Arizona Public Service (APS) decided this week that they would like to get into the rooftop solar business. I think they should too, but not like this. Their proposal is terrible for customers.
After spending over $10 million in an attempt to impose a $50-100 monthly fee on solar customers, APS has decided to pay you $30 per month for 20 years if you allow them to install solar on your rooftop.
It is hard to be against anything that results in more solar powering our grid unless of course it has negative effects that could jeopardize the overall success of the solar industry. This could do just that.
Thirty dollars per month twenty years from now is not going to be worth much considering the price of power increases by at least 3 percent per year. This is a bad deal for the customer and a great deal for APS. They will have stopped that customer from leasing or purchasing a solar system for 20 years. So not only has APS held on to that customer, they are also making money on the solar produced by that system which will be worth a whole lot more than $30 per month. APS also has a huge tax appetite and will make good use of the tax credits, so they win big time.
But who is paying for the solar installation? One of APS’ big concerns was the cost shift created by net metering. But now they are proposing to install solar on a customer’s rooftop and give them $30 for it. Who is paying for the solar system? Who is paying the $30 that APS will give that customer for the next twenty years? If you can make an argument that customer-owned solar creates a cost shift, then the same rules apply here. The pilot program would include 3,000 residential customers and APS says it would cost $57-70 million paid for through all customers’ rates. That $30 per month over 20 years for 3,000 customers adds up to $21.6 million. Is that included in the $57-70 million or is the real number $78.6-91.6 million?
Furthermore, APS has said that they will select “strategic” locations which means not everyone will have an equal opportunity to install solar, another of their previous complaints against the solar industry.
APS also participated in a scheme to impose property taxes on leased solar systems that would effectively wipe out the annual savings from solar. These solar systems installed by APS would have to follow the same rules which means customers receiving $30 per month from APS will still have to pay hundreds of dollars annually in property taxes on a solar system that adds absolutely no resale value to the home.
I am also concerned that APS wants to expedite this as quickly as possible to meet the 2015 energy requirements. This contradicts their numerous statements that APS is already in compliance through 2016 with our renewable energy standard. Something is going on here. One or the other has to be a lie. I suspect this may be an attempt to get as much installed as possible before the tax credit expires.
When I got into this industry it was to empower customers through a democratized energy system, to reduce the monopoly stranglehold on us all. However, in this scenario the installation company works for the monopoly and not for the customer. The customer gets $7200 over twenty years which is a tiny fraction of what they would get if they owned their system. Any installer that participates in this program as it is written now has lost sight of the true end goal and is simply in business to sell solar rather than strive for what is best for their customers. If we structure the system so that everyone wins together, then we will have created a sustainable solar industry that will power the world.
Dillon Holmes is president of Clean Power Arizona, a non-profit dedicated to a clean, sustainable energy future which empowers citizens to take ownership of their power. He is also president of Cambio Energy, a Phoenix-based designer and installer of solar PV systems. Follow @cambioenergy or @cleanpoweraz on Twitter.
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