Gilbert resident Alan Morgan never considered himself to be an especially “green” sort of person. But when he read about how Valley utilities were offering rebates to help customers afford rooftop solar energy systems, he decided to look into the possibility of installing a solar system on his home.
After studying the pros and cons and figuring the costs and benefits, he decided to give it a try, eventually installing a substantial 8-kilowatt photovoltaic system on his rooftop and on top of a ramada behind his house.
Since completing the installation earlier this year, he figures he has saved nearly $1,000 on his electricity bills. At that pace, he could offset the cost of the system in 10 to 12 years.
“Ten years from now I think I will look back and be very pleased I did it,” he said. “From that point everything is totally free.”
An increasing number of Arizona residents are reaching the same conclusion and taking advantage of utility rebates and government tax credits to install clean solar systems on their homes. As a result, Arizona utilities greatly expanded their renewable energy programs in 2009, and they anticipate further increases next year.
By the end of this year Salt River Project said it will support the installation of three times more commercial and residential photovoltaic and solar hot water systems than it subsidized in 2008. And Arizona Public Service experienced a “landmark” year in renewable energy in 2009, with customers installing more solar systems in the past 12 months than in all prior years combined, said Eran Mahrer, manager of renewable energy.
“People want these systems,” he said. “Our customers are more aware of the programs, there are more installers in the market and more financing options are available.”
Both utilities offer rebates on new rooftop photovoltaic and solar water heating systems to make them more affordable.
Also federal and state tax incentives are available to encourage greater use of solar and other renewable technologies.
According to SRP figures, the Tempe-based utility has supported the installation of 1,570 rooftop systems under its Earthwise Solar Incentive program so far this year, compared with 530 all of last year and 383 in 2007.
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The 2009 figure is just through Dec. 3 and about 250 more will be added before the end of this year, said Lori Singleton, SRP’s manager of renewable energy programs.
The energy being saved from all of SRP’s renewable programs is about 1.5 million megawatt-hours annually, power the utility doesn’t have to generate at fossil-fuel plants, she said.
The growth in 2009 occurred despite the weak economy and SRP’s cut in its subsidy per installation on June 1.
“We had a flurry of installations before then and a decline in June, July and August,” Singleton said. “But since then we’ve had a big increase again.”
SRP did not disclose the amount it spent on Earthwise rebates this year, but the demand so exceeded SRP’s expectations that the utility had to increase its Earthwise budget in mid-year, Singleton said.
“This is one of the most expensive ways to incorporate renewable energy into our portfolio,” she said. “It is less expensive to purchase power from (large, utility-scale) wind farms, geothermal and biomass plants. But we recognize our customers want (rooftop solar systems), so we are providing them. … We have decided that we want to meet customer demand.”
Singleton attributed that demand to concerns about the possibility of future electric rate increases. “People are thinking of solar as a way to guarantee their prices for years to come,” she said.
APS also has aggressively supported solar projects — prodded by the Arizona Corporation Commission, which is requiring that regulated utilities meet 15 percent of their electricity demand from renewables by 2025. About 20 megawatts of customer photovoltaic-generating capacity is in place, and APS has made commitments to its customers to provide incentive money for another 40 megawatts, Mahrer said.
“To give an idea of how much interest there is, between 2002 and 2008 about 2,400 customer residential systems were installed,” he said. “And year to date in 2009, over 2,500 residential systems have been installed.”
Commercial installations of solar equipment also took a big jump in the APS service territory this year, far exceeding capacity installed in all prior years, he said.
Both utilities expect their renewable programs to continue expanding next year, but probably not by the same percentage gains.
SRP plans to decrease its subsidy rate again on May 1, 2010, and will also change the way it pays subsidies for commercial installations, which will make year-over-year spending comparisons difficult, Singleton said.
SRP has decreased the subsidy because the cost of photovoltaic panels has been declining, she said.
From the utilities’ perspective, spending on renewable energy subsidies saves money in the long run by reducing the need to construct large and expensive generating plants that run on coal or natural gas.
This year SRP is meeting about 6.5 percent of its customers’ power demand from renewable sources, including rooftop installations; utility-scale wind, geothermal and biomass plants; and hydroelectricity from dams on the Salt River.
SRP’s board of directors has set a goal of meeting 15 percent of the project’s electricity demand from renewable sources, including hydro, by 2025.
APS also expects customer interest in rooftop systems to grow.
And the utility will look for opportunities to support more utility-scale wind, geothermal and solar plants, Mahrer said.
He expects that the delayed 280-megawatt Solana solar generating station near Gila Bend will obtain financing and begin construction during 2010.
APS estimated in October it will meet about 2.4 percent of its electricity demand from renewable sources this year, up from 2.1 percent last year.
To spur growth in the industry, the Arizona Solar Power Society said it plans to launch a new Web site in January and conduct a “Go Solar in Arizona” public relations campaign next year to educate residents and businesses on the benefits of solar power.
“We would like to see solar installed on 9,000 rooftops by the end of 2010,” said Robert Hosking, the society’s executive director.
Photovoltaic and solar hot water installations (2007 to 2009)
2009 (as of Dec. 3)
Solar Electric – 583
Solar Water Heating – 964
Total Residential – 1,547
Solar Electric – 13
Solar Water Heating – 10
Total Commercial – 23
Total 2009 Installations – 1,570
Solar Electric – 158
Solar Water Heating – 355
Total Residential – 513
Solar Electric – 15
Solar Water Heating – 2
Total Commercial – 17
Total 2008 Installations - 530
Solar Electric – 120
Solar Water Heating – 256
Total Residential – 376
Solar Electric – 7
Solar Water Heating – 0
Total Commercial – 7
Total 2007 Installations - 383
Source: Salt River Project