Arizona energy regulators weigh fate of state's solar power subsidy


In what could prove to be a seismic development for the U.S. rooftop solar industry, utility regulators in the state of Arizona are finalizing a two-day hearing on the future of its net metering regulations.

A case brought by Arizona Public Service (APS) – the largest utility provider in the state – has sought regulator amendments to the state's net metering scheme. APS have urged state regulators to either add a charge to solar customers' bills or lower the price at which the utility purchases the excess clean power their solar panels generate.

Their argument is that homeowners with solar panels fitted receive all the benefits of grid connection, but do not pay their fair share in its upkeep. The state's net metering scheme has proved immensely popular, with new systems being added at a rate of 500 per month thanks to falling equipment and installation costs.

However, APS argue that $18 million in grid maintenance and distribution costs have been shifted to non-solar customers. If the commission overseeing the hearing chooses to adopt the proposals put forward by APS, then many of the leading U.S. solar providers – including Sunrun and SolarCity Corp – could see a significant erosion in their chief key selling point: namely that by installing solar panels on one's roof, monthly payments come in lower than average utility bills.

If the motion is passed it could have serious repurcussions on not only Arizona's residential solar industry but also the additional 42 states that have similar schemes. So far, none of these states have rolled back any of their solar net metering initiatives.

Running scared

As the second-largest solar producing state in the U.S. (after California), Arizona's growing appetite for solar appears unabated. The state's solar industry employs more than 10,000 individuals and has responded to APS's proposals by launching a $335,000 advertising campaign aimed at convincing Arizona residents to harness the power of the sun. In response, APS has embarked on a $3.7 million lobbying campaign in an effort to win the public over to their cause.

"The truth is, APS is afraid of the competition and doesn't want to give consumers the control," said SolarCity CEO Lyndon Rive.

The five members that form the commission are expected to vote on the issue later today, with the Arizona Corporation Commission reported to have recommnded that the commission takes no immediate action but instead evaulates APS's claims at the next rate case, due in 2015.

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