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Solar Industry Looks for a Way Forward in Arizona

Brandon Cheshire

In Brief

Arizona has rich solar resources, but stakeholders have faced challenges expanding the use of renewable energy in the state.

In this interview, Brandon Cheshire, board president of the Arizona Solar Energy Industries Association and founder of SunHarvest Solar, lays out a solar industry perspective on how to advance clean energy in the state.

"We kind of gratuitously refer to the industry as a 'solar coaster,' because our market share is so highly impacted by the activity or inactivity of the utility companies," Cheshire said. 

Arizona has rich solar resources, but stakeholders have faced challenges expanding the use of renewable energy in the state. A ballot initiative to increase the state’s renewable portfolio standard to 50% by 2030 was defeated last year, leaving Arizona with a 15% target, well below several of its southwestern neighbors.

Brandon Cheshire is board president of the Arizona Solar Energy Industries Association and founder of SunHarvest Solar, as well as a licensed electrician. In this interview, Cheshire lays out a solar industry perspective on how to advance clean energy in the state. This transcript has been edited for length and clarity.

CEFF: How would you describe the solar-energy market's current successes and challenges in Arizona?

Cheshire: Arizona has been a hotbed of conflict in regards to the availability of resources for solar energy and the penetration rate of the utility companies. We have one of the largest utility monopolies, Arizona Public Service (APS)/Pinnacle West, and it's pretty powerful and active in policy and lobbying in front of the elected Arizona Corporation Commission (ACC) as well as our state legislature. This has added to the renewable energy market’s instability to some degree. I've been in the industry for 10 years as a business owner and have been on the policy side now for over three years as the president of the Arizona Solar Energy Industries Association. We kind of gratuitously refer to the industry as a “solar coaster,” because our market share is so highly impacted by the activity or inactivity of the utility companies.

They have really tried to slow the adoption and penetration rate of solar and disincentivize it. As an example, in 2015, the Salt River Project (SRP), the state’s second largest utility, implemented a demand charge for solar customers. That pretty much killed the solar industry for almost two years in the coverage area for the SRP. Now we've been working with SRP specifically to try to get friendlier adoption rates and we've had a difficult time getting the policy changed, but they have embraced the solar industry and communicated that in a corporate sort of way. They have since released more rate plan options, but they are really only token service to rate-payer demands. They have net metering, but the demand charge and a low buy-back rate are disincentives for solar adoption.

Because of demand charges and other changes with new utility rate designs, the solar industry has gone into demand mitigation and started utilizing technology to engineer around that. I know we at SunHarvest don't install a solar system in SRP territory without a demand management system that prioritizes loads so that they don't run consecutively during off-peak times.

There are still some net-metering opportunities in Arizona, but mainly only with the smaller utility companies. They typically offer a version of it or a buyback at a lower rate of feed-in tariff because they have to have 15% of their power supplied by renewable energy by 2025 in their power diversity portfolio.

Consumers and the solar industry associations have been trying to increase Arizona’s renewable energy standard for years now. In a heated, multi-million-dollar battle that made national headlines last year, NextGen America, Tom Steyer’s group, and APS went head-to-head over a ballot initiative that sought to increase the renewable energy standard to 50% by 2030. It was the most expensive ballot measure in the state’s history, and failed by a wide margin after the ballot language was changed by the Arizona attorney general.

CEFF: What are the implications of the failed ballot proposal effort and debate on RPS within the Arizona Corporation Commission? Are there other policy mechanisms that would be better for promoting growth in renewables?

Cheshire: The ACC is considering possible deregulation of the energy market, which as we've seen historically, could create an influx of energy suppliers. Though it could possibly lead to a temporary increase in prices until it balanced itself out, it would ultimately do well to dismantle the utility monopolies, which would create a lot of long-term opportunities, especially for renewable energy. They are also considering various options for increasing the renewable energy standard in the state within the Corporation Commission, but nothing really palpable has legs yet, it's still in discussion.

Our hopes for actually getting something done in a concrete and permanent way are only really tangible post-2020. There's a pretty big appetite for eliminating some of the corporate influences in the Corporation Commission and three seats will be up for grabs. It will also be the only statewide race in Arizona outside the presidency and the senate seat. I've never felt more optimistic about our realistic chances of getting a couple good renewable-energy-, environment-, and climate-change-literate folks into that office, and getting a very tangible path forward with a 50-75% — hopefully 100% — target by 2050 to make us more competitive with our region and our available solar resources in the state.

CEFF: What is your perspective on the energy efficiency market's successes and challenges at this time in Arizona?

Cheshire: In Arizona, our largest residential energy consumer is air conditioning during the summer — which is a necessity and not a luxury — as we typically see 100 days over 100 degrees per year. So air conditioning is a pretty sizable challenge that hasn't, I don't think, adequately been addressed from what I've seen as far as energy efficiency. There are high-efficiency air conditioning units and there are some technologies that have solar in them, but for the most part we typically see units that consume a lot of electricity.

LED technology gets widely implemented here. We've also seen Aeroseal technology be implemented on the air-conditioning side, to seal ducts so you’re not unnecessarily cooling unlivable attic space. We've also been doing insulation packages to create envelopes as well as weatherization stuff. So those methods of energy efficiency have been pretty widely adopted.

There's a very large market. What would be incredibly helpful is more resources and education pushed to lower-income and vulnerable communities so they could negate some costs, reduce waste and save some money. Statewide and citywide utility-driven programs on energy-efficiency would basically pay for themselves and cut down on utilities’ need to buy so much power. That's a tremendous opportunity in the state for sure. 

CEFF: What other stakeholder decisions would catalyze forward movement in these two markets in Arizona?

Cheshire: All of the polling data in this state shows that well over 80-90% of the public adamantly support solar and want to see more renewable energy in their communities. What stakeholders should do — and what we've been working to create partnerships to do — is community solar, being able to provide microgrids and take usually-unadaptable buildings and make them solar-ready.

We have a lot of multi-unit apartments and condominiums and multiple meter setups. Those customers can't opt into a solar program, but being able to take advantage of community solar opportunities would really help mitigate the demand for energy as well as provide a very efficient method of energy production. It's really only regulation and utility policy that's preventing that from happening. There's a lot of activity and interest around it, but without the political will, it’s difficult to make it happen. There is movement toward adopting community solar programs, establishing microgrids, electric vehicles and infrastructure, and deregulation of the energy sector. All of these things really boost and work collaboratively with energy efficiency, which is a win for everyone.

There are so many economic opportunities within the market, the public desire for it, technologies advancing daily, as well as the obvious need for quick action due to our climate crisis. I will stand hopeful for bold leadership in the coming years at both the state and federal levels, to move away from the unhealthy chokehold of fossil fuels on our energy marketplace.

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