Arizona votes on monthly fee for solar installations

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After a two-day hearing that prompted a 1,000-strong pro-solar rally and followed a multimillion dollar propaganda campaign from Arizona Public Service (APS), regulators from the Arizona Corporation Commission (ACC) voted in favour of imposing a monthly fee on residential solar customers.

The decision is being claimed as a victory of sorts for solar, with the approximate $5 per month surcharge some way short of the $50-$100 the APS had lobbied for. However, the president and CEO of the Solar Energy Industries Asssociation (SEIA), Rhone Resch, said he was ‘deeply troubled’ by the decision, claiming that it sets a precedent that could seriously jeopardize future solar growth and job creation in Arizona and beyond.

The result of the hearing had been anticipated far and wide throughout the U.S. As solar’s ‘second state’ after California, the decisions of Arizona’s energy regulators could have far-reaching consequences for the industry across the country. Utilities in California and Colorado have been pushing for similar rate increases on solar customers, fuelling SEIA’s fears that Arizona’s decision may trigger similar hearings elsewhere.

But the president of The Alliance for Solar Choice (TASC), Bryan Miller, expressed relief at the comparatively low surcharge of 70 cents per kilowatt for homeowners who benefit from net metering. "APS launched an unprecedented campaign spending millions of dollars to destroy the rooftop solar industry and they failed,“ he said. "This decision will allow our market to continue to grow."

A solar compromise

The 3-2 vote by the ACC was intended to serve as an initial compromise between the demands of APS – who claim that solar power customers who sell power to the grid via net metering do not pay enough for its upkeep – and the needs of the state’s solar industry, which is growing at a rate of 500 new customers a month.

The 70 cent per kilowatt fee equates to approximately $5 per month for an average Arizonan solar customer, and will only apply to new customers who install solar panels on their residential rooftops after January 1, 2014. The estimated 20,000 existing residential solar customers in the state will be exempt from the surcharge for 20 years.

Jim McDonald, spokesman for APS, remarked that the utility company was pleased that some recognition that solar customers should pay more had been made, but that it believes the amount is not enough to cover mounting costs.

"It will be exponentially millions of dollars more expensive later than it is now," he said. "And that will fall on the shoulders of our non-rooftop solar customers."

Passions stirred

During the course of the two-day hearing, an estimated 1,000 Arizonans gathered in front of the ACC building bearing placards protesting their support for solar. Inside, pro-solar passions also ran high. Vote Solar Initiative’s Director of Communications, Rosalind Jackson, told pv magazine that 100 solar supporters participated in the hearing. "There was a steady stream of solar workers, solar customers, non-solar customers, environmental advocates, retirees, veterans – and even one passionate 11-year-old girl – participating inside the hearing, urging the Commissioners to reject the fee," Jackson said.

"It was an impressive public support for rooftop solar following a contentious few months of public campaigning, during which APS spent millions of dollars on anti-solar ads." A recent Arizona state poll found that 81% rejected APS’s solar tax proposal, with 77% stating that they would be "less likely to vote for a Commissioner who ends solar savings," added Jackson.

APS’s anti-solar ad campaigns also came in for criticism from the SEIA. "We are very troubled by the public campaign of misinformation, manipulation and distortion engineered by APS," read a press statement from Resch. "This has never been a ‘subsidy’ problem as claimed by APS. Unfortunately, the utility exploited this debate and then used it as an opportunity to stymie competition, ‘stick it’ to consumers and bolster its bottom line. No one should be surprised. This is what monopolies do."

Pinnacle West, the parent company of APS, admitted earlier this month that it had spent a total of nearly $9 million on advertising and lobbying efforts to put an end to net metering in Arizona and to kill opposition to deregulation of the state’s utility industry.

The ACC rejected APS’s proposal to impose a larger fee on solar customers, with the compromise pleasing a number of the solar industry representatives who attended the hearing. However, the SEIA stated that it would still seek to ‘educate’ the ACC on the true market value of solar.

"Despite having some of the best solar resources in the nation, Arizona now has one of the shakiest policies for encouraging its development," said Resch.

"Hopefully, we can reverse this course in the future by working closely together. In the months ahead, we will continue our efforts to educate the ACC, as well as public officials all across the state, as to the true market value of solar, and the benefits it provides to local economies, grid reliability, consumer choice and environmental quality."