Utilities and solar groups both claiming victory in Arizona rooftop showdown

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Both sides in a dispute over a plan by utilities in Arizona to increase their share of the rooftop solar market have claimed victory, as the proposals were approved, but in significantly amended form.

The US state’s utility regulator, Arizona Corporation Commission (ACC), ruled that Tucson Electric Power and Arizona Public Service will be allowed to proceed with plans to install solar on their customers’ rooftops, at no upfront cost to those customers, instead paying them a small monthly fee for doing so. However, the utility companies must introduce their respective programmes at a reduced scale to original proposals, which would have seen them installing around 30MW of solar across 3,000 residential rooftops.

Instead, the companies will be allowed to run their schemes as pilot programmes, installing only around two-thirds that number of installations in total. They will be permitted to charge a monthly fee that is around the same rate as residents are currently paying as electricity bills, but which will be fixed for 25 years.

The TEP and APS plans vary slightly, with APS offering a small rebate to homeowners who host utility-owned PV systems and no upfront cost, while TEP is asking for a US$250 initial connection fee. Neither, however, has been allowed to proceed with plans to charge all their ratepayers to recover the costs of implementation.

In addition, the utilities have also been instructed by ACC that the programmes must be used as trials of the impact of rooftop solar generation being fed into the region’s grid networks. The issue of grid connection, and the impact on supply and demand and grid frequency of increased solar PV penetration, has previously been cited by utilities as a reason for their apprehension toward solar in some instances. The utilities had also asked for the freedom to pick and choose which customers would be eligible for the schemes, but has been given certain limitations.

The news was reported by several local media outlets over the weekend. Arizona Corporation Commission has not issued a full public statement on the matter.

Solar advocacy groups The Alliance for Solar Choice (TASC) and Tell Utilities Solar Won’t Be Killed (TUSK) reacted quickly and positively to the news. Both groups broadly favour net metering for the US residential market, a business model adopted in a clear majority of US states and mostly the domain of leasing companies such as SolarCity.

TASC, whose nucleus is formed largely by a number of US rooftop solar leasing companies and their supporters, and TUSK, headed by former US Congressman Barry Goldwater JR, issued statements to the effect that neither utility was able to push forward their plan in an unadulterated form and therefore saw it as a victory.

TUSK said the ruling by ACC “significantly” restricted APS and TEP from an attempt to “enter the private rooftop industry” and hailed it as a “good faith effort from Arizona regulators to rein in such attempts following the rejection of similar proposals in Colorado, South Carolina, and Washington states”.

“The ACC protected the integrity of the free market by refusing to grant solar program cost recovery to APS and TEP, telling the utilities that they must proceed with the programs at their own risk.  Further, the ACC drastically restricted those programs through a compromise that limits them to ratepayers with low credit ratings, and pilot research projects.  The utilities were not permitted to use captive ratepayer dollars to fund a rooftop solar program which would expand their monopolies and allow them to unfairly compete with private sector rooftop solar providers.”

TUSK did point out, however, that while the pilot schemes have been permitted to go ahead from early next year under the condition that they are conducted for the aforementioned purpose of grid research, its affiliate TASC had offered to conduct a similar study for ACC at a tenth of the cost, an offer which was rejected.

TASC’s statement also sounded a triumphant tone.

“The Arizona Corporation Commission (ACC) protected electricity competition and choice today for Arizonans. The investor owned utilities Arizona Public Service (APS) and Tucson Electric Power (TEP) were not granted the ability to use ratepayer money for unrestricted rooftop solar programs,” the statement read.

“TASC supports this decision to protect consumer choice and rooftop solar growth. The ACC rejected the utilities' original proposals, preventing the monopolies' attempts to push private sector companies out of business.”

TEP and APS also issued statements announcing the news, with both claiming success for having put the proposals through at all. TEP said the fact that customer credit scores would not be considered meant that in some cases, residents who were not eligible for private rooftop leasing could be included. TEP also offered a different take on the existing, leasing-based rooftop solar industry’s opposition to the plans, attempting to stir up local sentiment by deriding them as companies from “out-of-state”.

The proposals were opposed, TEP said, “by out-of-state solar lease providers who, in seeking to block the programme, would have limited the market for rooftop solar power systems in Tucson”.

TUSK recently conducted a survey of Arizona residents and found 77% of respondents would be less likely to vote for an election candidate if they proposed ending support for solar. Despite enjoying levels of solar irradiance considered a good fit for widespread solar deployment, the state has been the host of numerous battles between the incumbent energy industries and solar. These have included accusations of “dark money” being used to fund lobbying campaigns against solar energy and a proposed law to introduce property tax increases on homes that have solar installed.

When the latest schemes were first proposed earlier in the year, the national Solar Energy Industries' Association (SEIA) also came out in criticism of them, calling them a “trojan horse” which would allow utilities to increase the control the excercised over regional electricity markets.

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