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Arizona Solar Center Blog

Commentary from Arizona Solar Center Board Members and invited contributors.

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Why isn't there more solar in Arizona? (redux)

Eleven years ago I wrote a guest editorial for the Arizona Daily Sun newspaper in Flagstaff in which I put forward a question that was quite popular at the time: "Why isn't there more solar in Arizona?"

It was in the aftermath of the California energy crisis.  New incentive programs adopted by Arizona utilities were just starting to kick in, and the popularity of solar energy was beginning to emerge from a decade of stagnation; but still, Arizona's most abundant natural resource had barely been tapped.

In 2002, the solar industry in Arizona was at the beginning of a boom-cycle that continues to this day.  

What we were seeing in the way of solar installations back then was just the first flicker of what was possible.  “The technology is on track to become a permanent part of Arizona's landscape,” I wrote on October 2, 2002.

That comment may be just as appropriate today in 2013 as it was more than a decade ago.

But there may be ominous new storm clouds ahead for the current boom-cycle.  Solar advocates believe that proposed regulatory changes pose a threat to the continued good times for solar businesses and those working in the industry.

The modern solar industry, founded in 1974 following the Arab oil embargo of the previous year, has endured one boom/bust cycle before. From the end of the 1970s through the late 1980s the industry experienced tremendous growth. But as conventional energy became cheaper and incentives disappeared, the solar industry suffered through a down-cycle in the 1990s. That cycle began to reverse itself in the late 1990s and has been on an upward trajectory ever since.

This new boom era was boosted in the beginning by technological advancements, tax credits and utility rebates. But it was net metering policies that substantially increased demand, and dramatic cost reductions followed, pushing the industry to today’s apex.  

From its original niche of remote homes and summer cabins to homes in neighborhoods in every city and town throughout the state, the market exploded. The 1,200 off-grid remote rooftop solar PV systems in 1987 have grown to more than 25,000 grid-tied residential rooftop solar electric systems today.    

But is history about to repeat itself? 

The mainstay of the solar industry during the 1970s and 80s, the solar water heating industry, suffered tremendously when incentives ended and boom turned to bust. A majority of companies went out of business, leaving a number of orphan systems in their wake. 

The favorable incentives and policies that have fueled today’s boom have come under increased scrutiny ever since a utility industry study identified solar energy/distributed energy resources as a potential “game changer” and a disruptive challenge with financial implications for the electric utility business model.  

If fundamental changes to regulatory rules and financial incentives come about, the solar electric industry will have to borrow a page from the solar water heating industry and reinvent itself to survive.

But what about the utility business model? While the report warns of the disruptive challenge of solar, it also states that Kodak and the U.S. Postal Service are examples of what happens when industry leaders fail to adapt to innovation. 

What is preventing utility companies from reinventing themselves and getting in front of the trend toward solar?  The electric utility industry could learn a lesson from AT&T, which successfully made the transition from the old telephone business model to the wireless telephone business.

In 2025 when I look back on this column, I hope that the question will no longer be, "Why isn’t there more solar in Arizona?," but rather, "Which innovators embraced this unique opportunity and grew with it?"

Today's answer to the question of eleven years ago is: There is more solar in Arizona than there used to be, and all indications are there's more to come as long as utility companies continue to be on board with innovation as they have been in the past and embrace the inevitable future of solar energy rather than impede it.

Jim Arwood
Communications Director
Arizona Solar Center

Question:  How can utilities and rooftop solar electric co-exist going forward?  What changes would the utility need to embrace to include solar as a core service? Or, is it the responsibility of the solar industry to change to survive in the utility business model?

[Editor's note: Your expertise and perspective are highly valued – feel free to comment below. You must be registered on the site to comment. Register here. Log in here.]  

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Comments 5

bill wright on Saturday, 14 September 2013 12:46

It is a shame our utility remains steadfast for the status quo. Anyone with the slightest bit of vision would have seen this solar snowball coming. Now their knee jerk reactions threaten to obstruct solar advances to provide jobs, clean up our environment, reduce our reliance on foreign oil that finances terror and is subject to yoyo commodity pricing. what's worse is their insistance on enhancing their monopoly status by adding fees that do nothing to improve the situation but rather harm it. Arzona has always desired class status, along with its abundat sunshine. They have failed in education, the arts, health care and job creation. They have relied on real estate developement, mining and sight seers. Now we have the best resource (the sun) anywhere on earth. It's handed to us on a silver platter and what are doing? Looking a gift horse in the mouth. PATHETIC! We could be one of the wealthiest sates in the union. Get real.

It is a shame our utility remains steadfast for the status quo. Anyone with the slightest bit of vision would have seen this solar snowball coming. Now their knee jerk reactions threaten to obstruct solar advances to provide jobs, clean up our environment, reduce our reliance on foreign oil that finances terror and is subject to yoyo commodity pricing. what's worse is their insistance on enhancing their monopoly status by adding fees that do nothing to improve the situation but rather harm it. Arzona has always desired class status, along with its abundat sunshine. They have failed in education, the arts, health care and job creation. They have relied on real estate developement, mining and sight seers. Now we have the best resource (the sun) anywhere on earth. It's handed to us on a silver platter and what are doing? Looking a gift horse in the mouth. PATHETIC! We could be one of the wealthiest sates in the union. Get real.
Jim Stack on Sunday, 15 September 2013 08:03

Simple, just end the subsidies for COAL, NG and Nuclear and everyone will change. If utilities start working with consumers and can profit from the reduction is use like they do in California they will see profit in getting all of us to be more efficient and work within the Time Of Day pricing. So we needs the rules changed to benefit all of us.

Simple, just end the subsidies for COAL, NG and Nuclear and everyone will change. If utilities start working with consumers and can profit from the reduction is use like they do in California they will see profit in getting all of us to be more efficient and work within the Time Of Day pricing. So we needs the rules changed to benefit all of us.
Guest - Robert Smith on Monday, 16 September 2013 10:38

as a owner of a small solar system I am doing my part to help the state in using what God has giving us the SUN and a lot of it, and now to let APS turn the table and take away any incentive for the small solar producers to use what is free by charging them a fee for line use, is nothing short of crazy first most of these people have paid for years into the power grid, and then to punish them for spending the money to buy or lease a solar system which we all know are not cheap, while I do not use APS if they are allowed to get away with this the other big power producer will follow suit as soon as they can come up with a viable excuse and if this is allowed it will take most of us small solar farmers from saving money back to spending money every month, I did not purchase a solar system to make money from incentives at the end of the year but to the environment but with only a small saving on my electric bill now if the power companies are allowed to charge a line fee this would wipe out any saving that I get from my solar system forcing me to go back to the grid and putting a strain on the grid by using their electric, I do not believe for one second that there is any reason for this other than they see another chance to make more money from a growing industry which if allowed could put them out of business, And I for one will not shed one single tear

as a owner of a small solar system I am doing my part to help the state in using what God has giving us the SUN and a lot of it, and now to let APS turn the table and take away any incentive for the small solar producers to use what is free by charging them a fee for line use, is nothing short of crazy first most of these people have paid for years into the power grid, and then to punish them for spending the money to buy or lease a solar system which we all know are not cheap, while I do not use APS if they are allowed to get away with this the other big power producer will follow suit as soon as they can come up with a viable excuse and if this is allowed it will take most of us small solar farmers from saving money back to spending money every month, I did not purchase a solar system to make money from incentives at the end of the year but to the environment but with only a small saving on my electric bill now if the power companies are allowed to charge a line fee this would wipe out any saving that I get from my solar system forcing me to go back to the grid and putting a strain on the grid by using their electric, I do not believe for one second that there is any reason for this other than they see another chance to make more money from a growing industry which if allowed could put them out of business, And I for one will not shed one single tear
James Pitre on Wednesday, 18 September 2013 20:27

Let's not forget that our utility companies are monopolies and they have opted to be in a business that is to be operated for the benefit of their customers and are subject to strict regulation to ensure that the best interests of the citizens they serve are looked after.
They (APS) is proposing to work in ways contrary to our collective interest is not an option and our Corporation Commission (and politicians) must be held to account.
Jim

Let's not forget that our utility companies are monopolies and they have opted to be in a business that is to be operated for the benefit of their customers and are subject to strict regulation to ensure that the best interests of the citizens they serve are looked after. They (APS) is proposing to work in ways contrary to our collective interest is not an option and our Corporation Commission (and politicians) must be held to account. Jim
Adam Bruce on Thursday, 19 September 2013 13:42

Hi Jim! Funny, but not surprising to run into you here. I agree, the "Utility Industrial Complex" - if you will- is a real problem that is showing it's teeth to the solar industry. While big government has it's drawbacks, I believe that energy (ultimately security) is a case where there should be no profit that competes with advancement so directly. I was amazed to see what has been happening in Germany and Scandinavia this summer. As far as energy is concerned, it seems that a "highly involved" government has really been able to bolster the energy industry to new, sustainable heights in Northern Europe.
Adam

Hi Jim! Funny, but not surprising to run into you here. I agree, the "Utility Industrial Complex" - if you will- is a real problem that is showing it's teeth to the solar industry. While big government has it's drawbacks, I believe that energy (ultimately security) is a case where there should be no profit that competes with advancement so directly. I was amazed to see what has been happening in Germany and Scandinavia this summer. As far as energy is concerned, it seems that a "highly involved" government has really been able to bolster the energy industry to new, sustainable heights in Northern Europe. Adam
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