Clean Power

Published on December 16th, 2011 | by Andrew


Lower Solar Power Prices, Growth & Savings Lead to Reduction in Arizonans’ 2012 Utility Bills

December 16th, 2011 by  

Photo courtesy First Solar

Arizona Public Service Co. (APS) customers will see there electric bills drop $0.21 a month as a result of falling solar panel prices and cost savings realized on the utility’s renewable energy program, the Arizona Republicreports.

APS charges customers a monthly tariff to provide incentives for them to make use of renewable energy and improve the energy efficiency of their homes and businesses. The state’s utility regulator, the Arizona Corporation Commission, voted late Wednesday to reduce the tariff from a maximum $4.05 to a maximum $3.84 per month.

APS’ 2012 budget is increasing, to $106 million from $96 million, even with the renewable energy/energy conservation tariff reduction. APS is rolling $19 million that was either saved or earned via its news solar power plants through state production tax credits into the 2012 budget, APS’ renewable energy director Eran Mahrer told Arizona Republic reporter Ryan Randazzo.

All Good News

“In a sense, it is all good news. We will meet our (renewable energy) targets and are on track to exceed them,” Mahrer was quoted as saying.

Arizona’s Corporation Commission requires utilities to obtain 15% of their energy from renewable sources by 2025. The Corporation Commission approves an annual tariff that’s applied to all customers to help offset the up-front capital costs of developing renewable energy production projects.

Corporation Commissioner Bob Stump noted that polls show that Arizonans want more solar energy and are willing to pay more for it. As a result of falling solar panel prices and APS’ savings, they’ll be able to get more solar and renewable energy and pay less for it, at least in 2012.

The negotiations over the state’s tariff also showed just how fast the public, and commercial power producers and distributors, are embracing solar and renewable energy given the right type and mix of incentives. It also shows that the state’s solar and renewable energy targets are, if anything, too low.

2025 Solar, Renewable Energy Targets Too Modest

APS has so many rooftop solar projects installed that it could have met the state requirements for those sources without any new investments in 2012, which was included as part of one of three budget options it presented to commissioners. Some solar companies objected, and the commission came up with a compromise.

APS pays an annual rebate for commercial rooftop solar power systems based on the amount of power they generate. The rate at which APS pays rebates for homeowners who install solar power systems has come down drastically.

APS was paying homeowner rebates worth more than $3 per watt of solar power capacity a few years ago, Randazzo notes. 2012 homeowner rebates will start at $0.75 and decrease in steps as homeowners install more systems.

Utility vs. Homeowner Owned Solar

In addition, the commission authorized APS to enter contracts for large, commercial rooftop solar power systems worth $100 million or more over their lifetime. That’s going to carry over through 2012.

Mahrer said he expects maintaining the same budget for large, commercial rebates in 2012 may yield as much as 50% more solar power generating capacity because of the drop in solar panel prices and because the subsidies cost less per project. The same holds true for residential solar power, he said.

Some smaller solar power companies objected to the rebate rate reduction, arguing that it will hurt them, and individual home and business uptake of solar energy across Arizona. Keith Rowley, president/CEO of Solar Electric Systems and Products in Mesa, said his 10-employee company will have difficulty adding new customers with the rebate rate reduction.

Utility companies, he was quoted as saying, “want to own all the solar.” “On large power plants (built by out-of-state companies) all the money and tax credits go out of state.”

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About the Author

I've been reporting and writing on a wide range of topics at the nexus of economics, technology, ecology/environment and society for some five years now. Whether in Asia-Pacific, Europe, the Americas, Africa or the Middle East, issues related to these broad topical areas pose tremendous opportunities, as well as challenges, and define the quality of our lives, as well as our relationship to the natural environment.

  • Solar is cheaper than the grid in Hawaii, Arizona, New Mexico, southern California and parts of Texas. In places with high DNI (Direct Normal Irradiance) CPV will become much more prevalent. The best CPV solar cells have gone from 32% in 2000 to 43.5% today. Other advancements on the horizon should get system efficiency past 40% within two year. Some of these may include the Rainbow Concentrator by Sol Solution and low profile concentrator by Morgan Solar As the efficiency goes up and the price goes down, the geographic range where solar is less than the grid will increase.

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