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By Monica Alonzo
By Stephen Lemons
By Jason P. Woodbury
By Dulce Paloma Baltazar Pedraza
By Ray Stern
By Pete Kotz
By Monica Alonzo
By New Times
Neither do many companies.
Without the subsidies and government mandate, the solar boom now seen in Arizona would fizzle.
The incentives are intended to spur research and innovation that will make them unnecessary at some point. Meantime, the state is generating less solar power because of the way the handouts are distributed.
The 2006 state mandate requires that 25 percent of the renewable-energy programs run by utilities come from solar panels installed at Arizona homes and businesses.
Yet there's a common-sense fallacy to the system, if the goal is to produce more solar power overall: residential rooftop installations are less efficient, for the money invested, than large-scale commercial solar plants. The Solar Energy Industries Association reported earlier this year that average residential installations are priced at about $5 to $6 per watt, while utility-scale installations cost under $3 per watt.
In other words, about twice as much solar power could be generated for the same price if the money spent on home units went toward commercial-scale projects.
Not only are the homeowner subsidies enabling pricier energy, but the high, upfront costs of solar installation, even after subtracting the incentives, means people of lesser means often can't participate in the giveaway.
Arizona has received about $315 million from a federal program that provides a 30 percent discount off the installation of renewable-energy projects. About a third of that has gone to solar projects, while most of the rest has gone into windmills, which produce power 24 hours a day in windy areas. The 30 percent program is scheduled to be reduced to 10 percent by 2017, but industry lobbyists, including those with the national Solar Energy Industries Association, hope it will be extended.
Besides the federal incentive, the state and the utilities help make these solar deals even sweeter with direct and indirect subsidies.
Last year, for example, APS shelled out $53 million in residential "incentives" and $12 million in non-residential ones. To pay for these subsidies, APS hit its customers with a surcharge. In 2012, all residential customers paid a maximum surcharge of $3.84 in their monthly bills. (It's not a flat fee: Households that consume low energy pay slightly less.)
"The rooftop installers worked to get themselves included in the renewable-energy standard, and they have a nice carve-out," says Gary Pierce, chairman of the five-member Arizona Corporation Commission. "That's the most significant part that people pay in the surcharge on bills. The lion's share goes to rooftop."
This will change in coming years. The $12 million for non-residential solar installations will be paid each year for the next 10, while the direct, upfront incentives for home systems already are getting scaled back. APS went from paying solar buyers $3 per installed watt of solar power in 2009 (that's $18,000 for a 6,000-watt system) to the current 10 cents per watt.
All APS customers, though, will continue to pay the surcharge.
Whether the subsidies for solar panels benefit the public at large is debatable, but there's no question that some individual customers have benefited greatly.
John Beavers of Mesa says he paid about $7,200 after subtracting the subsidies for the rooftop panels installed atop his home in 2010, an amount he figures will be paid off by power-bill savings in about four years. Beavers is an electrical contractor and believes his know-how helped him get a better deal. Plus, he's an energy miser in his 2,900-square-foot house; he keeps the thermostat set at a tepid 81 degrees in summer. His hot-weather bills have dropped by 20 percent, he says, and "I pay nothing in the winter."
Experts recommend that homeowners interested in solar obtain at least three bids from solar companies because the prices vary so widely. Beavers says he obtained five.
Investing in solar should be considered like any other investment, says Hank Peck, a Tucson financial analyst. Occasionally, when clients mention they're looking at plunking down 10 or 15 grand on solar panels, he first directs them to examine "all other areas of financial planning."
He advises them to pay off any consumer debt, like credit cards or vehicle loans, before investing much money in solar panels, because otherwise anything saved from the panels in utility costs is offset by interest on the unpaid debts. If a household's financial affairs are in order (retirement plans in place, kids' college-savings funds begun) and the client plans to stay in their home for many years, Peck says, "I say great, go ahead."
Before they buy, solar customers need a roof that will last at least as long as the solar system on top — or else they'll spend thousands more taking it down, then putting it back up on a new roof. Customers also may want to consult a roofing company before embarking, because if the solar company mounts the system poorly, the roof could leak.
Leased systems, in which homeowners don't own the equipment on their roofs, also have become popular. California-based Solar City, one of the biggest installers in the country, with five outlets in Arizona, advertises a plan in which customers pay nothing down and receive benefits from their energy savings immediately. Such something-for-nothing plans rely on the hefty subsidies to work. This year, Consumer Reports advised people to be wary of solar marketing that sounds too good to be true, calling it one of the country's biggest modern scams.
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The comments following this article pretty much shows Solar is still a reach or the facility built in Mesa woud still be in operation. It was out of business before it started. The next utility investigation should be into how Arizona electric utilities are hiding derivative losses (their personal poker game) that they now want to pass-on to their customers because it was supposed to make energy cheaper by reducing the cost of their generation mix. How did that work out? Or hope for some legislation that will erase the accounts and forgive mark-to-market.
Link to article from publication that is tuned towards those looking to make good use of their money. And wouldn't you know it.... installing a solar system may be just that, a smart use for our money.
I read your article with interest, but you missed a way to use solar power to generate electricity without any pollution, Hydrogen. A solar farm is built which uses its power to "crack" water into hydrogen and oxygen. The oxygen is released and the hydrogen is stored on site. Hydrogen is flammable, so it would need stored below ground (under the solar farm) and guarded. This hydrogen would be burned by gas turbines on site to produce electricity and water, the water exhaust can be "cracked" again to restart the pollution free cycle. The only input is free solar power. The solar farm would be sized to produce and store enough hydrogen during "good" days to allow the plant to operate at night and in poor weather. You now have free power running through the existing grid made with conventional technology and no pollution! What a deal.
I'm very disappointed that, having taken several days to compose a thoughtful and insightful reply to Mr. Stern's article, the software here refuses to accept it. I have made sure that it is within the maximum word limit (I broke it down into two parts) and when I hit "Post comment" the spinning dots icon spins forever but never finishes. The comment is never posted and there is no error message given. I sent Mr. Stern a copy and asked him to assist but have received no reply from him. Perhaps there is some imbedded code but if so I did not add it and do not know how to remove it. I have tried changing to plaintext from rich text in the composition window but cannot get the comment or any significant fraction of it to post, despite having spent two days now in the attempt.
What a ridiculous hatched job. I hope no one actually believes this collection of fossil fuel industry talking points. You take even a half of the money this country's taxpayers spend subsidizing the fossil fuel -- including the money dumped into on never-ending warfare to secure access to fossil fuel (in the name of subduing "terrorists") -- and spend it on solar, and solar panels would be on every roof for free, contributing significantly to energy savings and use. What this author fails to take into account is the social costs of the use of fossil fuels, the 10s if not 100s of thousands who suffer or die from respiratory diseases each year because of air pollution, or the ongoing degradation of our lands and oceans from drilling and transporting oil. Industry, of course, profits by pushing such costs onto society and getting hacks like this author to ignore such costs.
I invite the author and all you readers to attend a special event on January 24th at the AZ Science Center:
The Future of Energy: Brown, Clean, or In-Between
5 to 6pm: members of the AZ Energy Consortium will showcase their sustainable solutions at a Happy Hour reception
6 to 7:30pm: ASU President Michael Crow will introduce American Public Media's Sustainability Desk Reporter Eve Troeh (who moderates), Director of Carbon Nation, Peter Byck, SoS Professor, former Prez of Shell Oil John Hofmiester, and Stanford energy scientist Mark Jacobson.
7:30 to 8:15: Catered Reception
YOU MUST RSVP!
I have to disagree with the statement that there is only 1 company left from the '80s solar era. When I replaced my solar hot water system installed in 1984, I found a plumbing company that was around in 1986 doing solar. Yes, surviving was difficult but he made it.
The other reason that solar has been so expensive to install is the outrageous prices these companies have assigned to these systems. It is called "greed". They charge as much as possible so when the rebates disappear....again many of these solar companies disappear...never to be heard from again.
It is a pity that the author did little to no research for parts of this article. The solar power plant in Gila Bend does have storage capacity. It stores thermal energy using molten salts. It will still be able to operate at night and cloudy days. Oh, and it uses Concentrating Solar Power (CSP) technology, which does not use photovoltaic cells. It uses parabolic mirror troughs instead. This technology has been around for a while, pity that the author did not bother looking it up. It is even described on the APS site:
"Even with all the gnashing of teeth over climate change..." - sounds like something a denier would say. Stern should tell us if he accepts the science of climate change or not.
Mr. Stern is either extremely ignorant or highly biased against solar
energy--perhaps both. The comment about large scale solar farms being
less expensive than small rooftop installations conveniently ignored the
difficulty with permitting, the cost, and the significant power losses
associated with transmission which accompany utility scale solar
plants. It almost sounded as if a utility representative wrote this
part of the article, since utilities do not favor a distributed
generation model that causes them to lose their control over power
The comments on fracking and natural gas
production were similarly misleading. Looking only at current prices
for natural gas is a mistake--and solar energy is a perfect hedge
against future price increases of any fuel source. Once a solar
installation is paid for the energy is truly free for the 20 to 25 year
lifetime of the project. And ignoring for the moment the environmental
problems with extraction, the prices of natural gas, coal and other fuel
sources will most certainly increase in the future. If we are truly
interested in finding power solutions for the future we must go where
the power is. Our solar resource dwarfs all other power sources
combined. The energy contained in all known petroleum reserves on earth
hits the earth every 15 hours in the form of solar energy.
Great article. The truth hurts - solar energy can't generate power at night and batteries are NOT a green solution. Until solar can exist without taxpayer subsidies more research is needed to optimize solar and make it more affordable. I actually like the de-centralized approach. Why waste energy delivering it over costly power lines?
My system covered all my power needs and provided enough extra power to set me up for operating an electric car about 10,000 miles a year. Mr. Stern doesn't have all of his facts straight and citing anonymous experts as sources is high school grade research, and amateurish at best.
Roof top solar makes sense for everyone who owns their home, and leasing a system makes one affordable for anyone with a decent credit score who pays an electric bill. I worked on a nuclear power plant and am a fan of generating energy by smashing atoms, however I would not want to see one near my children's school. Which is exactly where we are seeing quite a few solar panels being installed, over the playground at our children's schools.
His argument regarding grid parity is also lame as the cost of a new coal or natural gas fired plant does not take into account the increase to our health care costs caused by all of breathing the crap that flows from the smoke stacks. Nor does it take into account the socialized costs of extraction practices, including the subsidies provided to the extraction companies.
it seems that there are some mistakes made in this article as well. The fact that APS didn't store any energy. Most people don't use much power during the day (just stuff that runs all the time, IE freezers, fridges, climate control, etc.. ) while they are at work. By collecting solar power during the day it would be a great way to store this energy in batteries. Also it could be sold back to the electric company, something I have been led to believe APS doesn't do. In other states people do this and have zero electric bills AND they make lots of money. (of course you have to remember THAT they did have to pay for installation, and it's not according to APS one should do themselves, so they gouge you even more)
AZ should have a requirement that EVERY new home has solar panels on it built in as part of the cost. Furthermore if we were serious it would require every new lone applicant to put them on as well. Yes maybe I am a little hardcore, but I think it would help with our energy independence. BTW if we reduced the amounts of fuels burnt to create electricity we could reduce all kinds of negative things. No offense Ray but I think you need to understand basically how solar power works before you bash it so much.
This article is embarrassingly bad for the New Times because it contains some critical mistakes based on flawed information, terrible analysis, and lazy reporting.
First, let's analyze the unsubsidized financial benefits of solar PV. I have a 5.0 kW PV system which cost $25,000 in 2010. I generated 9,438 kWh last year and sold it to SRP at a rate of $0.11/kWh (average annual rate on my Residential Basic Plan). Based on those facts, I made $1,038 for an annual return of 4.15% without any subsidies. There were few (if any) safe investments which made that rate of return last year. Savings accounts were at 0.12% and long term government bonds were only in the 3% range. My annual return on investment is highly likely to increase as the price of electricity increases over the 20 year life of the system. Hank Peck, the Tucson financial analyst, should start recommending that all of his clients invest in solar PV based on that rate of return on investment alone.
But, wait, it gets better!
Second, let's analyze my actual, subsidized financial benefits of solar PV. Starting with the 5.0 kW system, SRP paid me $2.70/W ($13,500 total) in 2010 for the lifetime rights to use the carbon dioxide reductions the system creates to offset the environmental impact of their other power generation activities. That lowered my initial cost to $11,500. I received a Federal tax credit of 30% ($3,450) on that amount which lower my expenditure to $8,050. Then, I took a $1,000 State tax credit to lower my out-of-pocket cost for the entire system to $7,050. When we analyze my actual annual return on investment, I'm making 14.72% ($1,038 / $7,050). There is not a safe investment (guaranteed for the next 20 years) which I know of that can even come close to that. If you know of one, I'd love to hear about it.
SOLAR PV WAS THE BEST INVESTMENT I EVER MADE.
Third, for those who like to analyze payback times, I get my initial investment back in 6.8 years. After that, everything I generate is pure profit for the next 13.2 years. There is no maintenance on the system and the components are warrantied.
Fourth, I pay for line maintenance and other SRP infrastructure costs just like everyone else does in my monthly service charge of $17.00 plus tax. Solar PV system owners do not get a free ride on those costs as the author implies. In fact, that is my only cost each month because I currently generate more electricity than I use but I still have to pay the monthly service charge.
Fifth, my system generates its largest amounts of power in June, July and August when the demand in Phoenix is at its highest. I am actually doing SRP a huge favor selling them power at $0.1283/kWh during that time period because they may pay higher rates to produce or buy that power from other sources. For those of you on EZ-3 time-of-use plans, you will pay $0.3499/kWh for peak power in July and August. SRP buys it from me at $0.1283/kWh during that time frame. This means that hypothetically they make $0.2216/kWh (the difference) on every kWh they buy from me and sell to you. I would prefer to sell my kWh on an open market to capture that profit myself, but I understand that SRP provides me with a reliable service and that I do not have the leverage as a micro-producer to negotiate better terms for myself.
Finally, no power production system operates 24/7/365. The idea that solar electricity is inherently flawed because it can't generate power all of the time (i.e., at night) is an absurd assertion. Palo Verde Nuclear Power Plant has 3 generators. At any given time, one of those three is off line for regularly schedule refueling and maintenance. Using the author's irrational thinking, he would have to argue that the full nuclear power from that facility is not available 33% of the time. That's not how electrical systems are designed and operated. Palo Verde was designed with this down time in mind. Solar PV systems need to be considered as part of the same electrical ecosystem that is designed and operated with the knowledge that certain power sources will not be available at certain times. That's it the way these systems have always been designed.
If you have never considered solar PV before, I strongly recommend it. You'll be making money and saving the planet at the same time. It doesn't get any better that that.
It's only hard when you skew the reporting towards that conclusion.
For example, the title is deceiving. Solar Power is THE MOST used
energy source on the Planet right now. We grow all of our plants using
it. Could you imagine the cost of growing all the plants on the Earth
if we were to generate the electricity to run electric lights? Yet we
don't hear that cost savings in the calculations of the reporter. How
about the light we use to operate our lives under - what's the
replacement cost for that using fossil fuels? It's the way we think
about it - economics is a sad science because it only counts what we buy
and sell, not what we have or will have in the future. But this
reporter doesn't even say that's what he's doing - skewing the
information to favor carbon based fuels and nuclear power. But there is
as clear as the nose on your face. Each individual has the
ability to build a solar cooker for less than $15.00 in material costs
which will substitute for all the energy needed to cook their food and
pasteurize their water:
The report doesn't talk about that because it doesn't fit into his image
he's trying to make you see - not the world as it is. This reporter has
done this countless times when he feels that he doesn't like something -
he throws his own bias into it. For less than $500.00 one can
build a simple solar water heater or solar trombe wall which will heat
your home and your water. But he doesn't want to talk about that.
Nor does he want to talk about a solar trombe wall or in fact all the energy SAVED due to conservation legislation passed since 1970 or the massive savings of energy which could result in further building code improvements regarding energy efficiency and passive solar which could be implemented within the next 2 years! He wants to slam one type of solar energy production so the other forms, passive and active are not pursued to their fullest extent.
Yeah not having batteries to store the power was a genius move. I know several homeowners in Tucson who sell their excess energy back to the power companies...this article is garbage.
@sesmithwrites Photovoltaics on roofs are spreading steadily here in HI, but it is an expensive initial outlay (although rebates kick in)
@sesmithwrites we've considered but yes, it is a serious $ up front investment that majority of americans cannot afford. =(
This article is really hard on solar, but much of it is true. Sounds like Arizona didn't do their homework before setting up their solar projects. Yes, solar is not cheap. I've looked into going solar, and there is just no way for most of the energy needs of a family home. I put a 500w panel on my tool shed, and it provides lights for my shed and yard. Since there is no electricity run to the shed, solar was easy. BUT...can't run power tools and such. A solar plant that would run my home would run about $30k for a minimal system. But remember, your solar power requires batteries to be used at any time other than bright daylight. So I calculated what I would need to have enough power to go 1 week with cloudy days and little sun. O.M.F.G... Besides the cost of the batteries, I'll need a building larger than my home (1300 sq. ft.) to house the batteries and invertors and such. Well, maybe I'll go solar when I win the lottery. In the meantime, using DC power for lighting my shed is working great, and I'm going to do something similar for outside lighting for my home. But I simply cannot replace the power company. Yet.
This author's time would be better spent writing about what will happen to Phoenix and the rest of Arizona when the Colorado River dries up. The source of your electricity will seem meaningless when you have no water. You will get a preview in the summer of 2013.
This is an ignorant article written by someone who knows nothing about solar. Arizona needs to give government money to homeowners instead if building pointless solar farms that cost a fraction only so they can pocket the rest of he government money. Arizona is the problem, not solar power.
I guess we were pretty naive, thinking our rooftop system would make much of a difference. It looks like our best chance of having any impact is making better choices to reduce our energy usage. Thanks for this in-depth look at the solar industry.
The real answer to this is a truly balanced power system. Solar for sunny days, wind for windy times, geothermal where it is accessible, same with tidal, and no matter what people want to hear-nuclear. Nuke power is not as "dirty" as people think. We have the paranoia of the Cold War and the 'scare movies' fromt he 40's sci-fi into the modern era to thank for that. Yes, there CAN be accidents, but there are also dam breaks. The point is that if we have a balanced grid, we can eliminate stuff like coal completely, and maybe even free up some of our rivers, using dams for drinking water purposes only.
If we balance it out with the previously mentioned items, that would reduce the need for nuke plants would also be reduced.
My home is 100% solar and wind powered. Why because it makes economic sense. It would have cost me 1/2 million to connect to the grid.
Home installations with batteries do not make sense in the valley. I ran the numbers and found that my kids savings account had a better return on investment.
It would be possible if the Corporation Commission would force the power companies to purchase surplus power at a reasonable whole sale price rather than the artificially low prices which are currently in effect. They should eliminate the spurious fees which they apply to residential tie ins.
The main problem, like electric cars, is the storage system. We currently do not have electrical storage systems which can power us through the night.
By the way, you parochials, your box on the sign-in; it only accepts AMERICAN Zip codes: what's the use of that?
@harlotsghostWhere is Stern on this investigation? This is where the rubber meets the road Ray, come on!
@eichermc Actually, the best way to generate electricity from solar is by using the sun's heat; it's old and proven technology. Look into the solar experiments (and actual generating plants) built outside Barstow, California in the Mohave desert. That is what should be built; it's about as close to a baseline system from solar as you can get. With the proper working fluid in the heat exchange system, it will run through the night and on cloudy days. Other than that, it's more or less basic steam turbine electricity generation technology, something well known and understood for many decades now.
@918zzzthor Hi. The story doesn't say there was only one company from the 80s solar era. It says that out of a list of Valley solar companies published by the state in 1984, I could only find one that was still in business. That was J&R. Thanks.
@desertbird This whole article seems like a half-hearted attempt to discredit solar power. Note that there is no discussion about the free rides taxpayers have been giving to gas and oil companies who generate billions of dollars in profit yearly. How long have those industries been around for again?
@curtshannon Nope -- neither ignorant nor biased against solar power. Just interested in getting the real story.
A utility rep didn't write this article, Curt. But I must say that your letter reads as if it was written by the former owner of a renewable energy consulting business. Are you same the Curt Shannon of Arizona who owned Conation Energy?Large scale solar farms are, in fact, less expensive than similarly sized rooftop projects, so what's your point? I agree that looking only at current prices of natural gas could be a mistake, which is why my story didn't do that. The price of natural gas and NG power stations could go up or down in the future, obviously
@ddoyle525 All energy is subsidized. Fossil fuels are heavily subsidized, plus taxpayers spend billions if not trillions more on permanent warfare the main purpose of which is to secure access to more fossil fuels (war on "terrorists" - hah!). A principal difference is that the subsidies toward fossil fuel pays for more pollution, more destruction of public lands, more destruction of the oceans' viability. Very short-sighted. Solar, in contrast, is clean energy. That said, your position is not unique -- 19th century thinking is very popular these days among Americans.
@ptcgaz FYI -- The article states that APS doesn't "store" the electricity it generates from the PV plants it built, and you imply here that is not correct. It is correct. Ray
@D.P.Johnson Thank you - I am at a loss as to why Ray Stern keeps writing these obviously error ridden articles about renewable energy. I'm guessing he's one of those anti-hippies that can't accept anything with a hint of patchouli about it.
@fairymagic13 I built a solar cooking using mostly trash; mainly cardboard, newspaper, and glass from a dumpster. About my "investment" was some duct tape and glue to hold it together. I used a reflector shade from my car to reflect extra sun into it. Managed to make beans, rice, and cornbread in it.
@Grumpy0ldMan - Robery Anson Hienlein - AKA Anson McDonald.
@Mikey1969 The amount of energy needed to mine, process and transport the fuel for nuclear power is enormous and is NEVER accounted for in the minds of the proponents of this type of energy. That said, the amount of energy needed to STORE the spent fuel for over 10000 years, dwarfs that of the energy produced during a plant's 40 year life span. Nuclear energy is an EVIL power source and should be discontinued immediately.
@bgray59 QUOTE:Home installations with batteries do not make sense in the valley. I ran the numbers and found that my kids savings account had a better return on investment. /QUOTEYou either calculated it wrong or don't have the know how or know where to acquire the materials cheap enough, because its working over here great and will for then next 20 years before panels deteriorate and 40-50 before the batteries need replaced! Off the grid and homeowner installed!
@ronchand Sorry about that, Ronchand.
@fairymagic13 the reason is simple: those monopolies in power want to maintain the status quo and will hire people to generate propaganda that fits their needs, the carbon club is a trillion $ business, they will not give up without a fight. The Arizona corporation commission is now owned by the carbon club and they can hardly wait to derail solar in Arizona.This is just the start. Buy solar and buy an electric car, change the game.
@fairymagic13 Yep. I also think there's a lot of anxious masculinity underlying it. Fossil fuels and nuclear are manly while renewables are feminized and remind them of their nagging mothers.
@Critical @bgray59 Please send me the brand of batteries which will last 40 to 50 years. The best I have seen are an older style lead acid glass battery which lasted 20 years. The problem is they are delicate and not good for use except in a carefully controlled environment.
The system I evaluated was a grid tied no battery system. Interest rate on the money was 9%. the output was from the savings of electric during daylight hours. This data was taken from our electric usage which we had recorded over a three year period. The fees charged by the utility, the special switching gear required by the utility but not included in the installation. The switching gear had to be purchased from and installed by the Utility. I amortized the whole thing using projected electric price increases. Had the data analysed by an actuary I Know and he felt my estimates were overly optimistic.