Solar Industry Wins In Arizona (Sort of): Net Metering Preserved

The solar industry has been fighting in the trenches for the past few months as the utility, Arizona Power (APS), used under-handed ways to eliminate net-metering.

Despite an unprecedented multi-million-dollar campaign, Arizona regulators rejected the utility’s drive (almost) to eliminate net-metering for solar systems in the state.

About 1,000 people showed up to protest before last week’s vote. While state regulators did decide to impose a monthly fee for people that have solar systems, it is much  smaller than APS requested.

Regulators voted for a fixed fee of $0.70 per kilowatt (kW) starting next year, which amounts to $4.90 for a typical residential installation. Existing solar systems will be godfathered in and not be charged. 

APS wants an $8 per kW monthly charge, which translates into $50-$100 per month – a strong disincentive for adding solar.

Closely watched by utilities across the country, it would have set a terrible precedent had Arizona Power won.

In Georgia, utility Georgia Power has already gotten the message. Although it says it will be back, for now it’s withdrawing a proposal to charged people with solar systems $30 a month. 

"Any tax on solar hinders market growth, but at this level at least the industry can continue to grow," says The Alliance for Solar Choice (TASC), which vows to continue opposes similar moves in other states.   

Not everyone agrees. Although SolarCity immediately cut prices to compensate, smaller solar installers don’t have that luxury.

Amazingly, one solar company is already shutting down and filing for bankruptcy. Lane Garrett, co-owner of Dependable Solar, which employed 30 people, told Arizona Republic, "Small businesses can no longer compete. That is the bottom line." 

As small as a monthly $5 fee is, it can wipe out the savings of a solar system or extend the payback period.

Background on the Case

Arizona’s net-metering law, in place since 2009, allows homeowners and businesses that have solar systems to sell excess electricity back to the grid.

Over the past few years, strong growth of small solar systems has resulted in utilities running scared. As we’ve reported numerous times, their traditional business model of making money by selling more energy is threatened by the increasing number of independent power generators. 

Utilities argue that customers with rooftop solar aren’t paying their fair share to maintain the grid – they are being "subsidized by customers who don’t have solar." As more people rely less on grid-based solar, they say, that puts the burden of paying for utilities’ services on fewer and fewer people. This isn’t true – people that run on solar still pay the same monthly service charges.

Money Rolls In

To win its campaign, Arizona Power went so far as to channel millions of dollars through shady, conservative front groups that ran ads discrediting the solar industry. 

One of the groups – 60 Plus – is among the too-many-to-count Koch Brother funded-groups. And APS quietly joined ALEC.

Uncovered by the newspaper, Arizona Republic, the utility lied about it to ratepayers, reporters, and state regulators. The revelation came after Bob Burns, Commissioner of Arizona Corporation Commission ordered the utility to disclose all funds spent to kill energy competition in Arizona, says TUSK (Tell Utilities Solar Won’t be Killed).

"The monopoly utility, when not wasting ratepayer funds concocting new propaganda materials, continues its scheme to reduce the rate it pays for solar so it can sell it at a higher profit. Net metering requires utilities to fairly compensate rooftop solar customers who send electricity back to the grid. APS is seeking to end this successful policy. In the meantime, APS ignores its own subsidies as subsidies for solar in the state of Arizona have largely come to an end.

Since 1985, APS has received federal and state subsidies for nuclear and fossils in the range of $900 million to $1 billion, reports TUSK.

"First they say they have nothing to do with ads attacking Arizona rooftop solar customers. That turned out to be a lie. Now it turns out that they are spending millions to launch these attacks. It makes you wonder where their priorities are. If they had put this amount of time and energy into actually being innovative and planning for solar expansion, they would not have found themselves in this position," says Barry Goldwater Jr., the son of the famous Republican, who chairs TUSK.

Here’s one of the Ads:

Arizona Power spent $3.7 million on the effort and trade association Edison Electric spent another $520,000 on a 10-day ad campaign on television. The solar industry spent near $500,000 to fight the proposed changes. 

43 states and the District of Columbia have net metering laws – a key driver for industry growth along with state Renewable Portfolio Standards. 

Dovetails With Fossil Fuel Interests

The Energy & Policy Institute puts in this way: "Arizona Power appears to be leading the first assault of a national campaign by the utility industry trade association, Edison Electric Institute, and fossil fuel interests like APS, to weaken net metering policies."

After failing to eliminate Renewable Portfolio Standards this year through model legislation pushed in 16 states (they are currently working on Ohio), they are turning to net-metering.

"In the latest attempt to rollback pro-clean energy policies, fossil fuel and utility interests operating through ALEC are proposing new model legislation to slow the rise of the clean energy industry by weakening net metering policies," says Energy & Policy Institute.

At December’s "States and Nation Policy Summit", ALEC members will vote on new model legislation, "Updating Net Metering Policies Resolution." If it passes, it will be sent to ALEC’s 2,000 members who are state legislators for them to introduce in their states.

Arizona Power’s proposed changes to Arizona’s net metering law closely resembles the language in ALEC’s new model legislation … what a surprise!

ALEC’s model legislation would change net metering laws so that utilities "pay rates below market value and charge customers who feed electricity back to the grid a monthly fee for maintenance costs."

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