By Nick Arnold
Arizonans are no stranger to the sun. With a statewide average of 286 sunny days a year, it makes sense that former Governor Jan Brewer made pushes to expand solar energy that elevated the state from sixth to third in the nation during her term. While we focus on the many other important issues, opponents of renewable energy are taking advantage to impair the viability of solar growth in one of the sunniest places in the country!
To start, let’s see where we are nationally. Per the National Renewable Energy Laboratory’s Open PV (Photovoltaic) Project, Arizona is:
- 2nd in total photovoltaic systems installed at 89,360, second only to CA.
- 4th highest in capacity at 1,647.16 MW.
- 13th lowest in average cost for installation at $5.14 per Watt.
When you think about it, it’s impressive that despite 12 states offering cheaper installation costs, only one state (the most populous and third largest in size, CA) surpasses us in installations. To introduce you to why that may be, I cannot understate the importance of learning about and following the Arizona Corporation Commission (ACC).
The ACC, as defined by the Arizona Constitution, is a five-person commission that is elected to regulate Arizona utility companies for fair treatment of the consumer. Current ACC Members:
- Commission Chairman Doug Little(R)(up for re-election in 2018)
- Commissioner Bob Burns(R)(term limited in 2020)
- Commissioner Thomas Forese(R)(up for re-election 2018)
- Commissioner Andy Tobin(R)(possibly term limited, up for re-election 2020)
- Commissioner Boyd Dunn(R)(up for re-election 2020)
Here is a brief history of ACC actions related to renewable energy and DG solar:
- In 2006, the AZ Corporation Commission approved the Renewable Energy Standard & Tariff, requiring that generated energy must be 15% renewably sourced by 2025.
- Since 2013, utility companies have prioritized utility-scale (these are huge solar farms) over rooftop solar (otherwise known as Distributive Generation, DG).
- Large utility companies have filed for rate changes with the ACC to both increase demand charges and eliminate net metering.
- Demand charges cover utilities’ grid maintenance costs, costs which are increased when a household photovoltaic system must connect to the grid.
- Net metering is the agreement between utilities and DG customers in which excess energy is sold back to the utility for the wholesale price (11.5 cents/kilowatt-hour). (This type of agreement must exist because storage technology for solar energy has not reached market penetration yet.)
- The ACC recently finished their 3-year Value of Solar case, determining that moving forward, the price DG customers will receive for excess energy will not be wholesale.
What does all this mean for you? If you are considering installing a PV system on your roof, it is highly recommended to begin that process ASAP to take advantage of the current net metering system. The rate cases are estimated to be decided around August 1st, 2017. For details on what these cases will likely determine, continue below:
- Current customers (including those who file applications before case decisions) will have a 20-year lock (from start of contract) on net metering.
- Customers after case decisions will receive around 6 cents per kilowatt-hour (~50% wholesale price) for excess energy and will have that rate locked for 10 years.
- This means DG customers must PAY to buy back excess energy during non-producing times.
Even if you aren’t in a position where installing a PV system is possible, do not underestimate the significant impact the ACC has on you. This “Fourth Branch of Government” determines how much you pay in your utility bills and is trusted to regulate utility companies to ensure fair treatment of consumers, know who you are trusting with that responsibility.
Learn more about the AZ Corporation CommissionContact Your Utility Company
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