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 Arizona Solar Business Opportunity |
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Arizona: A Golden Business
Opportunity for Solar Power
The Phoenix of Arizona's Rising Solar Energy Industry
The purpose of this page is to educate reporters, research firms, financial analysts, venture capitalists, real estate moguls and solar manufacturers on how vast the supply of Arizona solar energy is. This bountiful natural resource pours down a motherload of pure clean, carbon-free energy on Arizona more than 320 days per year. (Click here to attend a "Building a Solar Industry in Arizona" seminar)
Not only is Arizona blessed with lots of sunshine, but we are also
lucky enough to have people like Congresswoman Gabrielle Giffords, Arizona Corporation
Chairman Kris Mayes,
Mayor Gordon (Phoenix) and Mayor Walkup (Tucson), Economic Developer
Barry Broome and the many other solar experts mentioned on this page that have been
working overtime to make the solar industry a reality in Arizona.
This effort includes the executives permitting the land, driving the steel
into the ground, stringing the transmission lines, developing the solar power regulations,
driving solar business deals, building concentrated solar plants, installing solar PV
on residential and commercial structures and striving for serious economic development
and job creation in Arizona. Arizona is building a network of solar power systems that will rival
the telecommunications infrastructure built during the '90s. In a similar manner to
the Internet's ability to carry billions of data packets around the world, Arizona's
solar energy collector and transmission network will deliver 10,000
megawatts of clean, carbon free energy to Arizona and the rest of the United States.
To make this possible Arizona carefully lined up the stars of
solar energy industry and made it as quick as possible to build out a solar power
transmission network. And, unlike California which has many unfinished projects,
Arizona is making it happen in a matter of months for projects such as the
Solana plant in Gila Bend, AZ. This is just one of the reasons why Arizona is now home to
an increasing number of solar manufacturing plants and has caught the attention
of many financial analysts, venture capitalists and private equity investors
that see the real value in building out a massive solar collector
network to capture Arizona's golden treasury of radiation and export it to
the rest of the United States on a profitable basis.
Many experts and industry research reports detailed on this page indicate that there is enough solar energy in Arizona and other southwestern states to power the entire United States. All we need to do to farm this goldmine of green energy is to build utility-grade concentrated solar power (CSP) plants to soak up the sunshine, and then use high-density transmission lines to export it to other states that need more electricity.
In addition to building utility grade solar energy power plants, there are millions of large commercial and residential roof tops available that could be used to collect solar power right now. Known as distributed generation, smaller solar power plants can use Arizona's superior net metering system to reduce electricity bills by allowing customers to generate their own electricity and sell any left over juice back to APS, SRP, and TEP to help them manage their peak load demand.
Next to every big commercial structure with a large roof there is also a large parking lot with even more room to deploy solar panels. Parking lot solar plants provide a dual benefit of producing clean energy as well as providing highly sought after shade from the sun's strong rays during Arizona's scorching summers.
The abundance of sunshine and the energy it can generate has made Arizona a focal point of political campaigns and economic discussions in Washington, DC. During the 2008 presidential race, a lot of emphasis was placed on Obama's campaign promise to spend $150 billion to build a new renewable energy industry and create more than 5 million jobs.
The election is over and Obama's administration has made good on their word by funding the construction and operation of a large scale network of renewable energy power plants, which will be a guaranteed way to free our nation from its dependency on foreign oil.
During the presidential election campaign numerous press articles focused on the amount of money that would be spent and the number of jobs it would create. What the media has not focused on to date is where the best places in America are located to build utility grade solar energy power plants and large scale wind farms.
We may be biased because we live in Arizona, but taking a quick look at the solar insolation map below, it is obvious that Arizona and New Mexico are by far the best places begin spending money in order to harness the treasure trove of solar energy that warms our deserts every day.
Arizona: The Persian Gulf of Solar Power in America
As you can see, Arizona offers a very large vein of solar energy
that can be used to power utility grade solar energy power plants, which will attract
billions of dollars in investment capital, provide a boom to Arizona's economic
development, and generate thousands and thousands of construction and permanent jobs.
Based on the amount of natural sunshine
and wind, Arizona is firmly positioned as one of the top providers of carbon-free energy.
Top States Ranked by Solar Energy Insolation
- Arizona
- New Mexico
- Nevada
- California
- Texas
- Utah
- Colorado
- Wyoming
- Florida
- Kansas
The good news is that Obama is very serious about this issue and plans on taking the appropriate action to get our nation back on track.
Obama signed the American Recovery and Reinvestment Act of 2009 into law and has budgeted to spend $41 billion, including:
- $11 billion funding for an electric smart grid
- $6.3 billion for state and local governments to make investments in energy efficiency
- $6 billion for renewable energy power generation loans
- $5 billion for weatherizing modest-income homes
- $4.5 billion for state and local governments to increase energy efficiency in federal buildings
- $3.4 billion for carbon capture experiments
- $2.5 billion for energy efficiency research
- $2 billion for car battery research
- $500 million for training of green-collar workers
- $400 million for electric vehicle technologies
- $300 million to buy energy efficient appliances
- $300 million for reducing diesel fuel emissions
- $300 million for state and local governments to purchase energy efficient vehicles $250 million to increase energy efficiency in low-income housing
The new Obama administration needs to consider carefully how to spend federal funds
on important programs such as national cap-and-trade program to reduce carbon emissions,
feed-in tariff subsidies, programs that
decouple utilities' demand side management (DSM) and renewable energy programs from
their guaranteed rate of return revenue, programs that continue important solar
investment tax credits and solar production tax credits.
More important than money that we MIGHT receive is the Renewable
Energy Standard (RES) mandated by the Arizona Corporation Commission.
Per the RES, a minimum of $60,000,0000 per year until 2025 has to be
spent on developing renewable energy power plants that generate clean, green power.
That budget adds up $1.2 billion of guaranteed money that will
subsidize the installation of solar on residential and businesses.
Every home solar power system installation
requires about ten people including sales staff to answer the phone, an engineer
to do the site evaluation, a CAD engineer to draw up the solar power plant design, a permiting specialist to file
permit paperwork with the city, a rebate specialist to file the paperwork to receive
tax credits from the federal government, a manager to approved the design, two to three
construction personnel to build it and one financial professional to arrange the financing
to pay for the installation.
With a $60 million guaranteed budget from the RES, and a typical
rebate issued by the utilities of $30,000, more than 2,000 residential installations
per year could be built. Do the math and 2,000 jobs would require 20,000 people to make
the installations happen. That is a lot of jobs, which would very beneficial for Arizona's
ailing economy.
Large scale utility grade solar power plants are much larger and
each would produce significantly more jobs than a residential installation.
The technology used to make solar panels is the same technology
used to make semiconductor chips. In the last five years thousands of semiconductor
engineers have been laid off. Creating this type of local demand for solar power panels
is the single best way to attract solar manufacturing companies to set up shop in Arizona.
Growing semiconductor silicon for computer chips or solar panels is a very similar
process.
The Greater Phoenix Economic Council (GPEC) is working overtime to
lobby the Arizona legislature to pass transferrable corporate tax credit packages
for manufacturers and companies that move their corporate headquarters to Arizona.
Another proposal includes passing a real and personal property tax reduction for
companies that make capital investments of more than $25 million in Arizona.
It is vital that Arizona invests all of its time and energy to
jump start the economy by frugally spending the yearly $60 million RES budget to
stimulate the demand for billions and billions of dollars that would flow into this
state to build solar electric power plants and recruit international solar manufacturers
to build new solar factories in Arizona.
As with any business, volume buying by the masses will create sufficient
demand to drive down prices and make solar technology available for every household and
business in Arizona. Below you will find links to an immense library of solar information
retrieved from Arizona's leading solar
economic development teams,
solar energy research consulting firms,
solar manufacturers,
solar installation teams,
solar business development specialists,
solar commercial real estate developers and
solar property management companies.
We built this repository of information so that
everyone in the solar industry will have a place to research solar energy facts and figures
and use them to create and disseminate marketing messages to educate the world on the
endless supply of solar energy that is falling on Arizona's golden deserts every day.
Building momentum in the national media is the best way for
Washington and the Obama administration to recognize that Arizona is the best place
to fulfill their promise of providing quick economic relief via a 10-year,
$150 billion deal to create 5 million green collar jobs.
Arizona needs to work together as team to generate a large
volume of news articles, which will highlight the sheer volume of roof space and empty
parking lots that are ready and waiting to be developed into distributed solar power
generation plants right where we need it most -- in the middle of the grid.
Regardless of what industry you work in, if your company
is doing anything related to solar energy, we would like to help you generate
some positive publicity for your efforts. We can generate publicity in any of
the following business-to-business categories. Each industry link is attached
to other companies that are successfully generating the type of news we would
like to be generating for your company.
Persuasive media campaigns are the best way to raise awareness
and reach decision makers in the following industries:
shopping malls,
movie theaters,
sports arenas,
convention centers,
airports,
warehouses,
military bases,
corporate campuses,
retail supercenters such as Wal-mart,
ranching/dairies,
hospitals,
manufacturing plants,
hotels,
churches,
schools,
apartment complexes and
large parking lots.
11/29/08 - Washington Post - Nations Spend in Tandem To Stall Global Recession
11/28/08 - The Associated Press - Western governors: Obama, act quickly on energy
11/23/08 - Washington Post - Obama Sets Expansive Goal for Jobs
11/25/08 - Forbes Magazine - Solar Energy's Sunny Side 11/23/08 - Business Week -Will Demand for Solar Homes Pick Up? 11/14/08 - SEIA: Does America Need a Feed-in Tariff to Stimulate the Solar Industry? 11/17/08 - Wall Street Journal - Consumers as Producers
11/17/08 - Wall Street Journal - In Search of Lower Sales
11/16/08 - Arizona Republic - Initiatives could yield new jobs 10/21/08 - Bloomberg News - Betting on 'Cleantech' Billions
10/15/08 - Los Angeles Times - A solar bond for Los Angeles?
10/06/08 - Wall Street Journal - Lightening the Load
9/24/08 - New York Times - Amid Boom, Concerns at Small Solar Firms
9/24/08 - Arizona Republic - Solar industry clears hurdle with tax credit 8/14/08 - Arizona Republic - Solar energy: It's a win-win-win
8/10/08 - New York Times - Giant Retailers Look to Sun for Energy Savings
7/11/08 - Fortune Magazine - The Southwest desert's real estate boom Installing a solar system is hard to justify from a pure
money making objective. If you are looking for ways to save money on
your electricity bills, installing solar is not the best idea.
Instead focus
on replacing light bulbs with CFL light bulbs and upgrading all your appliances
to the most energy effecient products you can afford. You should also unplug
energy vampires like cell phone chargers when not in use because they use a lot
of energy even when they are not charging anything.
However, if you can afford to invest $10,000 of your
own money to pay for a system that will allow your household to reduce America's
carbon footprint, buying and installing a solar energy PV system on your home
is a very wise decision. The link below will automatically include all incentive
programs available for your zip code. Try it!
Click Here to Measure Solar Return on Investment for Your Zip Code William C. Harris, President & CEO, Science Foundation Arizona,
said "Arizona is the solar capital of the United States. In fact, with the necessary
technology, Arizona has enough sun to provide power for the entire country. We
have the opportunity to lead the world in solar technology development in a span
of five to 10 years and reap enormous benefits: environmental impacts, wealth
generation resulting from commercialized technologies and economic
implications for entire regions."
The Governor's Arizona Department of Commerce (ADOC) also commissioned
the
Arizona Solar Electric Roadmap Study, which was released in January 2007.
The study proposed five key initiatives for jumpstarting solar growth in Arizona.
As the study noted, "Arizona has the potential to become a world leader in many
aspects of solar development, and is a model location for the evolution of new
solar technologies and applications." Arizona was one of the first states to pass standards for renewable energy,
beginning with its Solar Portfolio Standard, which was the precursor to the EPS
and the
Renewable Energy Standard. "Our standard is the most aggressive in the country for the number
of solar rooftops that it will spur," Kris Mayes, Arizona Corporation Commissioner said.
"Arizona will have, on a per apita basis, more solar rooftops than any state in the country."
Solar energy is expected to comprise two-thirds of Arizona's renewable energy, which
Mayes says will be able to power about 500,000 homes in 2025. "Solar energy is going to
be the engine of Arizona's renewable energy future," Mayes said. "We knew that when we
were developing the renewable energy standard." Gabrielle Giffords, U.S. Congresswoman made these statements at the Utility Scale
Solar Power Opportunities & Obstacles hearing for the Subcommittee of Energy and Environment:
"Solar power is a big idea, whose time has come. And, like the
space program, solar is an idea that can shape our nation in significant
and positive ways. In the coming months, in the coming
years, we will face critical decisions on how to address climate
change, reduce our dependence on foreign energy, and boost our
economic competitiveness. The beauty of solar power is that it offers an elegant solution to
all three of these challenges. Imagine what it would be like if every
time that it rained it rained oil, big black drops falling from the
sky. Don't you think that we would find some way to run around
with a big bucket and collect all of that energy that was falling
from the sky? I know this sounds like an absurd picture, but the
reality is that what we have outside today is something very comparable
to that. Literally, we have useful energy pouring out of the
sky, and nowhere does it rain sunshine with greater intensity and
consistency than in the American southwest. In fact, some studies show that there is enough sunshine in the
southwest to power almost our entire nation. One of these studies
was recently covered on - actually, was brought forward on the
front cover of the "Scientific American Magazine."
So, in other words, the southwest is home to a national treasure that streams
from the sky almost every day." Kate Maracas, Vice President Arizona Operations, Abengona Solar Inc.
made these statements: What does CSP or large-scale solar deployment really mean,
in terms of just kind of generalization across the board, what does
one gigawatt, 1,000 megawatts of CSP actually do to our economies?
Our findings were that for every one Gigawatt (GW) of CSP added to a state's economy,
the deployment would yield:
Those figures represent net effects, even after any tax credits or economic incentives
are utilized to stimulate industry development. Clearly, the findings show that
broader incorporation of large-scale solar plants into the U.S. generation fleet not
only produces the benefits of sustainability and energy independence, it also pays
back in very significant, positive economic impacts. Barbara Lockwood, Manager of Renewable Energy for Arizona Public
Service (APS) made these statements:
In Arizona, our most abundant renewable resource is sunshine. The solar resource
in Arizona is virtually unlimited, with more than 300 days of sunshine each year.
In addition, Arizona has sizable quantities of wide-open, flat landscape that is ideal
for the installation of large-scale solar equipment. Among the most important factors
in considering a resource for electricity production is the reliability of the fuel.
Arizona's solar climate provides a resource that is both dependable and predictable.
APS is committed to making Arizona the solar capital of the world and bringing
affordable renewable energy to all its customers. In 1988, the APS Solar Technology And Research
(STAR) center was developed to support the advancement of solar resources,
including field operation of both photovoltaic and concentrating solar technologies.
In addition to STAR, APS currently has over five megawatts of photovoltaic power
plants in operation providing reliable solar energy to our customers.
APS has also supported the advancement of concentrating solar power (CSP).
These technologies are "thermal electric systems" that use solar heat to drive generators
and engines. CSP thermal systems include solar trough concentrator systems
and central receiver (power tower) systems that use many mirrors to focus
light on a central solar collector. CSP also include solar dish Stirling systems and
other advanced solar concepts. In fact, APS constructed the first commercial CSP plant in the United States in
almost 20 years. The Saguaro Solar Power Plant, which came on-line in 2006, is a
one megawatt parabolic trough facility located just north of Tucson at Red Rock, Arizona.
This plant has provided critical learning for APS, the CSP industry, and researchers.
While small in size, it has facilitated new interest in CSP around the
country and the world.
But that was just the beginning of our entrance into commercial CSP. Also in
2006, APS stepped forward to lead a coalition of southwestern utilities interested
in CSP. The Joint Development Group is a consortium of seven entities exploring
the possibility of a 250 megawatt CSP project to be located in Arizona or Nevada.
Acting as project coordinator, APS issued a request for proposals in December of
2007. If all goes well, the consortium project could be selected this summer.
But our most significant step to date is the announcement on February 21, 2008,
of the Solana Generating Station. Solana is a 280 megawatt solar power plant to
be located 70 miles southwest of Phoenix near Gila Bend, Arizona. APS has signed
a long-term contract with Abengoa Solar, project developer and owner, for 100 percent
of the electricity generated by Solana. Solana is the Spanish word for "sunny
place." If operating today, Solana would be the largest solar power plant in the world. The
plant will use nearly three square miles of parabolic trough mirrors and receiver
pipes, coupled with two 140-megawatt steam generators. Operating at full capacity,
the plant will produce enough electricity to power 70,000 Arizona homes. Solana also provides significant economic benefits to the State of Arizona. The
Solana Generating Station will provide 1,500 construction jobs between 2008 and
2011 and 85 permanent operations jobs. Solana will also generate between $300 million
and $400 million in tax revenue over the 30 year life of the plant. All total,
Solana will result in over $1 billion in economic development for the Arizona economy.
Finally, Solana is an emission-free source of electricity, avoiding nearly 500,000
tons of carbon dioxide, 1,065 tons of nitrogen oxides, and 520 tons of sulfur dioxide
each year. It is the equivalent of removing 80,000 cars from the road each year.
Solana will also use 75 percent less water than the current agricultural usage of
the land. One of the most important aspects of Solana is its ability to capture and store
solar energy for later use. By incorporating large insulated tanks filled with molten
salt, heat captured during the day can be stored and used to produce electricity
when the sun is no longer shining. The molten salt and heavily insulated tanks are
able to retain heat with very high efficiency, and the stored heat can then be extracted
in the evening or even the following day to create electricity. The stored heat not only increases the total amount of electricity generated, it
also adds specific operating benefits for APS. The ability to use stored heat on demand,
also referred to as "dispatching," allows APS to respond to customer usage
patterns and emergency energy needs more effectively. Most southwest utilities experience
their highest customer demand during the summer months. While the
power need is substantial in the middle of the day, peak energy demand occurs in
the late afternoon and into the early evening hours. Because it can provide energy
even after the sun has set, the solar trough with thermal energy storage provides
the maximum value for APS and its customers. Diversification of generation resources is critical to maintaining a reliable electric
system and concentrating solar power provides a significant opportunity to diversify
energy resources. In addition, the costs to construct and maintain concentrating
solar power plants have declined while at the same time equipment and labor costs,
rising fuel prices and emissions concerns are increasing the risks of conventional resources.
APS also recognizes that renewable energy strategies will become even more important
under the prospects of carbon legislation. With zero carbon emissions, energy
from solar power provides one method of addressing concerns around global
warming while continuing to provide reliable electricity to our customers. And Solana is not the end of our interest in CSP. APS is currently engaged in
a formal dialogue with our regulators, stakeholders and customers about our future
energy sources. We are exploring the availability, cost, regulatory and policy implications
associated with many different types of resources including nuclear, natural
gas, coal, energy efficiency and renewable energy. One of several scenarios under
discussion is one where CSP plays a central role, adding 1,350 megawatts by 2020.
Each of these efforts will help us to meet, and possibly exceed, the progressive Renewable
Energy Standard established by the Arizona Corporation Commission. In considering the long-term potential for utility scale solar, one topic of consideration
is how to integrate large solar plants into the regional and national electric
grid. This topic raises numerous issues including availability of land for large scale
installation and the availability of transmission facilities and transmission capacity
to deliver the energy to load centers. The lack of transmission capacity and how that
is managed will be a significant factor in the long-term success of utility-scale solar.
In fact, transmission is generally constrained in much of the west and significant
new transmission investment is needed in the coming years for all types of generation
be they renewable or conventional generation. Also, the possibility of locating large scale solar on federal land should be investigated
and analyzed. By its nature, solar technologies require significant geographic
footprints. A general rule of thumb for a solar installation is five to 10 acres
per megawatt. As I previously stated, the Solana Generating Station requires three
square miles of contiguous land. Considering that the Federal Government is the
largest land owner in the U.S., a study of federal land in high solar resource areas
that may be made available for CSP development would also be beneficial and appropriate. The biggest obstacle to the success of utility-scale solar, including
Solana, is the potential expiration of the federal Investment Tax Credit (ITC).
Solana, and projects like Solana, became possible when the federal ITC for solar systems
was increased from 10 percent to 30 percent in 2006. While large-scale solar
is still more expensive than conventional resources, the 30 percent investment tax
credit decreased the cost sufficient to make these projects a reasonable option. Without
these tax credits, large scale solar projects, including Solana, are simply not affordable
today. As you know, the 30 percent ITC is scheduled to expire at the end
of 2008. The approval, permitting and construction of the Solana Generating Station
will take three to four years to complete. The Solana project also requires well over
a billion in capital investment. APS, Abengoa Solar, and the financial institutions
providing funding for Solana require certainty that Solana will be eligible for the
ITC once operational. If a long-term extension of the ITC is not granted, Solana will
not be completed. Joseph Kastner is Vice President of Implementation and Operations for MMA Renewable
Ventures LLC made these statements: Utility-scale solar projects represent the greatest opportunity for solar electric
generation technologies to reach cost parity with conventional gas and coal-fueled
electric generation. When equipment, labor, and capital are deployed to build solar
projects at a scale counted in tens of megawatts, gains from economies of scale including
the spread of transaction costs can deliver lower cost solar power. Additionally,
this will spur the cost efficiencies required to make the deployment of distributed
generation more competitive with retail electricity rates requiring minimal
subsidies. In order to promote the development of projects of such scale, project developers
and financial entities need to have a relatively stable financial, legal, and regulatory
environment. All fuel-less electric generation technologies are more capital intensive
than conventional combustion-based technologies, requiring long-term stability in
the business environment to mobilize capital. The following concepts/initiatives are
key to the development and financing of utility-scale solar:
1. Long-Term Federal Tax Incentives
The current 30 percent investment tax credit (ITC) for solar projects expires at
the end of 2008. At present, these federal incentives are critical to the development
and financing of utility-scale solar projects. Without the federal tax benefits, utility scale
solar projects will not be viable because the cost of energy will simply be too
high. The effectiveness of existing incentives is significantly limited in driving development
of utility scale projects with long lead time particularly given the pace of development
and consumer adoption of energy technologies. The existing tax credits
or incentives are short-term, piecemeal programs subject to the uncertainty of the
Congressional reauthorization and/or appropriations processes. For example, the
production tax credit for wind and other types of renewable energy, established in
1992, has been subject to three expirations and several short-term extensions (some
retroactive). Uncertainty around the ITC extension increases the cost of capital due
to the risk of meeting a deadline and leads to a boom and bust cycle which has
caused the inflation of equipment costs purely from supply constraints. Congress should pass a long-term ITC to drive substantial private sector investment
in clean energy technologies. Investors need stable, long-term, and predictable
incentives. MMA Renewable Ventures supports a minimum seven-year timeframe
for clean energy tax credits because this is the minimum period necessary to enable
rational investment decisions and deployment of resources in utility scale projects.
The federal regulatory environment's support for energy technologies can be significantly
improved by establishing consistency and predictability. At the bottom line, those of us who are actually building and financing utility scale
solar projects need greater certainty of the federal tax benefits. In addition,
the ITC could benefit from the amendment of several rules within the IRS code: Act (CRA) consideration. Structured correctly, this could serve to catalyze
both distributed and utility-scale solar projects in low and moderate-income
communities and/or serving public facilities. It would also serve to attract additional
institutional investors into the space and help to create "green-collar"
jobs in lower-income communities; 2. A Stable Legal Framework
One of the important prerequisites for investors in utility-scale solar projects is
certainty the commercial arrangements will remain intact for the full term of the
financing. Utility purchasers, commissions, and State and federal regulations all
need to provide certainty and assurances that the various commercial arrangements
will not materially change throughout the life of the project. For instance, in reviewing the standard contracts proposed for the Nellis AFB
project it was determined that certain elements in the site lease and the streams
of revenues from the power purchase arrangement with Nellis AFB and the REC
Agreement with Nevada Power made the project somewhat less than financeable.
The most significant instance involved the change-in-law risk associated with the
REC agreement. If the Public Utility Commission of Nevada had not issued an order
that approved the contract and an associated stipulation that provided assurances
regarding change-in-law risk, the project might not have been financed. 3. A National Renewable Portfolio Standard
Today, renewable energy resources provide a fraction of total U.S. energy, with
the potential for significant growth. More than twenty-seven states and the District
of Columbia utilize a wide variety of renewable portfolio standard (RPS) mechanisms
to drive a greater reliance on renewable energy. A basic RPS requires the
electric utilities (investor-owned utilities and publicly-owned utilities) within a state
to procure a percentage of their electricity output necessary to meet load from renewable
energy sources in a specified timeframe. Current State policies require
varying percentages of renewables, typically targeting a goal of one percent to five
percent in the first year, increasing each year to achieve a goal of five percent to
20 percent over approximately 10-15 years. In general, a utility can meet RPS requirements by incorporating renewable energy
into its fuel mix in one of four ways: (1) building renewable energy facilities;
(2) purchasing power directly from an existing renewable energy source; (3) buying
RECs; or (4) by encouraging production of distributed renewable energy, efficiency,
or conservation. The specifics of each RPS program vary widely state to state from
the goal, to the criteria, to the method of implementation. Many State programs set
standards for specific technologies to ensure diversity of electricity supply by supporting
the development of promising technologies that may not currently be the
most economic. A national RPS would set the minimum standard for wholesale renewable energy
usage throughout the United States. This would serve the important function of
guaranteeing a minimum degree of market demand for renewable energy generation.
Every state would be required to develop an energy regulatory strategy that
includes a base level RPS with performance-based metrics that would drive investment
in, and adoption of, viable, cost-effective renewable energy technologies. Specifically,
Congress would mandate the establishment of minimum State renewable
energy procurement standards with ample flexibility for State programs that surpass
the federal minimum standards, encouraging dissemination of best regulatory
and utility procurement practices, and providing states with incentives to increase
reliance on renewable energy, reward energy efficiency, and to provide for a national
REC market. For the reasons stated previously regarding stability, it is important
that a national RPS is cognizant of existing State programs to ensure long-term investments
already undertaken are not adversely affected. The federal RPS would require
sufficient non-compliance measures in order to provide a strong incentive for
utility compliance. A national RPS can be a market driving, demand side solution for addressing the
broader goals of energy policy through development of diverse, secure renewable energy
sources and energy efficiency, while at the same time encouraging technological
advances throughout the energy supply chain. The future of renewable energy production
in the United States resides in this synergy of governmental policy and
emerging technologies-and without each, the aim of diversified, sustainable, and
efficient energy production is simply impossible in the foreseeable future. By setting
these aggressive goals for renewable energy production targets, the government will
drive innovation and the market will create solutions. 4. Valuing Carbon Emissions and Other Externalities
The current cost of conventional fossil-fuel electricity does not include the environmental
and social costs associated with the emission of carbon, mercury, and other
pollutants into the atmosphere. Either a cap-and-trade system or emission specific
taxes would complement long-term subsidies and the establishment of minimum
market demand by internalizing the impact of burning fossil fuels into the price of
electricity. This would tend to make solar energy more competitive with fossil fuelfired
electricity and further boost investment. Market Differences in the Southwest
The southwestern portion of the U.S. including California, Nevada, Arizona, and
New Mexico has the strongest solar resource in the country. The State of Nevada
has an RPS-driven REC market that provides a large part of the economics for the
Nellis solar project. The RPS rules for the state have specific requirements for solar
and applies a multiplier to RECs (termed Portfolio Energy Credits under the Nevada
RPS) produced by solar facilities. RPS programs in the other three states exist,
but are not necessarily structured properly for significant market penetration of
utility-scale solar projects. California
California has catalyzed solar development through the California Solar Initiative
(CSI) program which utilizes a short-term production based incentive. This direct
subsidy has spurred the development of distributed generation projects (mostly less
than one megawatt), but is not applicable for utility-scale projects. It is expected
that California will introduce a tradable REC program for the existing state RPS
in the near future that will encourage distributed generation projects currently suffering
from subsidy levels declining faster than capital costs for key equipment.
California utilities have utilized a request for offer (RFO) process fulfilling their
RPS requirements. Since there is no solar set-aside, most of these contracts have
been awarded to other renewable technologies that are currently more cost effective
than solar. Contracts which have been awarded to solar projects under the RFO
process have largely gone to earlier stage solar technologies that have yet to be implemented.
The California Public Utilities Commission recently announced a feedin
tariff based on the a revised calculation methodology for the "market price referent"
that sets the ceiling price for contracts awarded in the RFO process. The new
methodology attempts to take into account the time-of-use benefits associated with
the solar production curve matching well with the state-wide demand in California.
The current consensus is that the announced feed-in tariff does not provide adequate
levels of compensation for solar PV projects. Arizona
There are certain regulatory hurdles that impede the development of solar and
other clean technologies in Arizona. Low energy rates and tariff structures that do
not adequately incentivize the peak-producing benefit of solar negatively impacts
the economics of solar. Net-metering policies are essential to opening up the market
to more wide-spread adoption, instead of limiting potential customers only to those
who have 365 day operations, and large load centers. Under the current net-metering
rules only small systems are rewarded, otherwise solar generation that exceeds
on-site usage is not compensated for. Like net-metering, interconnection standards
must be standardized across the state and have a minimum of 2MW to sufficiently
promote industry adoption. Lastly the available incentives are insufficient. APS has
taken the lead in establishing a PBI program, which is an important step, and for
the most part well-designed (20 year PBI structure), however the total available
funding is only enough to fund a few MW per year-which is not enough to entice
the solar PV industry to undertake the cost and risk of entering a new market. New Mexico
New Mexico has shown true leadership in the aggressive RPS goals and high net
metering limits. This includes solar specific requirements that must be fulfilled beginning
in 2011. The law also includes a "Reasonable Cost Threshold" which limits
the payment of power from solar installations to currently unfinanceable levels. Conclusion
Investors are beginning to respond to the market driving incentives for solar energy
provided by Federal and State governments. The Nellis AFB project is a great
example of how these types of incentives can be combined to create a viable project
opportunity when a third-party can enter and efficiently monetize the tax benefits.
These types of projects will only reach the volumes required to significantly reduce
the cost of solar energy if the incentive programs are structured to ensure the creation
of a stable, long-term market for project developers, installers, equipment
manufacturers, and investors. The geographic market for these opportunities could
be expended greatly through several actions at the federal level including a national
RPS and the adoption of a market mechanism for internalizing the external costs
of emissions from conventional sources of energy. How to Get a Degree in Solar Energy Eight Free Solar Energy Tutorials Arizona State University Creates Solar Power Laboratory
Free Solar Lecture Series in Scottsdale
Arizona State University joins forces with TUV Rheinland Group to create
the most comprehensive, sophisticated, state-of-the-art facility for testing
and certification of solar energy equipment in the world.
Press Release.
Arizona State University (ASU) Solar Testing and Research (STAR) Laboratory - ASU's Photovoltaic Testing Laboratory was established in 1992 to
develop criteria for solar PV certification and, later, testing equipment.
Since 1997, PTL has issued more than 250 qualification certificates and
tested more than 2,500 solar modules for more than 150 companies
representing 18 countries. The lab is the first accredited PV qualification
testing laboratory in the U.S. and one of only a few in the world. It is
part of ASU's Solar Initiative, which brings together ASU expertise and
facilities on numerous aspects of solar energy research and development.
Click here to take a virtual tour of STAR. University of Arizona - Arizona Research Institute for Solar Energy Northern Arizona University (NAU) - Solar Energy Passive Research Laboratory What the National Media is Saying about Solar Energy:
Arizona Solar Frequently Asked Questions Database
Have questions about solar energy, solar technology used to convert sunshine
to electricity or a how to evaluate and find the right solar power system for
your home or business? The links below will help you find the answers to all
your questions.
Arizona Solar - Measuring Return on Investment
Arizona Solar Energy PowerPoint Presentations Loaded with
Photos, Graphs, Diagrams, Facts & Figures
Arizona Solar Power Subject Matter Experts
Arizona Solar Executive Quotes
Arizona Solar Energy Industry Analyst Research Firms
Arizona Solar Power & Energy Research Reports
Arizona Solar Power & Energy Manufucturers
Arizona Solar Power & Energy Projects in Arizona
Arizona Solar Power & Energy Economic Development Groups
Arizona Solar Power Associations
Arizona Solar Power Companies Building New Facilities in Arizona
Arizona Corporation Commission - Solar Regulation
Arizona Solar Power & Energy Legislature Contacts
Congressional Solar Power & Energy Government Contacts
U.S. House of Representatives Solar Energy Sponsors
U.S. Senate Solar Energy Sponsors
Arizona Solar Power & Energy Requests for Proposals
Arizona Solar Power & Energy Technology
Arizona Solar Power & Energy PR Contacts for Solar Story Development
Arizona Solar Power & Energy University Research Programs
Arizona Solar Power & Energy Venture Capital Firms
Arizona Solar Energy Lease Finance Companies
Arizona Solar Power & Energy Retail Locations
Arizona Solar Power & Energy Distributors/Resellers
Arizona Public Utility Solar Energy Programs
Arizona Solar Rebates, Incentives, Tax Credits and Property Tax Discounts
National Solar Power & Energy Corporate Customer Testimonials
Arizona Solar Power & Energy Residential Customer Testimonials
Stories we would like to pitch to the media:
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