Clean Power

Published on December 17th, 2014 | by Jake Richardson


Arizona Solar: So Much Potential… Under Threat

December 17th, 2014 by  

Originally published on Solar Love.

What’s the first thing you think of when you hear someone say Arizona?

Heat? Sunlight?

phoenix arizona solar

Well, apparently some of Arizona’s leaders don’t want solar power, even though there is plenty of sunlight year round.

If you live in the Phoenix area and want to take advantage of all the sunlight with solar power, the local utility might be against you. Reportedly, the Salt River Project has a proposed a new rate plan that increases consumer costs by $600 per year, if you have your own solar power system.

Part of the plan is to decrease the amount the utility pays when home solar systems are feeding excess electricity back to the grid. Home owners get credits when this happens that reduce their bills. If the rate is decreased, homeowners won’t get as much back and so will pay more on their utility bills.

They also want to charge a flat fee to access the grid, but all homeowners are already connected to the grid, so home solar power owners don’t deserve to pay extra. There is no point in punishing them for investing in clean, renewable electricity. Actually, they should be supported and commended.

One issue with utilities is that they have had dominance over consumers in the past and have made a lot of money due to it. Now, when solar power comes along and homeowners start acquiring the capacity to generate their own electricity, the utilities can’t be expected to like it, but some of them seem to want to preserve the status quo by hurting their customers.

Discouraging homeowners and business owners from investing in solar power — especially since the costs have dropped so dramatically —is essentially blocking progress itself. Such measures also reduce individual freedoms.

Arizona is typically a Republican state and Republicans often rail against any reduction in personal freedoms and interfering with the free market. That is exactly what some utility companies are doing when they punish home and business owners that want to generate their own electricity with solar power. At one point in the past, Arizona seemed more open to solar power and investment, but that receptivity seems to have waned.

Florida is another Republican state that is resisting solar power even though it has plenty of free sunshine. What is going on?

Image Credit: George Miquilena, Wiki Commons

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About the Author

Hello, I have been writing online for some time, and enjoy the outdoors. If you like, you can follow me on Google Plus.

  • RobMF

    How about homeowners just vote to have utilities RE-rendered public and take that nasty profit motive out of the equation. In other words, the only reason these states are suppressing solar power is profit motive gone rogue yet again.

  • shecky vegas

    What’s going on? Money. That’s what’s going on.

  • NRG4All

    Having lived in AZ for the last 43 years, I have to say that the climate is wonderful, but other than that AZ is a fairly backward state. Remember the national news when AZ refused to adopt an MLK day and conventions went else where? Remember too that the AZ car dealers lined up their political cronies and stopped Tesla from selling cars in the state and then has the gall to solicit Tesla to build the “gigafactory” in the state? The list goes on.

  • spec9

    The hard truth is that solar PV is going to hurt utilities. That is just the way it is. That is capitalism & technology advancement. But we can’t let the utilities stop or slow down solar PV with laws. That would be like newspapers trying to regulate the internet.

    I think the end-game may be the that many utilities become partially government-owned entities that operate the grid because it might not be a real profitable business eventually. The utility death spiral is a real thing.

    • Bob_Wallace

      PV will be (is being) disruptive for utilities. They are giving up some market to solar (and efficiency). But they are going to gain market with EVs. They may well end up with a larger market share than they had a few years back.

      Will there be a huge exodus from the grid? I don’t see that happening. I don’t think end-user solar + storage + backup generator/fuel cell/whatever can compete with utility solar + wind + hydro + storage + CCNG or biogas/mass deep backup.

      Let’s say we get rooftop solar down to $1.50/watt. In the middle of the country at 18% CF and 5% financing that’s 8 cent per kWh electricity. The average electricity price is about 12 cents. That gives only 4 cents to cover storage and backup.

      Sure, there may well be some high use consumers who can make the math work because they get hit with high TOU rates, but those people will be the exception.

    • Mint

      “The utility death spiral is a real thing.”

      Only in select areas, along with Australia. Everywhere else, grid costs are too low for DG to compete with. Right now it’s only happening due to net metering without grid fees, which will not continue beyond maybe 5% (or even less).

      Bob is bang on above. Many things that make rooftop PV cheaper will also make utility PV cheaper. Grid storage will always be more efficiently utilized than isolated home storage. Home backup generators will always use more expensive fuel than grid backup.

      Off grid will be a novelty for most of the world for a long time.

  • Deep Time

    For many of today’s conservatives, big business (and their deep pockets) > Assaults on personal freedoms and free markets. Follow the $$$

  • paul schramm

    The oil industry has tried to destroy its competition dating back to when we used kerosene in lamps and electricity was invented. This shouldn’t surprise anyone.
    Plus they have republicans in their pockets, so expect this to be a drawn out war until our politicians have the backbone to fight for the people instead of oil and coal companies.

  • Marion Meads

    This linked article is misleading aimed to make you believe that there is a real rate hike of $600 per year when in fact there is none. Actually it is just a reduction of the price of excess solar that you put back into the grid, from $0.10/kWh down to $0.04/kWh. Then they presented this proposed excess buy back plan in terms of an equivalent RATE HIKE to DRAMATIZE the effects.

    Well the way out of this is to really store your excess solar power in battery storage and never put it back to the grid. I don’t care how they skew the presentation, you wouldn’t care less when you have storage capacity.

    • Will E

      buy EV or heatpump heating.
      use your electricity.

    • Matt

      Have you every listen to congress, whenever old industry tax break or subsidy is removed it is called a tax hike (if you like that industry). That help raise emotion. Of course if you have solar and produce/use the same amount of power in 2014 and 2015 and your 2014 bill is $X while your 2015 bill is $600+X then it looks like a hike. But turn it isn’t really a hike they are just moving away from net metering.

    • Mint

      No it isn’t. You claim to have read the proposal, but it really looks like you haven’t.

      SRP did several things:

      1) Raise the flat service charge by $12/mo ($25/mo if you have >200 amp service, which is unlikely). That’s not so bad.

      2) Add a demand charge of $3-29/kW per month, depending on time of year and level of peak demand. This is a hefty charge amounting to $50-$150/mo for most homes.

      3) Reduce energy charges/payments (depending on whether you have net usage or consumption) to 4-6c/kWh.

  • Larmion

    Homeowners interact in a unidirectional way with the grid, whereas solar owners acts a producers of electricity. I’m not familiar with Arizona, but in most parts of the worlds electricity generators pay for their use of the grid. Why should the owner of a solar farm pay for his grid access and not the owner of rooftop PV, essentially a small solar farm?

    The cut in credits (in effect a cut to net metering) is a shame. But the idea that PV owners should pay a fee for their use of the grid is neither unreasonable nor damaging to PV’s long term prospects.

    Ideally, a private grid operator separate from the utility should charge a flat fee per kWh fed into its grid, regardless of who does the feeding. That’s the fairest and most efficient solution.

    • Matt

      True but that is not what this is. Agreed generator should not be allowed to 0% and have no cross connection with the grid. Also no one how has worked in a company with more that 5% ownership of generation or grid assets or makes more that 1% of net income or profits from either grid or generation should be allowed on any Public Utility Commission. Ok a 50 year wait is required. The fee a generation pays to the grid should be based on distance from load.

      • Larmion

        Should that really be the criterion?

        For starters, it’s nearly impossible to measure exactly. How can you measure what proportion of electrons from a power plant flows to city X, to factory Y or to city Z? You could get a reasonable estimate using statistical methods, but not nearly accurate enough to calculate charge.

        But as importantly, for a grid operator transmission certainly isn’t the only factor that determines how costly a source of generation is. How predictable generation is also matters, as do countless other factors.

        There is no objective method to calculate a fair charge for a generator. It depends on too many variables, some inherent to the technology used, some to location and some that are purely economical in nature.

        As such, a flat fee would be the fairest and simplest system.

        • Matt

          A generator that is 200 miles away need more line to get power to the users. A grid isn’t one massive wire but really many smaller interconnected subnets. You can tell when power flows in or out of a subnet. The reason in Oz they are talking of talking towns of the grid is to drop the long lines, not the local lines. There have been many studies that show DG help reduce network costs, so is therefore more valuable to the grid than central stations that are located far away. Fairness would take this into consideration.

          • Larmion

            200 miles away from what? Distance to the closest main power line? That’s not the same as distance to end user – the end user can be the village closest to the generator, but at another time of the day it could be a factory hundreds of miles away.

            But in fairness, most studies indeed suggest that DG stress the grid a bit less than centralized generation. However, they do stress the grid. As such, you could reasonably seek a slightly lower contribution for DG, but not a zero contribution as is currently the case.

            Oh, and how shall we define DG? Would a community owned array of large wind turbines outside a city count as DG or CG? It has characteristics of both.

          • jeffhre

            No DG relieves stress previously created by transmission since DG is contiguous with the load. A recent study from Nevada shows that and more.

    • Offgridman

      Why should the owner of a solar farm pay for his grid access and not the owner of rooftop PV, essentially a small solar farm?
      It is quite obvious that you have never dealt with a utility company in the US because there are already many of these minimum fees just for the privilege of buying electricity from them that these homeowners wanting to install solar already pay..
      To start with minimum monthly bills that can run from 18-52$ even if you use no electricity. Then you can run into billing fees, fuel usage fees, meter reading fees (if you don’t want to believe their estimate of what you are supposed to have used). Then there are the ones that won’t turn power on without an advance deposit of first and last months usage that the utility gets to estimate.
      Come and live here and deal with the conditions that these monopolies impose upon their ‘customers’ before you support them
      And now I know that you are going to say that they shouldn’t be monopolies, they need to be split into generation, transport, and service. But it isn’t happening here because these same monopolies also have the money to pay off the politicians and public utility commissions to maintain their monopolies.
      Until homes with solar also have guaranteed FIT’s there is no reason for these additional generator fees. It is just the utilities attempt to keep solar production at 1% and maintain their centrally generated model.

      • Larmion

        Yes, you pay for being connected – as you do everywhere in the world. As a consumer, you put a strain on the grid (the grid has to extend to your home, for starters). However, when you start producing power, you add a further (limited) strain on the grid.

        A FiT is a seperate issue from grid fees. FiT’s reward certain, government-favored sources of electricity. Grid fees are merely a payment for the grid stress you cause. Besides, Arizona already has net-metering according to the article. In a sunny clime, that should be enough.

        • Offgridman

          “the grid has to extend to your home for starters”
          Another cost that is not paid by the utilities or government here in the US unless you were fortunate enough to have been connected back in the 1930’s as part of the rural expansion program.
          If you want the privilege of paying a utility in the US for power individual homeowners have to pay tens or hundreds of thousands of dollars for that privilege of a grid connection. Or in developments the contractors take care of it and roll the costs into the price of the new home.
          There have been a couple of independent studies showing that Arizona power actually saves money on purchasing electricity and reduced grid needs thanks to the small amount of rooftop solar installed now. These fees are just an attempt to slow that installation and preserve their current profit model because the new fees are on top of what homeowners have already paid for grid connection and service.
          Once solar has reached fifty percent or even five percent infiltration you might make a case for these types of fees. But as it is now the utilities in the US have all of the political control and are locked into guaranteed high profit margin models. They are fighting solar because it threatens that model and your support of them in this case makes no sense because you should be aware of the need to get more renewables active to help control the climate issues.
          Due to your more fortunate situation of having utilities that are better regulated and have a split of generation and service you have absolutely no idea what it is like dealing with the ones in the US that control everything including their customers.

    • JamesWimberley

      Yes. The split between transmission and generation pioneered by (God help us) Mrs Thatcher is the key to a reasonable solution to this problem. Neither National Grid in Britain, nor German distribution companies, nor ERCOT in Texas have the incentive or means to protect incumbent generators from competition. They are concerned with integration – issues of security and stability of supply – and will support tariff structures that ensure the grid as a whole meets these goals. No generator should be allowed to own transmission.

    • spec9

      I pay $5/month here in California as a PV owner to access the grid. And I’m fine with that. But Arizona solar wanted people to pay $50 to $100/month. That would have been more than my electric bill thereby effectively rendering residential solar PV completely useless.

      • Larmion

        According to the comments on the last article about this, the payment was per year, not per month. In that case, the fee is similar to yours.

        • Offgridman

          No last year they initially tried to make the fee much higher, it was only through a lot of protest like you see here and are contesting that it was made more reasonable.

        • Mint

          That was one person’s comments, and she was wrong.

          Read it for yourself

          (check Exhibit 18 at the end of the document)

    • madflower

      Technically any connection to the grid can be used as a two way connection. Electrons flow either way. The old analogue meters were the best, you can watch them spin backwards. 🙂

      Barring that AZ needs lots of A/C, so something like ice energies, essentially freezer system that assists their cooling bill.

    • Steven F

      “Why should the owner of a solar farm pay for his grid access and not the owner of rooftop PV”

      The owner of a solar farm in the end expects to make a profit from the electricity they put on the grid.

      “PV owners should pay a fee for their use of the grid”

      Most PV owners do pay a fee to be connected to the grid. It is no different in Arizona.

      What SRP is trying to adjust its rate structure so that They make about the same amount of profit with or without solar on the home. In other words a home with solar will pay about the same amount as a home without solar. That is fundamentally not far. furthermore the utility then sells your solar power to a home without solar and makes a profit on the sale. So that in the end the utility makes a profit while all home owners still pay. They essentially get free solar power while every one else pays.

      • Larmion

        The average PV owner has the same idea as a big solar farm’s owner. If not, why are most arrays installed in jurisdictions with net metering or FiT larger than the size that allows maximum self-consumption?

        The utility pays you for your power, more than it does on the open market. So no, buying your electricity isn’t ‘free’ for them.

    • JHM1

      I am an Arizona resident with a rooftop solar system. Each year our system produces more electricity than we use. Fortunately, we are not in the SRP service area. That said, net metering does not pay us the true wholesale price for electricity. In addition, we are already charged a connection fee. That should cover any cost there is for grid connection.
      It is my opinion that we should nationalize the grid, just as we have nationalized the highway system. We supposedly impose limits on what utilities can charge for their services. But in reality the government agencies that set the rules and limits are comprised of elected officials. These elected officials often receive campaign contributions from the utilities they are suppose to regulate, as long as they favor the utilities position.
      If the current anti-solar rules and regulations continue, and as battery technology improves, I believe the long range impact will be that people that can, will simply disconnect from the grid. That will only leave those that cannot afford to go solar to pay for maintaining the grid.

      • Larmion

        Net metering does not pay you the full retail price, but considerably more than the wholesale price of electricity form other sources – including solar farms.

        • JHM1

          I don’t expect net metering to pay the retail price. But what I said is that it doesn’t pay the wholesale price for electricity. In our case it pays the wholesale price for the amount of natural gas necessary to generate the electricity.

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