Solar industry slow to take hold in San Juan County

James Fenton
The Daily Times

FARMINGTON - Despite being blessed with an average of 268 days of sunshine each year, San Juan County's solar industry has slowed to a crawl.

But statewide, courtesy of more receptive counties in the southern half of the state, renewable energy technologies are seeing upticks in activity. Nationwide, 32 percent of new electric generating capacity came from solar last year. A record 6,201 megawatts of solar photovoltaics or 20 gigawatts of total installed capacity, according to a March report by the Solar Energy Industries Association.

In New Mexico, The Solar Foundation said that the renewable energy industry is relatively steady with around 1,600 solar jobs statewide, down slightly from the year before.

Neighboring Colorado, by contrast, boasted 4,200 solar jobs, ranking 11th nationally among states where the "clean" energy has had greater acceptance overall from its residents and businesses.

"New Mexicans invested more than $23 million on residential solar systems last year and millions more on commercial solar systems," said Regina Wheeler, CEO of Albuquerque-based Positive Energy Solar, in a Feb. 14 press release. "Solar installations create thousands of skilled, local jobs in our state, where the economic and jobs outlook has been challenging. Positive Energy Solar filled 30 new positions in 2014, hiring engineers, project managers and tradespeople as well as marketing, sales and administrative professionals. As a state with an incredible solar resource, we have a real opportunity to create jobs and meet our energy and environmental goals through policies that promote solar."

Mark Gaiser, program manager for the New Mexico solar market tax credit, part of the state's Energy Conservation and Management Division, said that incentives for residential solar systems are available, with more takers occupying southern counties in the state.

Last month, Gaiser released economic data on residential solar throughout the state that included San Juan County that showed an average of 82 state solar projects per county in 2014 at an average cost of $26,285 per project.

"You look at where it's going in, San Juan County is number 12 in the state. In 2014, San Juan County only had four installations," Gaiser said. "San Juan County is roughly the same population size as Taos, which had 23 systems (installed) in the same year. Sandoval County had 93 put in last year. Dona Ana County was three times the state average. Sandoval has done a little bit better than the state average per capita."

He noted that many well sites in the San Juan Basin are outfitted with solar panels to run the well's systems.

"San Juan is oil, gas and coal country and not necessarily exposed to solar, although you look at the well heads at their installations (in the oilfield). They're mostly solar at every one of them," Gaiser said. "It just depends on who you work with and who you talk to that might decide whether or not to invest in a system."

Gaiser administers the solar market development tax credit, implemented in 2008, which offers a 10 percent credit off the purchase price on a solar photovoltaic, or PV, system or solar heating system in a house. The state's 10 percent tax credit can be added to a federal tax credit of 30 percent off on the purchase of solar arrays. Both credits are set to sunset in 2016, though state legislators could change that.

Gaiser said that aside from the incentives, a phenomenon called the "neighbor effect" has led to increased solar infrastructure being installed in concentrated areas.

"If your neighbor puts a system on a roof then in a few years the neighbor's neighbor says, 'Hey, I'd like that too,'" he said.

The stability of paying a loan for a solar array might be more palatable than watching utility costs vary month to month and might offer people who make the change to a solar system a greater peace of mind, he said.

One of those who is enjoying the reassurance of predictable costs each month is Hydro Pure Technology, Inc., in Aztec. In 2011, Operations Manager Mike Talovich said the company had had enough of monthly utility bills in excess of $3,000 and looked to renewable energy to help. Lining up federal and state tax credits totalling 40 percent with cash reserves and a net-metering agreement with Aztec, the oil field service company that sits on seven acres off North Light Plant Road installed a solar PV array on two acres at a cost of $800,000. Living Solar, in nearby Durango, Colo., did the work.

Talovich said the system generates more power than the company can use, and while the project replaced their utility bill with a bank note, by 2021 when the loan is paid off, Hydro Pure will finally begin to enjoy a return on its investment, a minimum of $36,000 on utility costs annually, he said.

"We use a lot of electricity here and we'd wanted to do a solar project for a long time, so lining up all these pieces of the pie were essential to it happening," Talovich said. "That's the only way it could have worked out, having all those pieces line up at the same time."

Consolidated Constructors in Farmington builds homes and related construction services. Owner Joe Kozimor started an offshoot business, King Sun Solar, eight years ago because he said he could not get anyone locally to instal solar panels, but business has not been good.

"I've always liked solar. We built a house eight years ago and couldn't get anyone to do it, so we wound up having to go into business ourselves," Kozimor said. "We originally had about 10 or more installations a year the first two years, but then it really dropped off, the last few years, especially."

Kozimor said that while King Sun Solar will be installing a PV system at a local business soon, the lack of projects has meant he has no employees on staff for renewable projects.

"Maybe if the price of gas goes up, people will put more into renewables," he said. "But I'm not seeing it in the marketplace right here right now."

Paul Gessing, president of the Albuquerque-based Rio Grande Foundation, said the costs associated with renewables like solar inflict economic pain on New Mexicans and benefit an industry that has questionable job numbers.

"The issue is one where it's concentrated benefits and dispersed costs," Gessing said. "Without these incentives, they'd be out of business, by and large. You're essentially flushing money down the toilet. We hear a lot about green jobs, but there's not a lot of sustainable green jobs, despite the hype. Green jobs have been shown to be overblown. And what's the end result? We're seeing higher electricity prices."

Gessing cited the state's Renewable Portfolio Standard, which originated in Senate Bill 43 and was signed into law by then-Gov. Bill Richardson. Expanded in 2007 by Senate Bill 418, the mandate requires 20 percent of New Mexico's power generation come from renewable energy technologies like solar.

A 2011 Rio Grande Foundation study argued that the laws over a period from 2011 to 2020 will cost an additional $2.3 billion over conventional power sources and sacrifice an average of 2,859 jobs.

Tom Munson is the former director of the renewable energy program at San Juan College, which was shuttered last year, which he said has left him bitter.

"There's no solar industry here. Practically nothing," Munson said. "The program always relied on students coming from outside the area. Roughly 85 percent of the students came from out of the state, and most of them leave the area when they had completed their training."

Munson said Farmington and Aztec have shown a progressive streak with their net-metering agreements, which govern the selling of solar-generated power back to the utility, but a fossil-fuel-based mind-set and a perception of high costs have, for now, blunted what he thinks should be a booming sector of the renewable energy industry in San Juan County.

"As a whole, the industry is growing rapidly. It's the fastest growing sector in energy in the U.S. and, no doubt, in the world," Munson said. "But you wouldn't know that living here. Most people don't know a megawatt from a mastodon."

Munson said the proposed plan to shut down two of four units at San Juan Generating Station and increase renewables by more than 5 percent - which includes a 40 MW solar plant - as replacement power for lost coal is not enough.

"It's lip service and a dot on the page in terms of their generation. They're huge plants. They're doing it for the glory of it," he said. "The motive is (public relations) and because they're required to. What PNM is doing is great, but they could do more. And they should. But at least people are starting to think about it and that spreads awareness. That's something."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621 and Follow him @fentondt on Twitter.