These are sunny days for Arizona's solar-energy industry, with photovoltaic panels sprouting up on rooftops and major utility-scale installations planned across the state.

But some see clouds forming.

Land and water issues, including restrictive public-land-use policies and opposition from some environmentalists and neighbors, have stalled some major projects, a report by a University of Arizona law professor concludes.

Some of the most promising large-scale solar technologies - thermal systems that concentrate sunlight to make steam that runs generating turbines - may require too much land and water to be cost-effective and environmentally sound, says UA law professor Robert Glennon.

"It takes a heck of a lot of water, a heck of a lot of land, and we don't have lot of either; that's uncontested," said Glennon, co-author of "Solar Energy's Cloudy Future," published in November in the Arizona Journal of Environmental Law & Policy. UA law student Andrew Reeves was co-author.

Glennon gained some fame - and a TV spot on Comedy Central's "The Daily Show With Jon Stewart" - with his 2009 book "Unquenchable: America's Water Crisis and What To Do About It."

Following up on an analysis of water use in renewable power generation in "Unquenchable," Glennon looked at the land and water demands of technologies such as solar thermal power plants, which use sun-heated water to power steam turbines.

Land and water limits

In his paper, Glennon notes that solar photovoltaic plants - which harvest electricity directly from sunlight - are not likely to become price-competitive with fossil-fuel resources anytime soon, even with subsidies. Solar thermal plants are potentially competitive but run afoul of limited and contested water and land resources, he said.

Glennon cites initial solar-energy rules issued by the federal Bureau of Land Management in June 2010 that disqualified hundreds of thousands of acres of public lands from solar development for environmental reasons. The rules also set solar-plant lease rates, which are in some cases five times the rates for agricultural uses.

Those costs - and the prospect of contentious permitting processes - have made developers and lenders reluctant to build big solar projects, he said.

Farming for solar

One large concentrating solar thermal project in Arizona is under way. Solana, a massive, 250-megawatt plant near Gila Bend, broke ground in December, just in time to qualify for expiring federal incentives including an upfront cash grant.

The plant, which will deliver power to Arizona Public Service Co., is being built on private farmland acquired by Spanish solar developer Abengoa Solar. When finished in mid-2013, it will be the biggest plant of its kind in the world, generating enough power to serve 70,000 homes. The water-cooled plant will use groundwater from its own wells, though Abengoa says it will consume 75 percent less water than the prior farm user.

Siting can still be an issue, even on fallow farmland. Solar developer Fotowatio Renewable Ventures recently won Pima County approval to build a 25-megawatt capacity photovoltaic plant that will serve Tucson Electric Power Co., on about 300 acres of former farmland owned by Tucson Water in Avra Valley.

But plans were held up for two months amid opposition from neighbors, who fear the massive project will destroy their rural views and hurt property values.

Solar remains costly

A top TEP official said he agrees with many of the report's findings.

"I think the report was very balanced and really addressed a lot of issues we've seen over several years going into developing solar," said David Hutchens, executive vice president of TEP and parent UniSource Energy Corp.

Hutchens, who oversaw a major solar expansion at TEP in the last few years, said the company's solar strategy already addresses many of the report's concerns in siting solar plants, including land and water issues.

But he said solar "has never boomed, and it hasn't busted. It's just that these projects are more delayed and are taking longer, especially the large ones, than was anticipated."

Solar costs TEP more than double what it pays for coal generation, at between 16 and 20 cents on a basis adjusted for its intermittent, daytime-only use.

Solar looks more attractive looking forward if you factor in the "avoided cost" of building new coal or gas-fired power plants, Hutchens said.

For now, TEP plans to focus on smaller solar projects- most recent ones are under a couple of megawatts - and exploring new, higher-efficiency technologies, he said.

Harnessing big roofs

TEP recently launched a program offering to lease space on commercial rooftops for large installations to boost economies of scale.

Home rooftop installations, subsidized by state and federal tax breaks and ratepayer surcharges, involve more customers and draw investment but are costly, Hutchens said.

"The one-roof-at-a-time model is very expensive - it might eventually save an individual homeowner money, but that is being paid for by other people, so from a societal perspective it's more expensive," he said.

Kris Mayes, a former Arizona Corporation Commission member who now heads a project on law and sustainability at the Arizona State University College of Law, said she agrees with Glennon's concerns over land and water use and its cost.

"(But) I think most of his concerns are overstated. Most solar projects are not going on public land and most are not water-cooled concentrating (thermal) plants," said Mayes, who helped boost the state's renewable energy standard while serving on the Corporation Commission from 2003 to the end of last year.

To Mayes, subsidies for renewable energy are an investment in a cleaner energy future.

"As a country, we've always invested in forms of energy that are good for our future, and we're doing that now with renewable energy," Mayes said. "Do we need to wean off those subsidies? Absolutely. And I think you're going to see that happen."

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