By Nichola Groom
Nov 14 Arizona on Thursday dealt a blow to the
state's largest utility by approving a monthly fee on customers
with solar panels that Arizona Public Service said was not
enough to offset the costs that those rooftop systems have
heaped on its remaining ratepayers.
The measure, approved by the Arizona Corporation Commission
in a 3-2 vote, was intended to serve as a compromise between APS
and the solar industry, which had fought to stop the utility's
efforts to change a solar incentive that has buttressed the
rapid growth of rooftop systems in one of the nation's sunniest
The fee of 70 cents per kilowatt would equate to about $5 a
month for the average solar customer in Arizona - an amount the
solar companies at the hearing said they could live with. The
charge will only apply to customers who install solar systems
after Dec. 31 of this year, meaning the 20,000 APS customers who
already have solar panels will not see changes to their bills.
The debate over the little-known solar subsidy called net
metering was being watched closely by utility and solar players
far beyond the Grand Canyon state. The two industries are
increasingly at odds over allowing homeowners with rooftop solar
systems to sell the power they don't use back to their utilities
at retail rates.
Rhone Resch, the head of the U.S. solar trade group, the
Solar Energy Industries Association, said in a statement
following the vote that he was "deeply troubled by today's
precedent-setting action," while at the same time applauding the
decision to allow customers to continue selling unused solar
power back to the utility.
Arizona is considered to be the biggest battleground on the
net metering debate, and APS spent $3.7 million on lobbying and
advertising efforts leading up to the net metering hearing.
Because of net metering, solar customers can end up with a
credit on their utility bills at the end of the month.
Typically, however, they still pay some amount to their local
Throughout the proceedings, APS argued that net metering
allows solar customers to avoid paying their fair share of the
cost to maintain the electric grid - thereby passing $18 million
in annual costs onto non-solar customers. The issue has come to
a head recently because of the dramatic recent growth in rooftop
solar. Systems are being added to APS' service territory at a
rate of about 500 a month, said APS, a unit of Pinnacle West
Capital Corp. Arizona was the nation's No. 2 state for
solar installations in the second quarter of this year.
Company representatives at the hearing said a charge of 70
cents a KW was not nearly enough.
"We are very concerned with the cost impacts of this
policy," APS' senior vice president of customers and regulation,
Jeff Guldner, told the Commission ahead of the vote. "We don't
think this proposal is in the best interest of our customers."
The compromise was hammered out between representatives for
the solar industry and the state's ratepayer advocate, the
Residential Utility Consumer Office, during the hearing on
Thursday in Phoenix. APS, however, never agreed to the terms.
The Alliance for Solar Choice, which represented a coalition
of solar financing and installation companies including
SolarCity Corp, Sunrun and Sungevity, had initially
pushed for any decision to be delayed until APS' next rate case
In the end, however, the solar companies decided that they
could still be competitive with a monthly charge of 70 cents a
KW. The average size of a solar system in Arizona is 7 to 8 KW.
Still, Bryan Miller, vice president of public policy and
power markets at solar financing company Sunrun, testified
during the hearing that even a $5-a-month charge would eliminate
the ability of some customers to save money by leasing solar
panels. He estimated that solar leasing companies, which
dominate the market in Arizona, are able to save their customers
between $5 and $10 a month, on average.