. In The Solar Foundation’s “Arizona Solar Job Census for 2014” it was shown that the solar industry employed 9,170 solar workers in Arizona in 2014, proving a 7.2 percent growth since November 2013.

According to the report, Arizona is third in the country, behind Texas and New Mexico in “total solar potential.”

Pima County has seen an increase of solar jobs and saved $1.95 million in energy costs by increasing the proportion of renewable energy it uses, according to reports prepared by the County’s Office of Sustainability and Conservation.

Since 2009, Pima County has increased its solar energy portfolio from zero Megawatts to 9.6 Megawatts which produced 1,087 local jobs, the report said.

In order to achieve Arizona’s solar potential, advocates believe a few things need to change. Environment Arizona believes the state of Arizona must commit to  a higher percentage of its electricity from solar power and utilizing solar energy whenever and wherever possible like on public buildings and properties.

“More and more people want to get away from the rising cost of energy. Having increases each year when budgets are tight really infuriates people. They want to be in charge of their choices and be free from utility companies making it feel like a monopoly.” Burnett said.

Alexis Montano and Rosie De Queljoe are reporters for Arizona Sonora News, a service from the School of Journalism with the University of Arizona. Contact Alexis at alexismontano@email.arizona.edu. Contact Rosie at dequeljoe@email.arizona.edu.

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