Arizona’s TEP proposes new punitive rate structure for rooftop solar customers

May 15, 2017
Facebook
Twitter
LinkedIn
Reddit
Email
The new proposals see surplus fees for solar users, and a decline in credits for excess solar power. Source: Tucson Electric Power

Arizonan utility Tucson Electric Power (TEP) has proposed a new rates structure for rooftop solar customers that would cut solar credits and instate time-of-use (ToU) rates.

This proposal is the second instalment of a rate case the utility filed with the Arizona Corporation Commission (ACC) in February. The first part proposed a US$8.50 increase on an average electricity bill compared to November 2015 rates.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

This new proposal attempts to come up with new pricing options for solar customers, after net metering was formally ended in the state in December last year. In its filing TEP proposed an export rate of 9.7 cents/kWh for excess solar power, compared with the current rate of around 11.5 cents/kWh – with the retail rate standing at around 13-14 cents/kWh.

The utility also proposed demand charges and a US$4 meter-reading charge for solar customers, as well as a ToU rate structure. ToU rates are based on the time of day electricity is used and the cost of supplying electricity to a consumer at that time. If electricity is used during off-peak hours, the rate will be lower than the standard flat rate. Likewise, on-peak hours will cost more than the standard rate.

Customers will be forced to choose between a ToU rate with a monthly grid-access fee of US$3.50/kW or a ToU rate coupled with a demand charge based on their highest hourly energy usage during the month.

Last summer, fellow Arizonian utility APS submitted a request to implement a mandatory demand charge for residential customers.

The utility says that the changes to existing rate structure and pricing are needed to fairly bill solar customers for their use of the grid. Whilst TEP argues that the changes would “allow customers to realise significant savings by going solar”, according to TEP spokesman Joe Barrios, industry advocates say the changes fail to take into account the full benefits of solar.

“Solar customers are investing their own money to do something that benefits everybody, so it doesn’t make sense to go out of our way to charge them exorbitant fees,” said Court Rich, vice president of the Arizona Solar Energy Industries Association.

The proposals are subject to approval, rejection or modification by state regulators. 

16 June 2026
Napa, USA
PV Tech has been running PV ModuleTech Conferences since 2017. PV ModuleTech USA, on 16-17 June 2026, will be our fifth PV ModulelTech conference dedicated to the U.S. utility scale solar sector. The event will gather the key stakeholders from solar developers, solar asset owners and investors, PV manufacturing, policy-making and and all interested downstream channels and third-party entities. The goal is simple: to map out the PV module supply channels to the U.S. out to 2028 and beyond.
13 October 2026
San Francisco Bay Area, USA
PV Tech has been running an annual PV CellTech Conference since 2016. PV CellTech USA, on 13-14 October 2026 is our third PV CellTech conference dedicated to the U.S. manufacturing sector. The events in 2023, 2024 and 2025 were a sell out success and 2026 will once again gather the key stakeholders from PV manufacturing, equipment/materials, policy-making and strategy, capital equipment investment and all interested downstream channels and third-party entities. The goal is simple: to map out PV manufacturing in the U.S. out to 2030 and beyond.

Read Next

January 19, 2026
US solar firm SunPower has signed a letter of intent to acquire California-based residential and commercial installer Cobalt Power Systems in an all-equity transaction. 
January 19, 2026
Solar PV has met two-thirds (61%) of the US electricity demand growth in 2025, according to a report from think tank Ember.
January 19, 2026
Last week, the Chinese Ministry of Commerce (MoC) issued its final review ruling regarding anti-dumping measures on solar-grade polysilicon originating in the US and South Korea.
January 16, 2026
Global tech giant Amazon has been approved as the buyer of the 1.2GW Sunstone solar project in Oregon, one of the largest solar PV projects in the US.
January 16, 2026
US C&I solar developer Altus Power has acquired four solar projects with a total capacity of 105MW from IPP Cordelio Power. 
January 16, 2026
The Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office (USPTO) has partially ruled against solar manufacturer Maxeon in several claims against Canadian Solar.

Upcoming Events

Solar Media Events
February 3, 2026
London, UK
Solar Media Events
March 24, 2026
Dallas, Texas
Solar Media Events
April 15, 2026
Milan, Italy
Solar Media Events
June 16, 2026
Napa, USA
Solar Media Events
October 13, 2026
San Francisco Bay Area, USA