Commission Resolves Dispute Over Raising Rates for Solar Panels in Arizona
The Arizona Corporation Commission resolved the dispute over net metering policies between the solar energy industries and utility companies late Thursday evening. In what the Associated Press reports as “a major win” for the solar industry, the commission voted to adopt a $5 monthly fee for solar panel users, instead of the $50-$100 monthly rate sought by the largest utility in Arizona, Arizona Public Service Company (APS).
The debate began when APS requested to change the compensation rate for solar energy received from private residences in Arizona. Under current net metering policies, customers who own solar panels that generate surplus electricity may sell that excess power back to APS for fifteen cents per kilowatt hour. These policies were enacted in 2009, when there were relatively few solar residential customers in Arizona.
The Washington Post reports that as the number of solar panel customers has grown, the utility company has been forced to pay more; APS estimates that it is paying about $18 million per year to solar customers. Utility companies argue that the current compensation structure is unfair because it is required to pay for energy that it cannot always use, while the solar panel customers avoid paying grid maintenance. The solar energy industry asserts that higher rates promote competition between utility companies, and that the generation and use of energy by privately owned solar panel systems actually reduces the wear and tear on the electrical grid.
Although revising energy policies in Arizona would not have a large financial impact on APS, both the utility industry and solar industry asserted that the national ramifications could be immense. The solar energy industry was concerned that lowering the compensation rate could drastically disincentive the public and discourage the purchase, installation, and use of solar panel systems to generate clean energy, while on the other hand, the utility industry could have leveraged a victory in Arizona where net metering laws in other states across the country are currently under debate.
The Chanler Group is actively engaged in the review and analysis of incentive-based renewable energy programs to determine potential benefits to our clients. Global energy consumption continues to increase each year and, with this increase, the demand for safe, clean, and unlimited energy is on the rise. The Federal and State governments promote this interest through a variety of financially-beneficial incentives. Our understanding of these laws allows us to guide homeowners, businesses, and/or developers through the various ways to take advantage of these incentive-based benefits. With the appreciation that renewable energy laws and regulations are constantly changing, The Chanler Group is committed to investing in its understanding and practice of this area of law.