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Published on January 19th, 2015 | by James Ayre


Arizona Utility SRP Proposes Rate Changes For Solar Lease Customers — Potentially Trapping Customers With Uneconomical Leases

January 19th, 2015 by  

The Arizona-based utility SRP recently proposed new rate changes/fees that will potentially see 12,000+ customers who use solar power systems stuck in leases that are no longer necessarily economical.

While the addition of $50 in new monthly fees for new customers who use a solar lease certainly isn’t something to cheer for, the real issue here is that existing customers (most whom are already locked into decades-long leases) aren’t exempt from the fees for their full lease terms.

What’s been proposed by SRP is that existing customers can keep their current rate structure for another 10 years — but after that they’ll be subject to the new $50-a-month fees. What this means is that those locked in for 20-year leases could see the total costs of their systems rise substantially, undoing any potential savings that the lease might have provided.

Even worse than this, though, is that SRP is also proposing that if current customers sell their houses, then the new owner will be immediately subject to the new higher fees.

AZ Central provides some more info:

For example, a customer who installed solar last month would start to see the new fees in 2024 and would pay about $6,000 in such fees before the end of the lease in 2034. Customers who have bought solar panels might not expect to break even for eight or more years, and the new fees could wipe out any savings they anticipated after paying off the system…

…next year, a homebuyer who wants a house that has solar with a $70 monthly lease payment will pay that lease plus $50 in new solar fees. That could result in a higher bill than the house would have without solar. Arizona is a transient state and people move often. It’s a safe bet many of SRP’s solar customers will move in the next decade and the SRP rules, as proposed, will complicate that.

As far as these criticisms of the proposal go, an SRP spokesman by the name of Scott Harelson responded to them thusly: “Because we are a community-based nonprofit utility, we have an obligation to make decisions based on the best interests of all our customers. SRP management believes that 10 years is a considerable amount of time to keep our existing rooftop solar customers on their current price plans.”

He also noted that, as these solar contracts are via a third party, not made directly with SRP, they hold no guarantees as far as prices go.

Ouch. What an all-around pleasant situation.

SRP’s board of directors is going to be voting on the proposal on February 26.

Related Stories:

Arizona Not Accepting Solar Well

Monthly Rooftop Solar Fee Rejected In Utah

SolarCity and SunRun vs Arizona Department Of Revenue

Edison Electric Institute Members Lobbying For Solar Taxes

Image Credit: SRP

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About the Author

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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