Where does AZ's electricity come from; state and federal solar issues, Section 1603 funds etc.

1. Arizona and Solar Power:
The Time is
NOW!
Arizona Corporation
Commissioner Paul Newman
September 2012

2. What Is AZ’s Electricity Mix?
• Total in-state generation: 27,000 MW
• Total in-state consumption: 16,000 MW
– 40-50% coal
– ~30% natural gas
– ~22% nuclear
– ~4% hydro
–Less than 2% solar…?!
• Total in-state solar: ~450 MW as of 06/12

3. AZ Imports 90% of Fossil Fuels
• AZ imports all Nat Gas and 2/3 of coal
• AZ spent a total of $2.5-3 BILLION on
coal, natural gas and uranium in 2010.
– AZ spent $1.5 billion importing Natural Gas
(NG) for electricity
– $800 million spent on NG for heating
– AZ spent $500 million in 2007 importing
coal, and $280 million on coal from in-state

5. AZ: Only 1-2% of Non-hydro
Generation is Renewable in 2011
Only 4 states
17 states were less than 1%
less than 1% RE in RE in 2011,
2001, including AZ including AZ!

6. Renewable Portfolio Standards
RPS Policies
www.dsireusa.org / February 2012
VT: (1) RE meets any increase ME: 30% x 2000
WA: 15% x 2020* New RE: 10% x 2017
MN: 25% x 2025 in retail sales x 2012;
MT: 15% x 2015 (Xcel: 30% x 2020) (2) 20% RE & CHP x 2017 NH: 23.8% x 2025
OR : 25% x 2025 (large utiliti es )* ND: 10% x 2015 MI: 10% & 1,100 MW MA: 22.1% x 2020
x 2015* New RE : 15% x 2020
5% - 10% x 2025 (smaller utilities)
(+1% annually thereafter)
SD: 10% x 2015 WI : Varies by utility;
NY: 29% x 2015 RI: 16% x 2020
NV : 25% x 2025* CO: 30% by 2020 CT: 27% x 2020
IA: 105 2015 statewide
(IOUs) ~10% x OH : 25% x 2025 †
10% by 2020 (co-ops & large munis)*
MW PA: ~ 18% x 2021 †
IL: 25% x 2025
WV: 25% x 2025*† NJ: 20.38% RE x 2021
IN: 15% x 2025†
CA: 33% x 2020 UT: 20% by 2025* KS: 20% x 2020 VA: 15% x 2025* + 5,316 GWh solar x
2026
M O: 15% x 2021 MD: 20% x 2022
AZ: 15% x 2025
OK: 15% x 2015 NC : 12.5% x 2021 (IOUs) DE: 25% x 2026*
10% x 2018 (co-ops & munis)
NM: 20% x 2020 (IOUs) DC
10% x 2020 (co-ops) DC: 20% x 2020
TX: 5,880 MW x PR: 20% x 2035
2015
HI: 40% x 2030
29 states ++
29 states
Renewable portfolio standard Minimum solar or customer-sited requirement DC and PR
DC and PR
have an RPS
*
Renewable portfolio goal Extra credit for solar or customer-sited renewables have an RPS
(8 states have goals)
(8 states have goals)
Solar water heating eligible † Includes non-renewable alternative resources

7. AZ Renewable Energy Standard
(RES) is 15% by 2025
AZ’s RES means that 15%
of the kilowatt-hours
Year Requirement
generated by regulated
utilities come from ‘clean 2008 1.75 %
energy’: solar, wind, 2011 3.00 %
biomass, solar hot water, 2014 4.50 %
concentrating solar etc.
by 2025… 2017 7.00 %
AZ’s RES is far lower than 2020 10.00 %
Colorado (30% by 2020), 2024 14.00 %
California (33% by 2020), After 2024 15.00 %
Nevada (25% by 2025)
New Mexico (20% by 2020)

8. 24 States Generate More Clean
Electricity Than AZ!
A list of the states/jurisdictions with more clean energy than
AZ: Oregon, Wisconsin, Michigan, Rhode Island, Illinois,
Washington D.C., Delaware, Maryland, Hawaii, Kansas,
New Mexico, Pennsylvania, New Hampshire,
Massachusetts, Nevada, Connecticut, California, Maine,
Iowa, Colorado, Minnesota, Texas, North Carolina, New
York and New Jersey.
 Each of these states generates MORE clean energy
than Arizona!
 See the next slide for details, from
www.dsireusa.org/library by Justin Barnes, 3/6/12, RPS
Update at Renewable Energy Markets Ass’n webinar

9. 24 States Generate More Clean
Electricity Than AZ!
 Why do each of these states generate MORE
clean energy than Arizona?
 Because the U.S. has nearly 10 times more
wind than solar – 50 GW (50,000 MW) of wind
v. 5.7 GW (5,700 MW of solar PV and CSP or
Concentrating Solar Power).
 In most other states, solar is far more expensive
than in AZ because they don’t generate as much
electricity per installed watt of solar.

10. 24 States Generate More Clean
Electricity Than AZ at 3.5%!
 Oregon 5.0% Wisconsin 5.6%
 Michigan 5.6% Rhode Island 6.5%
 Illinois 7.0% Washington D.C. 7.5%
 Delaware 8.0% Maryland 9.0%
 Hawaii, Kansas, New Mexico, Pennsylvania and
New Hampshire and New Jersey 10%
 Massachusetts, Nevada, Connecticut, Colorado
14-16%
 California, Iowa, Minnesota 18-20%

11. AZ REST is 15% by 2025 –
low!
2009 MWh 2009 (% 2012 %
State Obligation 2010 MWh Obligation Comp) 2010 (% Comp) Obligation 2013 % Obligation
AZ 824,430 1,015,858 90% 93% 3.50% 4.00%
CA 29,537,501 34,116,201 89% 86% 20.00% 20.00%
CO 1,646,899 1,520,066 100% 99% 15.00% (IOUs) 15.00% (IOUs)
CT no data no data no data no data 16.00% 17.00%
DC 591,576 699,887 100% 100% 7.50% 9.00%
DE 291,451 410,618 100% 99% 8.50% 10.00%
HI 0 957,857 n/a 100% 10.00% 10.00%
IA 295,800 295,800 100% 100% 105 MW 105 MW
IL 2,283,383 2,747,874 100% 100% 7.00% 8.00%
KS 0 0 n/a n/a 10.00% 10.00%
MA 3,096,274 5,468,563 82% 74% 14.10% 15.10%
MD 2,770,353 3,539,778 100% 100% 9.00% 10.70%
ME 3,514,043 3,832,365 100% 100% 35.00% 36.00%
MI 0 0 n/a n/a 5.60% 6.80%
MN 3,860,255 7,093,647 100% 100% 18% (Xcel); 12% 18% (Xcel); 12%
MO 0 0 n/a n/a 2.00% 2.00%
MT 346,261 692,167 100% 98% 1.00% 1.00%
NC 0 24,867 n/a 100% 3.00% (IOUs) 3.00% (IOUs)
NH 608,000 830,347 93% 90% 10.65% 11.70%
NJ 5,733,633 6,841,213 99% 100% 9.64% (non-solar) 10.48% (non-solar)
NM 852,285 858,705 100% 100% 10.00% 10.00%
NV 3,551,815 3,493,644 100% 100% 15.00% 18.00%
NY 4,868,849 3,061,948 61% 96% 4.54% (new) 5.60% (new)
OH 333,809 602,196 100% 100% 1.50% 2.00%
OR 0 0 n/a n/a 5.00% 5.00%
PA 829,374 no data 100% no data 10.22% 10.72%
RI 316,424 no data 100% no data 6.50% 7.50%
TX 6,799,347 9,053,544 100% 100% 3,384 MW 3,384 MW
WA 0 0 n/a n/a 3.00% 3.00%
WI 2,501,915 3,850,101 100% 100% 5.55% 5.55%
Sources: MWh and compliance % data from Lawrence Berkeley National Lab; 2012 and 2013 compliance obligations from DSIRE.

12. Arizona v. New Jersey:
Solar Investment
Arizona
• 448 MW total installed solar
• $637 million was spent on solar photovoltaic
installations in Arizona in 2011- nearly twice as
much as was spent in 2010.
New Jersey
• 775 MW total installed solar; 2nd in U.S.
• In 2011, $1.2 billion was invested in New
Jersey to install solar for homes.
http://www.seia.org/policy/state-solar-policy

13. Solar Module Costs: From $7/watt
Down to ~$1.25/watt

14. Installed System Price per Watt, 3Q10 Breakout
2008-2011
$5.92
$3.72
$3.17
$2.83
Source: Deutsche Bank, January 2011; Systems are global (i.e., blended across geographies) 14

15. APS’ RW Beck Study on the Value
Of Distributed Energy
Operating Impacts and Valuation study
RW Beck
study says
the value of
distributed
solar is 7.9
to 14.11
cents/kWh
in avoided
costs for
fuel, trans-
mission,
line losses,
etc.
5

16. Worldwide PV Shipments
PV has historically been a marginal power source, but incentives drove steep growth in demand from
’01-’05 Foreign incentives and R&D programs have driven worldwide competition past U.S. producers
U.S. supplied
over 30% of
worldwide PV
until 1998; now
only 5-7%

17. Total Installed Solar Power Per Million
People Very Low In the U.S. Relative to
Germany, Spain, Czech Republic
(what?!) – even Canada!

19. Germany Has Nearly Half of the
World’s Installed Solar PV

20. Germany has installed 15 times more
solar per person than the U.S.!

21. AZ Wins in Clean Energy Future
• AZ: not living up to clean energy potential
• AZ exports about 30% of our electricity: why not
export clean electrons?
• AZ’s Renewable Energy Standard and Tariff
(REST) is far behind CA, CO, NM and NV.
• Financing mechanisms currently available for
fossil fuels must be extended to clean energy;
also developing policies that recognize the true
benefits of solar/clean electricity.
• Good financing structures are key!

22. Solar Has
Created
Jobs Almost
10xFaster
Than the
National
Average

23. Sadly, not many of these projects are
in AZ! See this map from SEIA:
http://www.seia.org/research-resources/solar-me

24. Global Renewable Energy 2011:
$257 billion invested ($147B Solar)
http://newenergynews.blogspot.com/2012/06/solar-leads-world-new-energy-investment.html

25. Federal Policies
That Help Clean Energy
• Level the playing field for subsidies
• Reduce/end subsidies for fossil fuels
• Extend the Production Tax Credit (wind) and the
Investment Tax Credit (solar, expires 2016).
• Allow the use of Master Limited Partnerships for clean
energy – not just oil, gas and biofuels.
• Extend Section 1603 cash in lieu of tax credit. Arizona
has benefited enormously from Section 1603!
• Allow PACE (Property Assessed Clean Energy) to be
applied to residential as well as commercial solar –
especially great for Arizona!

26. Section 1603: $409 Million Worth of
Projects in Arizona To Date
• Section 1603 is a cash grant in lieu of taking a 30%
solar tax investment tax credit.
• Section 1603 was extended for ONE year in 12/31/10,
but has not been renewed since it expired on 12/31/11.
• AZ has rec’d $409 million in Section 1603 projects,
mostly solar.
http://www.treasury.gov/initiatives/recovery/Pages/1603.aspx
• The Solar ITC (Investment Tax Credit) expires in 2016
and should be extended.
http://www.pv-magazine.com/news/details/beitrag/us-congress-pulls-the-plug-on-secti

27. Wind PTC (Production Tax Credit) In
Danger; U.S. Wind Market Could Fall 80%
U.S. wind market could
fall by 80% without
PTC extension.
U.S. has enormous
wind and solar
potential
Wind has suffered
boom and bust
cycles; why are we
doing this?!
Solar means good jobs!

28. $72.5 billion
for Fossil
Fuels
$12.2
billion for
Wind and
Solar

29. Cumulative Historical Federal Subsidies
Heavily Favor Oil and Gas
Cumulative Historical Federal Subsidies
2010$, billions
$5.93
1994-2009
$32.34
1980-2009
O&G
$185.38
1947-1999 Nuclear
Biofuels
Renewables
$446.96
1918-2009
29

30. Key Finding - Average Annual
Subsidies to Each Energy Sector Over
Their Lifetime
Historical Average of Annual Energy Subsidies:
A Century of Federal Support
6
5
4
2010$,
3
billions
$4.86
2
$3.50
1
$1.08
$0.37
0
O&G, 1918-2009 Nuclear, 1947-1999 Biofuels, 1980-2009 Renewables, 1994-2009
30

31. Coal, Electric Utilities Spend
Heavily on Lobbying
http://www.motherjones.com/environment/2012/04/beyond-coal-plant-activism?page=

32. Health Effects from Burning Fossil
Fuels are Enormous