The Future of Rooftop Solar in Arizona Hangs in the Balance

The industry in Arizona faces uncertainty following a pivotal vote on October 11, 2023, at the Arizona Corporation Commission (ACC). The ACC, which regulates utilities in the state, saw a divided vote that could reshape the landscape for the future of solar energy in the region.

Vote to Re-evaluate Rooftop Solar Export Rates

The ACC's three most politically conservative commissioners, Jim O’Connor (R), Nick Myers (R), and Kevin Thompson (R), voted 3-2 in favor of opening a new legal case to re-evaluate rooftop solar export rates. These "Value of Solar" rates, initially set in 2017 after a multi-year evaluation process, have been a point of contention.

The 2017 decision marked a significant shift in the solar industry, as it eliminated net metering, a practice that allowed solar owners to sell excess energy back to the grid. Despite concerns within the solar community, it provided some level of predictability in the solar market.

A Divisive Decision

The recent vote has divided the ACC along ideological lines. Commissioner O'Connor justified the move by emphasizing that homeowners already benefit from federal and state tax credits for installing solar panels. He questioned the need for the commission to dictate the prices that utilities pay to solar-powered homeowners.

In contrast, Commissioners Lea Marquez Peterson (R) and Anna Tovar (D) voted to maintain the current rate structure. They expressed concerns about the potential impact of revisiting the issue, considering the interests of both solar customers and companies. Dozens of solar industry employees and environmental advocates attending the meeting voiced their opposition to reopening the case, fearing it could disrupt the thriving solar industry in Arizona.

Industry Concerns and Implications

The re-evaluation process has raised concerns among stakeholders. If the ACC decides to alter the existing solar export rates, it could have far-reaching consequences for the solar industry, including over 300 companies and 8,000 employees in the state.

Under the 2017 Value of Solar agreement, approximately 170,000 APS (Arizona Public Service) customers are locked into ten-year rate plans. APS currently purchases excess energy from solar homeowners at 7 cents per Kilowatt Hour and resells it to other customers at a higher rate.

Jake Bastian of Chandler-based Icon Power expressed the potential severity of the situation, stating that even reopening the discussion could have a significant impact and potentially halt the industry's progress.

Climate Crisis and Solar Energy

The backdrop to these decisions is the global climate crisis. Scientists worldwide, from NASA to the World Meteorological Organization, emphasize the urgent need to transition to a fossil-free economy. Fossil fuels like methane and CO2 are major contributors to global warming, and Arizona has experienced its ten hottest summers on record since 2011.

Advocates and environmentalists stress the moral imperative to address climate change promptly. However, some commissioners believe that the focus should remain on specific regulatory issues rather than the broader context of the climate crisis.

What Happens Next

The decision to re-evaluate solar export rates could lead to a period of uncertainty and potential disruptions in the solar industry. Commission staff will assess the ten-year locked-in rates for future solar customers, a process expected to take several months.

As the ACC moves forward with these discussions, the future of rooftop solar in Arizona remains uncertain, and stakeholders will closely monitor the developments and outcomes of this process.