Arizona Utilities Push Solar Power

Arizona Utilities Push Solar Power

Apr 21 - Oakland Tribune

For a state with an abundance of sunshine, Arizona makes little use of solar power.

The cost of the systems, availability of cheaper power sources and equipment problems caused by scorching temperatures have combined to limit solar development.

That may change. Some Arizona electric utilities are now encouraging consumers to invest in solar power.

Two major utilities, Arizona Public Service Co. and Tucson Electric Power Co., are offering homeowners incentives to install solar systems. The utilities are under pressure from the state to increase their use of "green" electricity from renewable sources.

Financial incentives can be crucial, because the systems are expensive to install and it can take eight to 16 years or more to recoup the cost in energy savings. APS began offering 50 percent rebates on solar equipment this year, both on systems bought through APS or from other dealers.

After promoting solar energy for years, Scottsdale, Ariz. resident Bud Annan decided last year to put his money where his beliefs were.

The consultant for British Petroleum and former chairman of the Arizona Clean Energy Industries Alliance spent $13,785 to cover his garage roof with solar cells. He wanted to know if technology and economics have made it the right time for homeowners to own their own power plants.

A year later, Annan's 2-kilowatt unit works well, and the retired federal Department of Energy solar expert estimates it saves as much as $50 a month on his electric bill.

"Usually we go along and take electricity for granted. Putting it on your roof means you don't take it for granted," he said.

But despite efforts like Annan's and what the utilities themselves are doing, the amount of electricity coming from solar in Arizona is minuscule -- less than 1 percent of power generated in the state.

Solar power is still two to three times more expensive than traditional electrical generation. The panels take up a lot of space.

The inverters needed to convert solar energy to appliance power have been unreliable.

And Arizona's summer heat makes the units less efficient.

That is why the state's largest solar plants are being built in Prescott and Springerville, where higher elevations keep them cooler in the summer than in the Phoenix area.

Officials with the three main Arizona utilities are guessing that solar will become competitive with other sources of electricity in 10 to 20 years.

They say the exact time depends on the price of natural gas, whether solar equipment becomes less expensive and the volatile situation in the Middle East and utility incentives.

Tom Hansen, vice president and technical adviser for Tucson Electric, estimates 20 years.

"Costs are coming down about 5 percent a year. If it keeps dropping, in 20 years it should be competitive. Right now the issue is cost. It is just a very expensive technology," he said.

But Ernie Palomino, a senior research engineer at Salt River Project, said it could be as few as 10 years because of green- minded homeowners.

The good news is that after more than 30 years of fits and starts in research and equipment, solar promoters and utilities have learned so much about what does not work that they are finally getting an idea of what will work.

Also, better systems are on the market, including residential inverters with five-year warranties.

Utilities have learned they get the best return by building several large power plants instead of many small ones.

Two utilities are aiming to give Arizona the largest solar power plants in the world.

Tucson Electric has built a 3.78-megawatt plant -- second- largest in the world behind one in Hemau, Germany -- and plans to keep expanding it until it gets to 8.6 megawatts by the end of 2010. APS has a 1.5-megawatt plant operating and plans to expand it to 5.5 megawatts in three to five years.

Still, between the two plants, that's only enough electricity for 2,600 to 3,700 Arizona homes.

The Arizona Corporation Commission is pressuring both utilities to expand solar generation to reduce their reliance on natural gas, coal and nuclear power.

It requires regulated utilities to obtain at least 1 percent of their electricity from renewable sources like solar, wind and biomass by 2005 and 1.1 percent beginning in 2007.

So the utilities have decided they need the help of homeowners, businesses and anyone else willing to install solar panels.

In December, APS doubled its incentives and began offering rebates of up to half the cost of a solar system, but has capped the total rebates it gives out a year at $1 million. Tucson Electric offers credits as well as solar systems for sale. Salt River Project, which isn't subject to the Corporation Commission edict, is considering incentives.

Typical residential units being sold today don't use the solar power in the homes but instead send it back to the utilities. The utilities then provide a small reimbursement.

Because solar is expected to expand slowly, Arizonans likely still will rely on traditional electricity fuel sources for decades.

"We're both blessed and cursed with low-cost energy," said Peter Johnston, manager of APS' technology department.

"We're blessed so that individuals can take advantage of it. And we're cursed in that it is difficult to replace it with some alternative energy source."