Home Solar in Arizona Takes Hit After Vote by Corporation Commission to Add Surcharge
"Despite having some of the best solar resources in the nation, Arizona now has one of the shakiest policies for encouraging its development," Resch says.
One thing made clear at yesterday's day-long Corporation Commission hearing yesterday was that both current and future home solar customers have no guarantee their solar system will save money over the long haul.
The vote sets the stage for increasingly larger fees in the coming years that APS insists are needed to protect non-solar customers. The commissioners said repeatedly that their actions do not prevent a future commission from imposing fees on existing customers, despite their intention that existing customers are grandfathered-in for a 20-year period.
One ACC staff member noted during Thursday's hearing that some solar users claimed they had a 20-year contract with the utility, but that such a claim was uninformed.
Commissioner Bob Burns
Court Rich, a Scottsdale lawyer and representative of the solar-installation companies, told the commission that contracts between the companies and their customers do not guarantee any net-metering number.
Essentially, that means that companies like SolarCity and SunRun cannot really promise customers will save money over the life of the lease, even if overall electric rates go up over that time, because the amount paid by the utility for the excess electricity generated can change dramatically on the whims of the Corporation Commission.
The possibility that solar customers were over-promised led to a discussion about whether solar customers should have to sign a separate document indicating they understand the possibility of saving money is not set in stone.
Chairman Stump also pressed solar boosters to comment on a statement by SolarCity spokesman Will Craven that "power generated (by home solar users) never touches the grid."
Rich admitted that the power does "touch the grid at times." Stump also read a 2009 statement by SolarCity CEO Lyndon Rives that acknowledged the company's customers typically remain connected to the grid. Stump said he had to conclude that Craven had been "engaging in rhetoric."
The critical questions by Stump, the general skepticism of the solar advocates' claims and the late-evening, pro-cost-shift vote lent a clear anti-solar atmosphere to Thursday's proceeding. With no Democrats or solar believers on the five-member panel, the lack of support by the commission for rooftop solar power was palpable.
Yet the arguments of the solar companies, as we pointed out in our July feature article, have several weak points. As was brought up in the hearing yesterday, APS has simple math on its side.
One reason we agree with this argument: Imagine if 100 percent of APS' residential customers had rooftop solar under the current net metering scheme, which requires APS to pay retail rates for the semi-wholesale power. That's a ridiculous business model that would cause the utility to go broke, meaning it would be unable to provide the power those same customers need during part of the day and at night. (The utility's argument, of course, is that it would have gone broke long before all customers had solar.)
Hugh Hallman, attorney and former Tempe mayor
Rich also claimed that since the average APS bill was $71 a month, math dictates that half of customers therefore pay less than average and aren't paying what APS would call a fair share for grid services, just like APS claims solar users aren't paying a fair share. Rich said that home-solar is identical to taking energy efficiency measures like turning off appliances and planting shade trees.
"Every single customer who pays less than average is getting a free ride," Rich said.
But that analogy's flawed. In fact, home solar users have three distinct phases of electricity use: When they use nothing but the utility's juice, when their generation outstrips personal demand and the excess juice is exported to the grid, and when their solar systems take care of their personal demand. Only in the latter phase does the solar system resemble energy efficiency.
The commissioners repeated that they were concerned for the non-solar customers being affected by solar subsidies like net metering.
Brenda Burns told the story of a senior citizen she knows who carries a space heater from room to room in the winter instead of using central air, hoping to save as much on her electric bill as possible. It would be wrong for solar users to drive up costs for that woman, she argued.