Arizona Coalition for New Energy Technologies

Update

21 May 2002

In this Edition:

• Welcome to New Coalition Members
• New Coalition Website Launched
• Update on Arizona Solar Energy Legislation
• Arizona Solar Advisory Council Meets Governor Hull
• Solar Energy and Homeowners’ Associations
• Southwest Windpower Named Ex-Im Bank Small Business Exporter of the Year
• Solar Plant Dedicated in Scottsdale
• “How big is the carbon market—really?”
• Farm Bill Advances Clean New Energy Technologies
• DOE Seeks Public Input to Improve Voluntary Greenhouse Gas Reporting
• Russian Far East Offers Export Opportunities
• Coalition Member Company Featured in Current Issue of “Solar Today”

WELCOME TO NEW COALITION MEMBERS

American Solar Electric, Inc.

www.americanpv.com

Phoenix

American Solar Electric (ASE) is a design/build firm specializing in solar-electric power systems.  With a staff made up of experienced solar engineers and qualified electricians, American Solar Electric offers "one-stop" service for residential, commercial and utility customers.  ASE is a licensed Arizona electrical contractor.  Recent projects include electrical work on a 315 kWp utility power plant for Arizona Public Service and the installation of the first residential grid-tie (batteryless) system in the City of Phoenix.

E V Solar Products, Inc.

www.evsolar.com

Chino Valley

EV Solar Products specializes in the design and installation of fully integrated solar electric, solar hot water, wind, water pumping and emergency back-up systems for residential and business applications.  They feature a full line of solar panels, inverters and solar electric components as well as energy efficient and green building products and have the largest solar and wind powered storefront in northern Arizona.

Squire, Sanders & Dempsey L.L.P.

www.ssd.com

Phoenix

Established in 1890, Squire Sanders is a global law firm with more than 750 attorneys in 28 offices located throughout the United States, Europe and Asia.  Squire Sanders has one of the world's oldest and most distinguished energy law practices.  The firm has extensive experience in the structuring, development, financing, and regulation of power generation projects, including substantial involvement in windfarm and other renewable energy projects.

NEW COALITION WEBSITE LAUNCHED

The Arizona and Colorado Coalitions for New Energy Technologies have launched a new website at www.newenergytechnologies.org.  Featuring news and information on member companies, legislative and regulatory news, events and other materials of interest, we hope that this site will become a valuable resource for information on the clean new energy technology business community in Arizona and Colorado.

Comments, questions and suggestions on this new website are invited.

UPDATE ON ARIZONA SOLAR ENERGY LEGISLATION

Legislation dealing with solar and renewable energy has been considered by the Arizona Legislature.  The two bills are HB 2457, providing solar contractor’s sales tax exemption, and HB 2693, providing for a study committee to examine clean power development.

The Senate approved HB 2457 by a 20 to 9 margin.  Because an amendment approved in the Senate Finance Committee struck the early sunset date, the bill was transmitted back to the House for concurrence.  The Senate amendment reversed the early sunset date that the bill was saddled with in the House of Representatives.  It ran into trouble on the floor of the House of Representatives and fell one vote short of the required number for passage.  Attempts to revive the bill failed.

HB 2457 would have corrected a longstanding problem for the Arizona Department of Revenue and the solar industry by equalizing the sales tax exemption between solar contractors and retail companies doing business in the state.  It also provided relief to contractors who mistakenly had not been properly charging sales tax, many due to information provided by the Department of Revenue.  Passage of this bill would have equalized the tax and eliminate any future confusion between the industry and Revenue.

HB 2693 received a much better reception from the House of Representatives.  Having made its way through the Senate Natural Resources, Commerce, and Rules Committees, it was approved by a 20 to 8 margin by the Senate.  It recently passed the House on a 39 to 17 vote and has been transmitted to the Governor for her signature.  The bill originally provided four elements, incorporating solar and other clean renewable energy technology in electric utilities through an environmental portfolio standard, as has been adopted by the Arizona Corporation Commission, promoting solar energy and energy efficiency in state/public buildings, authorizing the Arizona Corporation Commission to begin development of an energy infrastructure that supports distributed energy systems, and provisions to enable the state to do a better job of encouraging energy involvement in our future.  This would take place through a review of the Arizona Department of Commerce, Energy Office.  A “strike all” amendment in the House Energy Utilities and Committee eliminated all provisions of the bill and instead inserted language calling for a study committee to be conducted this year.

Both bills were seen as measures that will help Arizona’s solar and renewable energy industry better enable Arizona to take advantage of the air quality and economic development benefits that solar and renewable energy offers.  Households using solar energy not only avoid the production of significant emissions, but provide Arizona’s families with reductions in energy costs.

Greater use of solar energy in Arizona can provide a variety of benefits.  Not only do solar energy systems provide clean, pollution free energy to Arizona homeowners, but the money saved by the use of solar energy helps Arizona families and provides an additional boost to our economy.  In fact, a solar swimming pool heating system will avoid the production of 10,000 pounds of pollutants annually when compared to natural gas swimming pool heaters.  Additionally, a dollar saved through the use of solar energy has an economic impact of $1.67 in the community compared to $.60 when spent on utilities.

—By Michael Neary

ARIZONA SOLAR ADVISORY COUNCIL MEETS GOVERNOR HULL

The Arizona Solar Advisory Council recently met with Governor Jane Dee Hull and advised her of the many air quality and economic development advantages of supporting greater use of solar and renewable energy development in Arizona.  The Advisory Council is a group of experts in the field selected from the solar industry, Arizona universities, utilities and solar and renewable energy advocates.  Members are appointed by the Governor to advise the Department of Commerce’s Energy Office on solar and renewable energy matters.  They are legislatively charged with assisting and advising the Director of the Department of Commerce on solar energy and renewable issues, identifying solar energy technologies and long range programs, and encouraging the development of solar and renewable energy in Arizona

The Council advised the Governor that they felt that the time was right for Arizona to actively work towards the goal of making solar and renewable energy an economic mainstay of the Arizona economy, becoming a global leader in solar research, development, manufacturing and use.  The Governor was advised that the worldwide expansion of the use of solar and renewable energy offers Arizona a unique opportunity to attract solar and renewable energy companies that bring jobs and clean energy products to the state.  Increased manufacturing also offers Arizona a unique export opportunity, particularly to Mexico and Central and South America. 

The Advisory Council will develop specific actions, recommendations and guidelines that will help coordinate the steps necessary to help “make it happen” in Arizona.  The Solar Advisory Council meets at the Arizona Department of Commerce.  The Council’s next meeting is scheduled for June 7, 2002

—By Michael Neary

SOLAR ENERGY AND HOMEOWNERS’ ASSOCIATIONS

—Industry out to prove that they do mix

For many years now, homeowners’ associations and the solar industry have been at odds over the installation of solar energy systems in planned communities.  In fact, this reluctance to accept solar energy systems has been a significant barrier to the development of markets for the solar energy systems in many states.  Conditions, covenants and restrictions (CC&R’s), that are placed on homes in planned communities, are often used to prevent the installation of solar energy system.  Legislation attempting to strengthen Arizona’s statute protecting a homeowner’s property right to install solar has met with opposition from the building industry.  There is currently a case awaiting decision in the Arizona Court of Appeals dealing with the issue. 

Approximately three years ago, the Arizona, California, and Florida chapters of the Solar Energy Industries Association teamed up to develop a program to work with homeowners’ associations and the industry to promote the aesthetic installation of solar energy systems in planned communities.  Since there have been approximately 30,000 new homes built annually in the Phoenix area in recent years, this represents a significant barrier to the marketing of solar water heating systems, swimming pool heating systems, and photovoltaic systems.

After analyzing the concerns of homeowners’ associations across the country and taking into consideration sound installation practices of solar energy systems, standards were developed for aesthetic rooftop installations of solar energy collectors.  The industry’s goal is to promote the adoption of these standards by homeowners’ associations so that both the HOA’s and the solar industry are on the same page when it comes to the approval of solar energy system installations. 

The initial phase of this program is being conducted by the Arizona Solar Energy Industries Association (ARISEIA), funded by the U.S. Department of Energy’s Million Solar Roofs (MSR) program, through the Arizona Department of Commerce’s Energy Office.  Nationally, the U.S. Department of Energy has worked to eliminate HOA barriers to solar energy and this is the first attempt to work locally with homeowners’ associations to promote rather than prohibit the greater use of solar energy in planned communities.

Once standards are adopted by a number of HOA’s, a list of “Solar Friendly Communities” will be developed that can be promoted through a variety of venues.  Plans include posting the list on ARISEIA’s web site, the Arizona Solar Center, and providing the list to consumers through the Solar Hotline, a consumer education service provided by the industry association.  The list would also be promoted at home shows and other events, through local municipalities, the Arizona Association of Realtors, and other organizations.

A byproduct of this outreach program is the fact that many associations are expressing an interest in solar energy for their own use.  Homeowners’ associations have found that solar is practical and economical for lighting in common areas where electricity is not readily available and for heating swimming pools.  Rising natural gas costs have made it more appealing for HOA’s to use solar energy rather than natural gas to heat swimming pools. 

—By Michael Neary

SOUTHWEST WINDPOWER NAMED EX-IM BANK SMALL BUSINESS EXPORTER OF THE YEAR

Coalition member Southwest Windpower, a producer of small battery-charging wind generators, has received the 2002 Small Business Exporter of the Year award from the Export-Import Bank of the United States (Ex-Im Bank).  According to the Ex-Im Bank press release available on Southwest Windpower’s website, the company was honored at an awards ceremony in Washington, D.C. earlier this month.

The Ex-Im press release notes that Southwest Windpower was “[f]ounded by two young entrepreneurs out of a garage in rural Arizona in 1986,” and that the company’s vision from the start was to “sell its products in the global market and to make a difference in the world through low-cost renewable energy…Since it began using Ex-Im Bank’s export credit insurance program in 1996, the company has been able to offer its small foreign distributors open accounts, easing their cash flow and allowing them to place larger orders.”

“The results have been tremendous,” said Southwest Windpower Vice-President Andrew Kruse.  “Last year more than 50 percent of our revenues came from export sales.  We now have 50 employees, factories in Flagstaff and Duluth, Minnesota, and our products are sold in more than 50 countries.  We’re excited about looking at other Ex-Im Bank products to help us fill future orders.  The Ex-Im Bank has become a strategic partner in our effort to further expand our export sales.”

“Southwest Windpower is an outstanding example of how a small enterprise can successfully contribute to the U.S. export effort and U.S. job creation through the use of Ex-Im Bank programs,” said Ex-Im Bank Vice Chairman Eduardo Aguirre, Jr.  “Ex-Im Bank aggressively supports renewable energy and other environmentally beneficial exports that contribute to sustainable development in emerging markets around the world.”

Since its inception, Southwest Windpower has produced more than 60,000 wind generators, of which 10,000 were produced in 2001 alone.  The products are used to produce electricity on telecommunication towers, remote homes, off-shore platforms, remote monitoring sites, schools, and homes in emerging markets.

Ex-Im Bank is the official export credit agency of the United States and provides loans, guarantees and export credit insurance in support of U.S. companies seeking to expand into the global marketplace.  In fiscal year 2001, Ex-Im Bank authorized financing to support $12.5 billion of U.S. exports worldwide.

[From Ex-Im Bank press release via Southwest Windpower]

SOLAR PLANT DEDICATED IN SCOTTSDALE

—Residents of Scottsdale now can receive solar energy from the city’s water campus.

APS has constructed a solar electric power plant at the Scottsdale Water Campus, 8417 E. Union Hills Drive.  The facility will feed 300 kilowatts (kW) of solar energy – enough to provide for the electrical needs of up to 100 homes – to the electric grid.  APS and the City of Scottsdale held a dedication ceremony on 27 April at the Water Campus.

“The Scottsdale Water Campus offers a vital service to those who live in Scottsdale,” said Jim Clune, Manager of the Scottsdale Water Campus.  “By partnering with APS to utilize the space atop these water storage tanks, which otherwise would go unused, for this solar facility, we are continuing to serve the people of Scottsdale while encouraging the further development of this renewable resource.”

Construction of the facility began in January and was completed in April.  Featuring technology that tracks the sun’s movement for maximum efficiency, this station is the latest in a long line of APS and Scottsdale solar partnerships.  Other APS installations in Scottsdale include: a 41-kW system (currently being expanded to 80 kW) atop the parking structure at the City of Scottsdale’s service yard; a 2-kW system at the Scottsdale Civic Center Library; and a 2-kW system at the Mustang Library.

“We are extremely proud of our relationship with the City of Scottsdale,” said Peter Johnston, Manager of Technology Development for APS.  “It’s one that has been positive for both parties, but more importantly, it is the residents of Scottsdale who will benefit most from these solar installations.”

Electricity generated by the plant will feed directly into the electrical grid system that serves APS customers.  It is financed in part by APS and participating customers who, as APS Solar Partners, pay $2.64 per month to have 15 kW hours of their electricity needs generated by solar power.  As part of its Solar Partners program, APS plans to have 3 megawatts of solar capacity installed by the end of 2003.

[From APS press release]

HOW BIG IS THE CARBON MARKET-REALLY?

—New Report from Econergy International Examines Emerging Market for CO2

In a recently released report, Econergy International Corporation notes that "[s]ince the concept of a market for trading in carbon emissions reductions was introduced at the 1992 Rio Earth Summit, and found a structure with the 1997 Kyoto Protocol, a fledgling market has hobbled its way along, picking up momentum in fits and spurts; loosing speed as political forces and "market mechanism supporters" try and fail to push international emissions reduction commitments into force."

Authors Amy Ellsworth and Phil Doyle note that "[t]hough not an especially liquid market, voluntary trading occurs fairly regularly...[t]he transactions involve a commodity that many find to be mystifying in its lack of substance.

Ellsworth and Doyle conclude that "even if Kyoto were never ratified, carbon trading markets would continue to move forward on a limited basis. And, if the rules of Kyoto are formalized and the Protocol is ratified, a market for carbon emission reductions could mature and stabilize very quickly."

To review the full report, visit: http://www.eic-co.com/.

FARM BILL ADVANCES CLEAN NEW ENERGY TECHNOLOGIES

On 9 May, Congress approved the 2002 Farm Bill, which includes a new Energy Title and important new clean energy development provisions in the Conservation and Rural Development Titles.  Howard Learner of the Chicago-based Environmental Law and Policy Center (ELPC) notes that “this legislative support for renewable energy development and energy efficiency improvements is a win-win-win for farmers, rural economic development and the environment.  The new Energy Title is now embedded in the overall infrastructure of the Farm Bill.  These provisions are a terrific victory for clean energy and sustainable agriculture advocates.”

According to ELPC, there are $405 million of mandatory appropriations over six years in the Farm Bill’s new Energy Title.  Half of that amount will fund new clean energy programs, including: direct financial assistance to farmers, ranchers, and rural small businesses for wind power and other renewable energy system purchases and for energy efficiency improvements ($115 million); appropriations for the Biomass Research and Development Act ($75 million); a new Federal biobased products purchasing preference program ($6 million); and a biodiesel fuel education program ($5 million).  The other half will fund the existing Commodity Credit Corporation (“CCC”) subsidy program to increase production of ethanol and biodiesel.

In addition, amendments to the Rural Development Title make wind power, other renewable energy sources, and energy efficiency eligible for hundreds of millions of dollars of more funding.  For example, farm- and ranch-based renewable energy projects are now eligible under the Value-Added Agricultural Product Market Development Grants program, which has received mandatory appropriations of $240 million over six years.  Renewable energy projects also are eligible for rural development loans, and they have been identified as a priority in the Farm Bill Conference Committee Managers’ Statement.

Some of the other provisions of the Senate-passed Clean Energy Title remain in the Farm Bill as authorizations, without mandatory appropriations.  The Conference Committee also amended the Conservation Title to allow biomass harvesting and wind turbine installations on Conservation Reserve Program land, and amended the Research Title to provide new emphasis on farm and ranch energy efficiency research.

[From information provided by ELPC]

DOE SEEKS PUBLIC INPUT TO IMPROVE VOLUNTARY GREENHOUSE GAS REPORTING

The U.S. Department of Energy (DOE) is requesting public comments on ways to improve its voluntary reporting program to reduce greenhouse gas emissions.  According to DOE, “the call for public input will help fulfill a directive from President Bush to reduce the greenhouse gas intensity of the US economy by 18 percent in the next 10 years as announced in the clear skies initiative earlier this year.”

Through a Notice of Inquiry issued on 6 May, DOE requested comments on how to improve the voluntary reporting program that has, since 1995, collected data from US companies and citizens on their emissions of greenhouse gases and on their actions to reduce these emissions.  DOE will consider the comments and then make recommendations to the President on how the current reporting program can be improved.  The Department's Energy Information Administration maintains the program containing this data and periodically makes the data available on the web and in published reports.

This Notice and other related information for interested stakeholders is available on the web at http://www.pi.energy.gov/enhancingGHGregistry/.

[From DOE news release]

ENERGY SECTOR IN THE RUSSIAN FAR EAST

—Opportunities for Exporters of New Energy Technologies

The Business Information Service for the Newly Independent States (BISNIS) is the U.S. Government's main resource for trade and investment information on the Newly Independent States of the former Soviet Union.  From time to time, it offers news of potential business opportunities for companies involved in energy efficiency and renewable energy technologies.

In a recent news item, BISNIS reports that “the current situation in the energy sector of the Russian Far East (RFE) is very unstable and shaky compared to Russia's other regions, and requires major restructuring and development.  This will involve introduction of new technologies (including environmentally-friendly and alternative types of energy production) and installation of new equipment.  This report gives insight into the current state of the RFE's energy industry, trends for its future development, and outlines business prospects for U.S. companies and firms interested in exporting new technologies, consulting services, and equipment.”

To review this report, visit (short registration required):

http://www.usatrade.gov/website/mrd.nsf/MRDurl/IMI_RUSSIA_REQ_ENERGY-SECTOR-IN-THE_0080BFC6

"SOLAR TODAY" ARTICLE ON NATIVESUN

The May-June 2002 issue of Solar Today, published by the American Solar Energy Society, features an article on coalition member company NativeSUN of Kykotsmovi entitled “Powering Native American Lands.”  Describing the growth and success of this majority Hopi-owned solar electric design, installation and maintenance corporation, this issue can be obtained at newsstands or by visiting http://ases.org/soltoday/.

Additional member-only updates are provided to coalition members as events warrant.  If your business or non-profit organization is interested in coalition membership, we would be happy to provide information upon request.

Please continue to keep in touch on any matters related to energy issues and let us know if we can provide any help or information to you.

Craig Cox, Executive Director

Michael Neary, State Director

Arizona Coalition for New Energy Technologies

www.newenergytechnologies.org

623-587-6432

Arizona has one of the nation’s richest resource bases in new energy technologies and is a leader in advancing these technologies through public policy mechanisms.  We encourage environmentally responsible economic growth through the efficient use of Arizona’s abundant and clean sources of energy.