Ted Simons: Solar energy leaders are gathering for the fourth annual P.V. power plant conference joining us now is a participants in this year's conference, Greg Watkins, president and CEO of a California-based Native American owned renewable energy company. Good to have you here.
Greg Watkins: Thank you for having me.
Ted Simons: The goal of this particular solar conference, utility scale?
Greg Watkins: Yes. The goal is to update everybody on the advances and the complex tease associated with large scale generation of power, both privately and on Native American lands and how they can be tied into the national grid and the local grid.
Ted Simons: What is the state of the solar industry right now?
Greg Watkins: There's quite a bit of flux in the photovoltaic as prices are continued to drop precipitously in the cost of panels. Over five years they have dropped 50%. Now large scale project, about $1.5 a lot. The price has dropped, putting some technologies out of business, so there's a shake-up from continued technological advances.
Ted Simons: Compare if you would rooftops with the large scale systems.
Greg Watkins: Well, rooftops are limited to the size of your roof, which typically on a one-or two story building would only supply maybe 30% of the load of the building underneath it whereas a farm is out of the way, less valuable piece of land where you can distribute completely the energy efficiently to different users that may not have the opportunity to do it themselves.
Ted Simons: Is that a more vibrant aspect than rooftops now?
Greg Watkins: Yes. The industry is consolidating. It's cheaper to do bigger scale projects, less disruptive. There's less liability issues with leakage, smaller systems are just more complex than large unified systems.
Ted Simons: Now as far as tribal lands are concerned, this is a focus of what you do, what are you seeing?
Greg Watkins: Well, the Native American nations all are nations. They have excellent opportunities because their solar insulation is so good. Lots of times powerlines cross their property, so we work with Native American tribes to help them own the systems. So others in the past have leased land from them, but we bring the equity, financing and all that, we take a reduced equity position and training them to own their own systems to export first self-generate for their conditions and administration and schools, then also to export off to the Department of Defense or other off-takers that actually have to take power from Native American tribes.
Ted Simons: Are you seeing that aspect of the industry develop?
Greg Watkins: It's trying to. It's complex because the tie-in spots are very complex and very expensive. The process just to make an application is over a quarter million dollars. So that's at risk a little bit. It's very difficult, but yet in California, the solar pipeline is already full through 2017. They have more projects than they can take. They are at a 33% renewable energy portfolio standard and are going to take it up to 40%. That's one thing Arizona could do.
Ted Simons: I was going to say, that's California. We're in Arizona. Why are we not the solar leader of the world?
Greg Watkins: You actually have the best sun in the world in Arizona and northern New Mexico. Better than California. One of the reasons is, well, you have cheap energy. You have nuclear power and natural gas. Both of them have other consequences like long term storage of nuclear materials and carbon thrown into the atmosphere, none of which happens with solar. A feed-in tariff would help, but a higher renewable energy portfolio standard would drive innovation, drive investment to come to Arizona to capture your natural resource.
Ted Simons: Seems like an advancement on the standard we already have may be a long while in coming. Feed-in tariff. What exactly is that?
Greg Watkins: It's the price people pay for power. There's grid stability. A years ago somebody in Arizona flipped the switch an it blacked out all of Southern California. When those sort of issues -- that was -- that lost business and all kinds of stuff. Grid security, national security, portfolio spread, all coming into the energy mix of the United States.
Ted Simons: As far as manufacturers and developers are concerned it seems this is such a developing market, things change so quickly. Talk about durability with costs and how to prepare for the future.
Greg Watkins: Well, the technology is changing very fast. A lot of money is going into the market. Pretty much anything that is a utility scale project has very good warranties backed up by big companies with insurance and so it's getting more and more feasible, the cost has dropped, reliability is going up. Arizona is manufacturing quite a few panels.
Ted Simons: It is. What do you see for the future of Arizona as far as solar is concerned?
Greg Watkins: If they change their RPS, you'd have a lot more entrepreneurial developers coming in to do projects here. Without that I think that you're going to -- you're setting up solar to compete against nuclear and coal, and gas. So it's going to have a hard time on a pure price point basis all thought price is getting close to grid parity right now.
Ted Simons: Interesting. Good to have you here. Thanks for joining us.
Greg Watkins: Okay.