Energy prices have the sun looking good
By Shelley Shelton
Arizona Daily Star
Tucson, Arizona Published: 07.15.2007
In the late 1970s, a nationwide energy crisis had people looking for ways to become less dependent on fossil fuels. Many focused their attention on solar energy as a renewable resource.
But energy prices moderated, tax credits for solar systems evaporated, and solar's future dimmed.
Fast-forward to 2007: Energy prices are again soaring and remain volatile, and with the perceived threat of global warming, people are once again wondering what they can do to become less dependent on non-renewable fossil fuels.
"My thought process was, if I can produce enough energy on my roof to meet my needs, I want to produce something tangible toward energy independence," said Chuck Dunn, 51, who is installing what will be Tucson's largest residential array of solar panels on a home he's building in the Foothills.
Interest in solar energy seems to be everywhere, from government to commerce to consumers, with new manufacturing and new jobs on Tucson's horizon.
District 8 Congresswoman Gabrielle Giffords, a Demo-crat, has said she wants Southern Arizona to become the "Solar-con Valley" of the United States. She has introduced legislation to promote training a solar-industry work force and to set up an initiative for states to receive money for advancing commercial applications of solar technology.
Arizona Gov. Janet Napolitano has called our state the "Saudi Arabia of solar energy within the United States," and she recently signed legislation to prevent homeowners' associations from restricting the use of solar systems.
15% renewable by 2025
Political attention aside, solar is also gaining steam at the Arizona Corporation Commission, which recently decreed that all utilities must generate 15 percent of the state's energy from renewable resources by 2025. At that time, about 5 percent of the energy must come from solar cells.
That's good news for consumers, who can take advantage of tax credits and rebate programs as utilities scramble to meet that edict. New, possibly better, incentives might be on the way as well.
Tucson Electric Power Co. and other Arizona utilities — including Arizona Public Service Co., the Salt River Project, and Trico and Sulphur Springs Valley electric cooperatives — offer rebates for solar installations. TEP has two residential plans and one non-residential plan in its solar energy program, called SunShare, each worth thousands of dollars (see accompanying information).
With regulators boosting renewables, solar incentives for homeowners could get richer.
TEP plans to file a new Renewable Energy Standard plan in the next few months, said Joe Salkowski, a TEP spokesman. Though the plan isn't finished, it will include an incentive package, he said.
"It might be in people's interest to wait and see what the new program is going to offer. It may be different," Salkowski said.
Then there are tax credits.
The federal government offers a 30 percent credit up to $2,000 for residential consumers who install approved solar electric devices on their homes, with no maximum for commercial users. The same deal is available for people who install solar hot water.
The state of Arizona provides a 25 percent credit for solar devices — with electricity and hot water lumped together — up to $1,000 in addition to the federal government's credit.
Could get half back
With all the tax credits and rebates available, it's possible for an average consumer to get back about half the cost of solar equipment, said Katharine Kent, owner of The Solar Store, which markets and installs solar-energy products.
TEP customer Dunn said he would not have taken on the solar project for his new home without the utility's help with the costs.
Another customer, Dale Keyes, has been on the SunShare plan for a little more than a year. He has a two-kilowatt alternating-current system on the roof of his Midtown home.
Keyes got a substantial discount on the panels thanks to TEP, he said, but taking that discount into consideration and adding another $3,000 in tax credits from the state and the feds, he still spent $8,000.
By staying connected to the TEP grid, Keyes and Dunn both said, the houses still have electricity when the sun goes behind a cloud or at night when there is no sun.
The homes are "net metered," meaning they feed excess energy into the TEP system — in Keyes' case, the meter actually runs backwards when this happens — and then essentially buy the energy back at a discount. And it eliminates the need for batteries to store the energy for when the sun isn't out.
"It has performed above and beyond my expectations," Keyes said. "We've had several people stop and ask us questions" about the system.
Even as consumer and political interest in solar grows, the local solar manufacturing industry is expanding.
Germany-based Solon AG — a maker of solar modules and photovoltaic systems — opened its first U.S. manufacturing plant under the name Solon America in Tucson early this month. Global Solar Energy, a former venture of TEP parent UniSource Energy Corp. now partly owned by Solon, also recently announced expansion plans.
And New York-based Prism Solar Technologies Inc. — which manufactures a new kind of photovoltaic module that uses holographic technology to filter and focus the sun's rays for maximum effect— opened a research and development facility here in June.
Still hurdles ahead
Despite the flurry of activity, solar still faces some hurdles.
"There's tremendous potential in the sun but we are not there yet," said Mike Gleason, chairman of the Arizona Corporation Commission.
Gleason was the sole commissioner who voted against the 2025 mandate, on grounds the technology wasn't mature enough. "When the Wright brothers had their flight at Kitty Hawk, they didn't try to fly the Atlantic with that plane," he said.
The companies that have moved here say more can be done in the way of incentives to bring solar-oriented businesses here, and the rules and breaks for consumers need to be simplified so they're easier to understand.
"Something that's difficult for the customer takes more time to increase the market," said Olaf Koester, president and chief executive officer of Solon America.
Tax credits based on how much renewable energy a company manufactures would help, said Glenn Rosenberg, Prism Solar's chief technology officer in Tucson. And good access to transportation for shipping is important too, he said.
Incentives are what will bring people in, said Larry Kazmerski, director of the national center for photovoltaics at the National Renewable Energy Laboratory.
Kazmerski said the timing is good for Arizona to position itself as a solar capital.
"Arizona really is considered tops in the point of view of technology expertise," he said. "You have a tradition but you also have a future."
Getting started:
For more information on utility solar programs in Southern Arizona:
• TEP/UniSource Energy Services SunShare
The SunShare program is offered by Tucson Electric Power Co. and UniSource Energy Services (a sister company that serves Santa Cruz County): http://www.green watts.com and follow the links to SunShare for the appropriate company. For information by phone, call 745-3100 or toll-free 1-866-253-3690.
• Trico Electric Cooperative SunWatts program: http://www.trico.coop/sunwatts_ information.html; 744-2944.
• Sulphur Springs Valley Electric Cooperative SunWatts: http://www.ssvec.org/programs /energySunWatts.php; 1-520-384-5515.
Other local solar links:
• Tucson Solar Alliance: http://www.solarinstitute.org/ tucson_solar_alliance
• Arizona Solar Center: http://www.azsolarcenter.com
• The Solar Store: http://www. solarstore.com
• Expert Solar Systems: http://www.expertsolar.com
• GeoInnovation: http://www.geoinnovation.com
HOAs and solar
Earlier this month, Gov. Janet Napolitano signed Senate Bill 1254 into law. The bill closed loopholes in previous legislation to prevent homeowner associations from restricting the use of solar panels.
The bill says that despite any provision in community documents, associations can't prohibit the installation or use of a solar-energy device. Associations may adopt "reasonable rules" regarding the placement of the device as long as those rules don't prevent the installation, impair functioning or adversely affect the cost or efficiency of the device.
It's always a good idea to check your HOA's rules, which normally require homeowners to submit designs before adding any improvements.
Comparing costs
Nationwide industry costs for power generation per kilowatt hour, by source:
Coal — 2 to 4 cents.
Natural gas — 5 to 11 cents, varies with the fluctuation in cost of natural gas.
Nuclear — 2 cents, not including upfront costs and disposal costs.
Wind (unsubsidized) — 5 to 11 cents.
Solar — 18 to 80 cents.
Figures provided by TEP from company research. Figures do not represent TEP's costs.
Solar hot water
If the cost of solar photovoltaics seems daunting, you can get your feet wet by starting out with a solar water-heating unit.
The federal government provides a tax credit of up to $2,000 for solar water heaters, separate from the credit given for photovoltaic installations. The maximum $1,000 credit offered by Arizona can be applied to several kinds of systems, including photovoltaics, skylights, pools and water heaters.
Costs can range from $2,000 to $5,000 installed, and payback time for most heaters happens within the first 10 years, according to the Arizona Solar Center.
