KJZZ is a service of Rio Salado College,
and Maricopa Community Colleges

Copyright © 2024 KJZZ/Rio Salado College/MCCCD
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Arizona solar customers could face significant cuts to savings

Arizonans with rooftop solar panels could face significant cuts to their savings. In its meeting Wednesday, the Arizona Corporation Commission will consider changes to the way solar customers get compensated for excess generation.

When homeowners with solar panels produce more energy than they use, the excess goes back to the grid. Arizona utilities compensate customers a few cents per kilowatt hour for that power.

Those compensation rates were set by the Arizona Corporation Commission in 2017, following years of hearings. The rates are based on how much it might cost providers to produce that energy if they were to generate it through a utility-scale solar project. The utilities are allowed to lower the rates by up to 10% per year. The Corporation Commission is an elected body that regulates most of the state’s utilities, including APS but not SRP.

Amendment argued customers subsidize solar

Now, Commissioner Nick Myers says, even with 10% reductions, the rates are higher than utilities' actual costs. In a Corporation Commission  amendmentfiled in August, Myers argued the rate solar customers are paid is artificially high, so other energy customers are essentially having to subsidize solar users.

Myers withdrew his proposed amendment, but the Corporation Commission will decide Wednesday whether to reopen the debate around solar rates.

Solar advocates say reducing compensation rates could shortchange the more than 200,000 Arizona homeowners who have already invested in solar believing they would see a certain amount of savings. And reopening the issue for more hearings could scare off potential new solar users, solar proponents say.

'Cannot be counted on to maintain the decisions'

"You might be looking at massive reduction in installation while people wait for the commission to figure out what in the world is going to happen," said Autumn T. Johnson, executive director of the Arizona Solar Energy Industries Association, during a webinar with solar supporters last week.

“It’s hard to argue that you should invest $30,000 or $40,000 or $50,000 into a solar system on your home when you have absolutely no idea how the commission is going to treat that from a regulatory perspective tomorrow or next year because they cannot be counted on to maintain the decisions they’ve previously instituted.”

The state’s largest utility, APS, told KJZZ News it supports the 2017 rate decision and does not want the issue to be reopened.

More stories from KJZZ

Katherine Davis-Young is a senior field correspondent reporting on a variety of issues, including public health and climate change.