In Win for Solar, AZ Regulators Impose Negligible Fees on Rooftop Panels

Arizona regulators on Thursday voted to adopt a roughly $5 monthly fee for customers of the state's largest utility who install rooftop solar panels in a move that had the solar industry declaring victory over what it saw as an effort to topple its business.

The Arizona Corporation Commission's vote came after two days of talks and testimony from citizens and representatives on both sides of the issue as Arizona Public Service sought a monthly rate increase for solar customers of $50 to $100.

The commission's decision was being watched by utilities nationwide. Utilities in other states have been pushing similar arguments and seeking the same sorts of rate increases, so a victory in Arizona could have created momentum elsewhere.

"APS launched an unprecedented campaign spending millions of dollars to destroy the rooftop solar industry and they failed," said Bryan Miller, president of The Alliance for Solar Choice and vice president of public policy for solar company Sunrun, Inc. "This will allow our market to continue to grow."

APS spokesman Jim McDonald said the company was pleased that the commission recognized fees had to be charged for solar customers, but was disappointed at the small amount approved.

"It will be exponentially millions of dollars more expensive later than it is now," McDonald said, adding that there are roughly 500 new rooftop solar installations per month in Arizona. "And that will fall on the shoulders of our non-rooftop solar customers."

The commission's vote adds a fee of 70 cents per kilowatt. The average home operates a 7 kilowatt system, meaning homeowners would pay $4.90 per month. Existing solar customers are exempt from the fee for 20 years. It takes effect for all new customers Jan. 1, 2014.

APS currently has about 20,000 homes in its service territory with solar panels. A subsidiary of Pinnacle West Capital Corp., the utility serves 1.1 million home and business customers across Arizona.

The utility says homeowners with solar panels are benefiting from the grid's 24-7 power supply but avoiding much of the costs of maintaining power plants and transmission lines.

Under the current system, homeowners with solar panels are able to cut their bills by selling excess power at full retail price back to APS in a practice called "net metering." Combined with using the power from the panels themselves, net metering can cut customer bills by about two-thirds.

APS says that effectively shifts the costs of operating the huge power distribution grid to homes without solar.

The solar industry says APS is worried it will lose revenue if solar continues to grow, and that the company's proposal to charge solar users up to $100 per month would have decimated the industry by making it a losing proposition to install new solar panels.

APS had spent nearly $4 million on ads backing its proposal while the solar industry countered with about $400,000 in spending of its own.

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