Arizona utilities continue to roll out projects to use renewable resources such as solar, wind and biomass, but the state lags far behind the nation as a whole in the use of renewable energy sources to produce electricity.
While the United States overall is obtaining about 2.3 percent of its electric power from nonhydro renewable sources, the equivalent figure for Arizona is only 1 percent, according the Arizona Department of Commerce Energy Office.
Arizona, it seems, is on the horns of a dilemma. Wind power is the least expensive of the alternative energy sources — almost competitive today with natural gas power plants — but Arizona has relatively mild breezes. Arizona does have lots of sunshine, but solar energy remains one of the more expensive renewable technologies.
Combine that with the state’s budget problems plus the alternative fuels fiasco of 2000, which has made the Arizona Legislature shy about aggressively promoting alternative energy, and it’s not surprising that Arizona is below the national average, said Ken Clark, director of the energy office.
"In the budgetary climate we have now, there is not a whole lot more you can do in terms of solar," he said.
Gov. Janet Napolitano has been trying to advance the cause of alternative energy. Last year she appointed a Renewable Energy and Energy Efficiency Working Group, which has drafted a set of recommendations on how the state can achieve a more diverse generating mix.
Among its recommendations are that state buildings, including schools, meet 5 percent of their energy needs from green sources by 2012 — if the economics are reasonable.
Group chairman Stephen Ahearn said the state should also coordinate with the Western Governors Association to help meet its ambitious goals to develop 30,000 megawatts of clean energy in the West by 2015 and improve energy efficiency by 20 percent by 2020.
For example, he said New Mexico has wind- energ y resources that it wants to sell to California, and Arizona with it geographic position between the two can play a role in planning that.
But with the state and federal government already offering some tax credits for solar energy, Ahearn said economics remains a constraint in devising further alternativeenergy incentives.
"There was an assumption (among members of the working group) that if it required a significant tax, it would be nonstarter. Even the most ambitious folks recognized that."
The Arizona Corporation Commission has tried to jump start renewable energy by requiring utilities to obtain some of their electricity from sustainable sources. The standard is 1.1 percent by 2007, and the commission is considering increasing that to 5 percent by 2015 and 15 percent by 2025.
Commission rules also allow utilities to add a .08 cents per kilowatt /hour charge to consumer bills to pay for the added cost of alternative energy.
The requirement has prodded Arizona utilities to invest in a wide range of renewable energy projects, including some in the East Valley. Among the programs that have been launched are construction of solar power plants, photovoltaic and thermal heating; wind power farms; biomass plants that burn wood waste; geothermal; and capturing methane gas from landfills.
In one of the more creative proposals, Arizona Public Service is studying the possibility of making methane gas from manure collected from feedlots around Casa Grande. Peter Johnston, APS manager for technology development, figures as much as 40 megawatts of electricity could be generated from that source in a few years. A megawatt can power 250 homes.
"We’re calling it our Moovable Energy Project," he said.
All this activity amounts to only a tiny fraction of the total electricity consumed in Arizona, and Johnston said APS is not meeting the corporation commission’s renewableenergy standards. The main reason is the surcharge doesn’t raise enough money to pay for all of the projects that are needed to meet the goals, he said.
Johnston added that customers aren’t anxious to voluntarily pay more for green energy, even though they say they are.
"According to our studies, 80 percent say they would accept a certain surcharge. But when you get down to asking for actual money, the 80 percent goes down to about 1 percent," he said. "A lot of them feel their bills are high enough."
Heather Murphy, a spokeswoman for the corporation commission, said the board never intended the surcharge to cover the entire cost of renewable energy. By providing partial funding, however, the commissioners still hope to expand the market for renewables and bring their cost down over time, she said.
Alternative energy advocates believe far more could be done to stimulate renewable energy use.
Lane Garrett, president to ETA Engineering, a Tempebase company that makes solar components and instruments, said if the same government incentives were offered for alternatives as for traditional fuels, solar would be cost competitive today. He cited fossil-fuel depletion allowances and federal insurance for nuclear plants as ways that nonrenewable energy is subsidized.
Also he said the hidden costs of fossil fuels, such as pollution and health costs, should be figured into price comparisons.
"We need to price electricity realistically and level the playing field," he said.
But the best hope for renewable energy in Arizona may come from the private sector rather than governments. The cost of alternatives continues to drop as major corporations ramp up production and improve economies of scale for solar cells, wind turbines and other technologies. Multinational companies, many based in Japan, are entering the photovoltaic business, for example, increasing production by 30 percent a year and driving down costs. One of those companies, Kyocera Solar, operates its American headquarters in Scottsdale.
"Even skeptics in the utility industry say solar will be competitive within five to 10 years," Clark said. "I say it will be in the next one to five years."