Clean Power

Published on April 15th, 2014 | by Guest Contributor


APS Taxes, Arizona Solar Installations Drop

April 15th, 2014 by  


Arizona is learning a lesson the hard way: When you tax something, the market drops.

Exhibit A: Arizona Public Service, a state monopoly, ended up with 426 rooftop solar net metering applications in March compared to 889 in March 2013—that’s a significant 52% drop.

Exhibit B: There were only 1,077 applications for net metering in the first quarter of 2014 compared to 1,800 last year during the same time period—a 40% reduction. All this while the rest of the country’s solar markets are expanding.

Channel 12 News also covered the negative impact the solar tax is having on Arizona’s economy. Channel 12 reported, “Applications plunged almost 60% in the first three months of this year.” Here is a link to the story.

Solar applications are stable or up in Tucson Electric Power and Salt River Project service areas, which do not impose a fee on solar customers. This is further evidence of the impact the charge is having on the solar industry in APS territory.

APS, which last year admitted it saw a $3.7 million increase in operations expenses in part because officials feverishly spent large sums of money from ratepayers to attack its own solar ratepayers, is not serving the interests of the public with its schemes to kill solar in Arizona. APS wants to reduce the rate it pays for solar so it can sell it at a higher profit.

To learn more about T.U.S.K. visit

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly. Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the solar industry is. Solar companies have a track record of aggressive cost reduction. The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence means smaller profits for the utilities, so they are doing everything they can to stop the spread of independent solar.

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  • Tom G.

    Well lets see if taxes “are no more than a very small chunk of customer bills”. Here is my bill for this month.

    Actual cost of electricity service was = $75.31

    Other fees and taxes were: customer charges, delivery charges base power supply charges, renewable energy standard tariffs, State, County taxes, and City Franchise fees, RUCO and ACC assessments.

    These fees amounted to = $36.20

    According to my calculator these OTHER taxes and fees amount to about 36% WITHOUT the additional fees authorized by the Arizona Corporation Commission for a solar customer that they must now pay. So my question becomes this? At what percentage of Other Charges does solar no longer make financial sense. Are we already at the point that adding solar just to reduce the $75.31 cost for actual electricity use even worth it?

    And maintaining the grid – yes we are ALL paying for that grid. In my case the utility providing my electric service is being paid $15.28 this month which is based on the number of kWh’s I use. However since I live in Arizona in the desert this fee really jumps in the summer. Based on summer and annual usage of about 12,000 kwh’s; my utility is being paid VERY WELL for their poles, wire and transformers which is actually about $380.76 per year. And that is every month and every year on into infinity. The fee never goes away. So lets assume power poles and transformers last 30-50 years. In 40 years my utility will have been paid $15,230.40 just in DISTRIBUTION FEES which of course assumes no rate increase over the next 40 years and we all know that is unrealistic. Care to argue about me and my other three neighbors that share 3 power poles and one transformer? That same $15,230 applies to my other neighbors as well so in reality my utility is being paid $60,920. +/-.

    The public utility I worked for in California for 20+ years restructured their entire business strategy back in the late 1990’s, downsized 5,000 employees, restructured their business units and created 3 or 4 new business units. That CEO could see what was coming and had a vision and established a business model for success. That utility today is a leader in solar PV and other low carbon energy sources. Far different than the coal burning predatory mentality of Arizona Public Services.

    • jimbeau11

      Well, I have no idea whether you really live in Arizona, nor can I look at your electric bill, but if you worked for a utility, you should know that the delivery charges, base power charges, etc., are the costs of providing electric service to your house.

      As I have said a couple times already, I agree that it is long past time to shake up the way utilities are regulated. If you would like to have a conversation around that, I’d be happy to. But I’m not going to argue with you about what is essentially your opinion that you pay too much for power, since 1) I agree that the status quo is getting more expensive and 2) I have no hard data to suggest whether or not you pay too much for distribution.

  • jimbeau11

    I would hazard a guess that if groups like TUSK weren’t constantly saying that this “tax” would kill solar, fewer people would actually buy solar because they would think it was killed. In the real world, filled with real numbers, however, a $5/month fee does not destroy solar’s immense value proposition, since old APS customer with solar were saving over $100/month before the “tax” was imposed, and the new ones paying the “tax” still will.

    I think the solar companies are undercutting their own marketing with that sort of talk. Would you rather sell a system with less profit, or not sell a system at all? This has been another episode of Simple Answers to Simple Questions.

    • spec9

      $5/month is fine. The utilities wanted a $50 to $100/month fee.

      • adrian

        They got $5 now but in a year aps can ask for more. This tax was just a foot in the door for aps to start a tax.

    • Tom G.

      There might be a belief by some people in Arizona that the Corporation Commission will keep increasing the fee each rate case review cycle and eventually hit the $50-$100 APS wants. This will have a significant negative effect on the solar industry since this solar fee combined with all of the other fees like demand response, transmission and service fees, Federal, State and City fees and taxes now make up about 40% of a typical customers bill. For many customers adding another $50 in fees means installing a solar system may no longer make financial sense.

      • shecky vegas

        Tom – Exactly. It’s these little “baby steps” that the Koch Brothers, through their clandestine companies, are trying to eradicate solar and wind, especially at the residential level
        A little tax this year, a little more tax next year, etc…

  • anderlan

    If they had any morals at all they’d tax God damned fossil fuel first.

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