Tuesday, November 23, 2010

Solar Benefits for Arizona - More Than Any Other State

Arizona stands to benefit more than any other state by producing and exporting solar energy, according to a study by the W. P. Carey School of Business.

The study found that Arizona has the greatest potential for solar energy and can create a strong industry by exporting that energy to other states.

Conducted by Matthew Croucher, assistant research professor in the department of economics, the study ranked states using three criteria: solar insulation, or the amount of sunlight to hit the ground on any given day; whether a large amount of energy can be produced in the state; and if that energy could then be transported at a low cost.

The top three states to benefit from solar production and export were Arizona, Colorado and Georgia. The study also ranked states that consume the most solar energy and those that would benefit from producing it for their own use.

Croucher said considering top solar energy-producing states together with top consuming states could change the way alternative energy is viewed.

“The issue that you have is that most states look at solar deployment and renewable energy within their own states,” Croucher said. “There’s a very state-centric way of looking at renewable energy generation.”

A little more than half the states in the country have renewable energy standards, or minimum amounts of energy that must be produced using renewable resources, Croucher said. This creates a demand for renewable energy.

States like Arizona can capitalize on their ability to produce solar energy by exporting their energy to states that don’t have the benefit of near-constant sunshine.

The problem then becomes a lack of transmission lines to transport the energy to the other states, which would require a significant investment to develop.

“Transmission lines have been mainly built with fossil fuels in mind,” he said, referring to lines that run from coal and nuclear plants.

These lines, while still capable of transporting both solar energy and energy produced by fossil fuels, are not in areas where the most solar power can be produced, he said.

“The best solar production is not necessarily where the transmission lines are located,” Croucher said. “Where the coal resources are and nuclear and gas resources are may not be the best places for solar.”

For Arizona to maximize its competitive advantage in solar, he said, the state needs to look into how to make this an export industry. It needs to be decided who is going to pay for the construction of these transmission lines.

“Should we charge the other state that we’re exporting to for it, or should we pay for it?” Croucher said. “We might have to change the way in which we look at the transmission system and who pays for that.”

He also said there is potential for some negative economic impact because of increases in energy costs.

“The potential negative economic impact comes from adopting a form of technology that is not the cheapest form of technology,” he said. “Solar is typically seen as a more expensive form of energy, which has to be true to some extent because there would be no renewable energy standards if solar energy was the cheapest to produce.”

Exporting the energy to other states would offset the potential rise in energy prices, which would constrict budgets for consumers.

As the country moves into a solar era with states adopting renewable energy standards, Arizona is situated to take advantage of this potential export industry.

“Solar is going to be one of the major producers of energy,” he said. “But the focus of the building of the transmission system has not been to maximize the transmission of solar.”

Rep. Gabrielle Giffords, D-Ariz., has been a long-time proponent of bringing solar production to Arizona, and said in an e-mail that several reports have shown the solar industry in Arizona has tremendous potential to expand.

“I am thrilled to hear that Arizona was found to be the state that would benefit the most from solar production,” Giffords said. “This study dovetails perfectly with what I have been saying. Because Arizona is the sunniest state in the country, there is no reason that any state should have more solar energy jobs than Arizona.”

She said other states like Pennsylvania, Michigan and Wisconsin have more solar energy jobs than Arizona, but states famous for cars, cheese and peaches should not have more of these jobs than Arizona.

“The growth potential of the solar industry in Arizona is like the sunshine that beats down on our state — virtually limitless,” she said. “When we harness the power of the sun and put it to work for us, we not only tap into a clean, renewable source of energy, we also strengthen our economy and lay the foundation for future prosperity.”


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