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

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. 

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 fourth PV CellTech conference dedicated to solar manufacturing in the USA. From polysilicon, wafers, ingots, cells and modules, to critical component suppliers including glass and frames, the event connects every stage of the value chain under one roof. PV CellTech USA also brings together investors, innovators, manufacturers and industry stakeholders to collaborate and strengthen domestic solar manufacturing across the United States.

Read Next

Premium
August 7, 2026
PV Tech Premium spoke with several industry analysts about the FCC inverter ban and how it will impact the US solar industry.
Premium
August 7, 2026
Wood Mackenzie’s Joseph Shangraw discusses the challenges facing the US plug-in solar market and the pathway to wider adoption.
August 7, 2026
The US introduced a 15% tariff on imports of products using polysilicon and set minimum prices for polysilicon and its derivatives.
August 7, 2026
Solar module manufacturer Heliene has laid off 93 employees at its Mountain Iron solar module assembly plant in the US state of Minnesota.
August 7, 2026
Array Technologies reported revenue of US$342.1 million, gross margin of 29.1% and adjusted gross margin of 30.8% for Q2 2026.
August 6, 2026
Clearway Energy generated and sold 3,585GWh of solar power in the second quarter of 2026, up from 2,800GWh in Q2 2025.

Upcoming Events

Solar Media Events
October 13, 2026
San Francisco Bay Area, USA
Solar Media Events
November 3, 2026
Málaga, Spain
Solar Media Events
November 24, 2026
Warsaw, Poland
Solar Media Events
February 2, 2027
London, UK
Solar Media Events
April 20, 2027
Istanbul, Türkiye