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

September 4, 2026
Inox Solar Americas has signed a 767MW module supply agreement with a US renewable energy developer and independent power producer.
September 4, 2026
News of two utility-scale solar PV developments in Texas, where construction began on a 347MW project in Wharton County and finances secured for a 310MW/250MWh pair of projects.
September 4, 2026
The US PV manufacturing sector is set to make huge strides by 2030, but with some upstream constraints unresolved and question marks over future demand drivers.
September 3, 2026
In this week's PV Chart of the Week, we look at disparity between announced and operational cell and module manufacturing capacity in the US across PERC, TOPCon and HJT.
September 3, 2026
PERC, TOPCon or HJT? In the fourth of five articles this week, Moustafa Ramadan and Joe Hennessy of PV Tech Research examine emerging technology trends in US solar cell and module manufacturing.
Premium
September 3, 2026
Heterojunction is emerging as the n-type technology of choice as US PV manufacturers seek to minimise IP-related risks.

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