Tucson Region

Part IV: Alternative energy comes to the fore

"My friends, I promise a hybrid car in every garage, a solar panel on every roof and a mini-refinery in every back yard." No politician has yet made that promise, but alternative sources of energy are getting their biggest boost in decades with a confluence of tax credits, high energy costs and worries about the future supply of oil and natural gas. Next year, federal tax credits up to $2,000 will be available for 30 percent of the cost of buying and installing home solar-energy systems. Buyers of hybrid cars can get a federal tax credit based on fuel efficiency that tops out at $3,200 or so for the Toyota Prius. Arizona offers a solar tax credit for 25 percent of a system's cost, up to $1,000, and many of the state's utility companies will rebate a portion of the expense of installing a system that is tied into the electric grid. For 2006, Tucson Electric Power's rebate will be $2,400 per kilowatt. In 2003, a 1-kilowatt system cost about $8,500 to buy and install through TEP. TEP spokesman Joe Salkowski said interest in solar has already increased. TEP added more residential solar to its grid in the first six months of this year (126 kilowatts) than in all of last year (120 kilowatts). Depending on energy use, it would still take a customer a decade to amortize the cost of a system, even with rebates and tax credits, said Salkowski. Price, though, is usually not the main motivation for installing solar, he said. That's been the story with alternative fuels as well, said Rick Hittle, division manager for Arizona Petroleum, which sells several blends of ethanol and biodiesel. It was "kind of a niche product" with most sales going to companies such as Raytheon and Tucson Electric Power, which had tax incentives to buy fuel that was 20 percent soy-bean-based biodiesel. Hittle said he had a few customers who bought it simply for its clean-burning properties. "They paid the extra and just said, 'That's what I'm doing.' I had to admire that." Now, with higher gasoline and diesel prices and a federal "blender tax credit" of up to 99 cents a gallon for fuel containing biodiesel, the fuels are competitive, if not cheaper. City and school-district buses are using it, as well as owners of diesel cars and trucks. "We're having a heck of a time keeping up," Hittle said. Megan Hartman, co-owner of Fourth Dimension Fuels, sells biodiesel and natural foods from a storefront in Oracle and hosts regular meetings of a biodiesel group in Tucson. She said people have many noneconomic reasons for using fuel that is grown domestically. She tries to keep the group focused on the fuel and its use to avoid long, divisive discussions about the politics of energy. "I'm definitely not one of those progressive liberal types who likes to sit around complaining about things," she said. Hartman was living in Maine, pursuing a graduate degree in psychology, when a friend interested her in biodiesel. They collected used grease from restaurants, added lye and methanol, then heated it to cause the reaction that produces the fuel. At first the restaurants "were happy to sell it to some wackos making biodiesel in their back yard," she said. Then it began to catch on and the restaurants began to charge for their waste grease. Hartman now buys biodiesel from Arizona Petroleum that is refined from soybeans in Colorado. She said she'd love to have a recycled source. Some group members are collecting used oil from restaurants and making their own. One Tucson company, Grecycle, is collecting regularly from a number of restaurants and plans to begin selling biodiesel next year. Recently, two members of Hartman's discussion group began an experiment aimed at making biodiesel from algae grown in backyard tubs. New alternatives and fuel efficiency can't come too soon, said Steve Andrews, co-founder of the U.S. Association for the Study of Peak Oil & Gas. Andrews said his group doesn't buy into the "imminent disaster scenario." But he said we have a decade or two at most to mend our ways and we need to start now. "In the next 10 years, we can avoid 2.5 million barrels a day by an extremely rigorous improvement of our fleet. Of the 235 million vehicles licensed today, only 275,000 are hybrid electrics," Andrews said. We won't run out of oil, said Ernest Moniz, professor of physics at the Massachusetts Institute of Technology and a former undersecretary of energy, but the Oil Age will end "in the coming decades. Whether it's one or five is hard to predict." Moniz, who is heading an institutewide study of the global energy crisis, said there is plenty of oil in the Earth, but it will get increasingly hard to find and extract. Its cost and its poorer quality will make alternatives more attractive. "It was a Saudi oil minister who said, 'The Stone Age did not end for lack of stones and the Oil Age will not end for lack of oil,' " Moniz said. "Oil over time, putting aside fluctuations, is going to get more and more expensive," he said, making efficiency and alternatives more attractive. It will take a combination of technological breakthroughs and policy changes to make a transition to a post-oil world, Moniz said. MIT won't find a single magic answer. "We certainly intend to come up with some stuff that's going to help, but I don't want to, in any way, underestimate the nature of the challenge, particularly with climate change. "I'm neither a pessimist nor an optimist, but we should really be working hard to do this today," Moniz said.