Jul 14 2010

The Arizona Challenge

Posted by: Jonathan Marshall

For the last week, temperatures in Phoenix averaged around 110F—reason enough to believe in global warming and to avoid central Arizona in the summer.

But you’ve got to admit, the place is a natural for solar energy. In fact, according to the National Renewable Energy Laboratory, Arizona has more solar generation potential than any other state, including California.

More than a few big solar companies have already figured that out. In fact, the world’s largest producer of solar photovoltaic panels, First Solar, is based in Arizona.

At today’s Intersolar conference in San Francisco, just after listening to a research report on the PV industry, I got stuck listening to a marketing pitch by the head of the Greater Phoenix Economic Council. At first, I hardly listened. But when I heard him declare that solar is “the most important industry in the state”—apparently ahead of tourism, retirement living and baseball in his priorities—my ears pricked up.

As Barry Broome, president and CEO of the GPEC, ticked off the many subsidies (“incentives”) that  Arizona offers solar, the strong university support for solar research, the state’s low costs, and the promise of speedy project permitting, I began to realize that California has a competitive threat on its hands.

Broome boasted, “We will establish ourselves overwhelmingly as the national leader in this market.” That might prove to be hot air, but I don’t think government and industry officials in the Golden State should rest easy.

Besides more sun than it knows what to do with, Arizona has a long tradition of semiconductor manufacturing, dating back to Motorola’s operations in the 1950s. And Arizona State University was one of only four universities (along with Stanford, MIT and Penn State) to win two DOE grants for research on next-generation PV technology.

At least one solar developer, Tessera Solar North America, has said it plans to shift new jobs to Arizona because of the high cost of doing business in California. And Chinese solar giant Suntech announced plans to open a solar panel manufacturing plant just outside of Phoenix in September.

But Arizona has problems of its own.

A couple of weeks ago, one of Arizona’s two senators, Republican Jon Kyl, issued a report blasting the concentrating solar power industry—which focuses solar energy to run steam generators—for threatening to use too much of the state’s limited water supply. As one reporter noted, the report “stunned both the solar industry and policymakers” in the state.

Arizona solar projects are also running into opposition from environmental groups. In February, two such groups filed suit against the Fish and Wildlife Service demanding that it issue regulations protecting the Sonoran desert tortoise under the Endangered Species Act. Such protection could significantly limit the planned development of utility-scale solar plants in the Arizona desert, where the feds are reviewing some 34 large permit applications.

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