ORIGINAL REPORTING: The Value Of Solar In Arizona

Arizona gears up for full cost-benefit solar value proceeding; Can a combination of cost-of-service and value-of-solar studies end the state's metering wars?

Herman K. Trabish | November 2, 2015 (Utility Dive)

Editor’s note: The proceeding described below is ongoing but recent reporting found stakeholders anticipating determinative conclusions in the foreseeable future.

Since 2012, solar advocates and the state’s dominant electricity providers, Arizona Public Service (APS) and Tucson Electric Power (TEP), have argued over how best to reimburse rooftop solar customers for the energy they send back into the system. At issue is whether to keep retail net metering, which pays solar owners the retail rate of electricity for the power they export to the grid, or whether to replace it and impose extra charges on solar owners. The stakes for both utilities and the solar industry are high. APS and TEP say retail rate NEM is cutting into their revenues and imposing unfair costs for grid maintenance on customers without solar power. The solar industry says eliminating net metering could stall the growth of rooftop solar in the state, limiting customer choice and slowing the transition away from fossil fuels.

click to enlarge

At the core of the argument is one question: How much is rooftop solar worth? On oct. 20, the Arizona Corporation Commission (ACC), the state's utility regulatory body, moved to address that question by voting 4 to 1 to open a generic docket on the utility-preferred cost of service [COS] and the solar industry-preferred value of solar [VOS]…If regulators conclude that distributed solar provides a net benefit to the grid, it could justify providing solar owners retail rate NEM remuneration, or a similar scheme for the energy they send to the grid. But if they find that solar imposes a cost on customers without their own generation, it could justify higher utility fixed charges or demand charges for system owners. click here for more

click to enlarge

Tweet