Arizona Needs Solar Utilities

Arizona is a solar powerhouse featuring nearly 300 days of sunshine a year, as well as a national leader in capacity per capita. It also houses an international industry heavyweight in First Solar, whose even-keeled quarterly earnings report last week wrapped up an explosive February for a sunshine sector going supernova.

Yet protracted and unnecessary turf battles for utility and residential control of the state’s solar bounty could stall governor Jan Brewer’s recently released Arizona’s “master energy plan” emPOWER Arizona (PDF), which promises to lay down a resilient foundation for its globally warmed future.

Last month, energy and renewable industry officials alike converged in a “collaboratory” to discuss Brewer’s 20-year blueprint at the fourth annual Arizona Solar Summit, sponsored by NRG Energy, which itself was part of the wider Sustainability Solutions Festival launched by Arizona State University and the Walton Family Foundation. It served as a platform for Governor Brewer’s office “to present a clear understanding that the state’s new energy plan places the highest priority on solar energy market development together with her dedication for creating a pro business environment to help achieve this objective,” ASU Office of Knowledge Enterprise Development economic adviser Todd Hardy told SolarEnergy.

Brewer’s first priority for both her master energy plan as well as its brainstorm forums seems concerned with first getting Arizona’s powerful solar house in order.

“This venue helps put everyone on the same page so that we can work together,” Brewer’s office of energy policy director Leisa Brug told SolarEnergy. “In my view, as a speaker and attendee, The Solar Summit always offers a good exchange of information among industry experts, and people who care about moving Arizona forward in the development of solar energy.”

As Brug noted, Arizona’s solar momentum is significant. First Solar, one of the few industry players with more revenue than debt on its balance sheets, is firmly rooted in the state’s bright backyard. Apple is soon opening a massive manufacturing facility with the lofty goal of running entirely on renewable energy. Future plans to build on previous accomplishments are rolling up, as America’s interstate energy infrastructure evolves to deal with more hyperlocal disruptions.

“Arizona has a two-year track record of helping to streamline the permitting process on residential and commercial levels,” Brug explained. “The next step is to streamline the process for utility-scale solar development by working with the Arizona State Land Department to improve and use an interactive mapping website to identify state trust lands where solar may be economically viable. In the event that California may increase their renewable energy standard, we want Arizona to be in a position to produce utility-scale solar power in a cost-effective and timely way.”

To do that, Arizona first needs to deal, evenhandedly and realistically, with net metering. Its solar market noticeably cooled after numbers were crunched on the solar fee Arizona Public Service, the state’s largest utility, started charging new adopters whose panel installations and homegrown energy are arguably providing Arizona with its real public service.

“Due to the Arizona Constitution, net metering remains an issue with Arizona utilities and the Arizona Corporation Commission,” Brug told SolarEnergy. “The Residential Utility Consumer Office, a state agency, played a great role last year in helping to moderate the issue, but jurisdiction, in this case, lies with the Corporation Commission.”

“Not withstanding the current reluctance by Arizona utilities to aggressively promote rooftop solar installations, two factors made apparent in the Summit panel presentations point to a way forward,” Hardy said. “First, overwhelming consumer support for customer-sited solar energy systems will help drive new policy changes. Second, other regional utilities are moving ahead with new business plans built around modernizing the grid using the benefits of solar. A win/win strategy for both the companies and their customers is possible.”

Time will tell whether net metering is a present irritant for powerful utilities or the renewable infrastructure that is coming to replace it. It’s not just Arizona utilities that are facing headwinds. Analysts at Goldman Sachs and other investment overlords threw a sell rating on First Solar, which primarily builds utility-scale solar farms, after its fourth-quarter earnings report last week failed to resolve concerns over the “challenging U.S. growth outlook for large-scale utility projects.” Those concerns weren’t limited to Arizona either: Morgan Stanley complained that First Solar’s “current price still assumes a large degree of profitable international growth, which remains highly uncertain.”

Of course, First Solar’s share price is nearly triple what it was in mid-2012, so the game that truly matters is the one that is coming. Like First Solar, emPOWER Arizona’s first goal “keep Arizona as a serious player‚Ķis to increase solar development,” Brug told SolarEnergy. To do that, Gov. Brewer will eventually need to chart a shining way forward for utilities and customers, rather than a road back to a past where dissension over who owns Arizona’s solar power has its only sustainable place.

“The state with strong technology research and development programs aimed at decarbonizing our energy system, and developing market strategies for meeting this challenge, stands to gain huge economic benefits with any national policy that limits fossil fired generation,” concluded Hardy.

This article appeared at Solar Energy