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APS says solar, energy efficiency to make up 50% of new production

by Frank Andorka (April 13, 2017) www.pv-magazine-usa.com

Arizona’s largest investor-owned utility says the next 15 years will include significant increases in solar production, battery storage products and significant reductions in coal-fired production plants.

APS' 2017 Integrated Resources Plan predicts its customers should expect to see more utility-scale solar development by the company, like this facility outside Tucson, Arizona.

With the net-metering battle in its rearview mirror, Arizona Public Service (APS) is forging a new electricity-generation future – and says solar will play a crucial role for at least the next 15 years.

APS filed its Integrated Resource Plan (IRP) with the state’s Corporation Commission (which regulates utilities) late yesterday, and it contained good news for consumers who want to be powered by solar, including a prediction of a significant increase in private rooftop solar capacity. The plan is the result of a three-year-long, back-and-forth discussions with customers.

The plan says Arizona’s customers can expect more solar power and energy efficiency programs over the next 15 years, generating nearly 50% of the utility’s new energy growth. It says it will also expand its battery-storage programs beyond its existing 500 MW of pilot programs to support solar power and its smooth integration into the grid.

Among APS’ other commitments are to develop a more robust and advanced grid infrastructure to allow an increase of distributed energy resources, batteries and microgrids, as well as figuring out the best ways how solar, energy storage and other technologies interact. Lastly, APS pledged to reduce its use of coal will drop from 21 percent to 11 percent under the plan.

APS serves about 2.7 million people in 11 of Arizona’s 15 counties. Renewable energy currently makes up around 12% of the utility’s non-carbon based electricity production.

Arizona currently supports 7,310 solar jobs, more than half of which are in installation, according to The Solar Foundation’s National Solar Jobs Census. It ranks No. 1 in access to solar resources and has a current renewable portfolio standard (RPS) of reaching 15% of its utility production from renewable energy by 2025.

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How much are rooftop solar panels worth? Arizona utility regulators to decide

by David Wichner – Arizona Daily Star (Dec, 10, 2016) www.tuscon.com

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After years of debate, Arizona utility regulators finally appear ready to decide a long-burning question: What is solar energy generated on customers’ rooftops really worth?

The Arizona Corporation Commission is expected to decide the issue on Dec. 19, when it will consider proposals to change rates for rooftop solar customers including controversial cuts to credits solar customers get for the excess power they generate.

And that could have a major impact on the cost and adoption of rooftop solar in territories of state-regulated utilities including Tucson Electric Power Co. and the biggest state-regulated utility, Arizona Public Service Co.

Under the process, known as net metering, solar customers are credited monthly at the full retail rate for excess power — for TEP about 11.5 cents per kilowatt-hour. Any credits left at the end of the billing year are credited at each utility’s comparable cost for wholesale power, for TEP about 2.5 cents per kwh.

While solar companies and advocates want to keep the full retail credit rate, TEP has proposed cutting the net-metering credit rate from the retail rate to the cost of power from its most recent utility-scale solar farm, about 6 cents per kilowatt-hour, reasoning it is a similar resource.

APS has proposed a rate not much more than the avoided cost of fueling conventional power plants, about 3 cents per kwh.

In a ruling in late October, a Corporation Commission administrative law judge said regulators should scrap the current system of reimbursing customers with rooftop solar at the full retail rate for power.

For the near future, Judge Teena Jibilian said, new credit rates for solar customers should be based on short-term studies based on costs avoided by rooftop solar, or on the cost of power from large, utility-scale solar farms.

The cost studies would be based on a rolling five-year examination of the benefits and costs of rooftop solar, potentially eliminating from consideration long-term benefits including reduced pollution and public-health costs.

That riled solar advocates, who insist long-term societal benefits of solar including lessening the need for new fossil-fuel power plants and reduction of health risks should be fully counted.

The judge’s recommendation, will form the basis for the Dec. 19 hearing, but the full Corporation Commission has final say and can reject or modify the proposal.

For its part, TEP agrees with most of the judge’s decision but has sought clarification on several issues, company spokesman Joe Barrios said.

The company wants it made clear that “banking” of solar energy credits — allowing one month’s excess production to be credited toward the next month — would end under the new rules.

In commission filings, TEP said it prefers the solar-farm cost proxy for setting solar export rates over the avoided-cost methodology, but that the commission should clarify that utilities could use either.

CHILLING EFFECT

Any cuts to net-metering rates would reduce the advantages of solar and extend the financial payback period for such systems by years.

In fact, the prospect of fewer solar benefits has caused many customers to balk at installing their own panels, especially since the utilities have been telling customers changes are on the way.

Kevin Koch, owner of the local solar installation firm Technicians for Sustainability, said his business has been down since TEP filed to change net-metering policy effective June 1, 2015.

The matter was put off along with other utilities’ net-metering change requests, to await the outcome of the value-of-solar proceeding, but TEP’s notices that net-metering rates could change chilled the market, Koch said.

“That created a tremendous amount of uncertainty in the marketplace,” he said.

TEP didn’t see much of a drop off overall, however.

This year through November, TEP counted 3,019 rooftop solar installations tied to its grid, compared with 3,199 in all of 2015, and 1,937 in 2014.

The uncertainty isn’t limited to TEP.

William Rood was interested in installing solar on his SaddleBrooke home when he found that his power company, Trico Electric Cooperative, was proposing changes including new demand charges and lower net-metering rates for rooftop solar customers.

With Trico’s help he calculated that the proposed new credit rate of 7.7 cents per kwh would extend his payback period more than two years. Still, Rood decided it was worth it.

In October he spent about $20,000 to install a 6.36-kilowatt photovoltaic system that offsets most of his power usage.

“I decided to go ahead with it because it was the right thing to do,” said Rood, a retired newspaper reporter and editor.

Rood may have avoided the new rates after all.

In a pending rate settlement with the Corporation Commission’s utilities staff, the Trico net-metering changes would apply to customers who applied to install their systems after May 31. All prior customers would be grandfathered under the old rate system.

But in a recommended order issued last week, a Corporation Commission administrative law judge recommended that the new rules should apply to Trico customers who apply to install solar after the effective date of the new rates, likely early next year.

The judge in the value of solar case also has recommended that all solar customers be grandfathered under current retail credit rates until each utilities’ new rates are approved.

Though the matter isn’t settled, Rood said he’s glad regulators are rejecting the idea of retroactive changes.

“The grandfathering thing, I think, is just patently unfair,” he said.

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Deal Between SolarCity Corp And APS Ends Fight, For Now At Least

by Aman Jain (April 29, 2016) www.valuewalk.com

SolarCity made a deal with Arizona Public Service, putting an end to the public fight pitting the utility company against solar companies. On Thursday, the agreement between Arizona’s biggest utility and the nation’s largest solar company was announced, and hopefully this deal means the competing measures asking voters about how to treat rooftop solar power are finally being removed.

SolarCity SCTY

Strong foundation for future reforms

Both sides have agreed to negotiate how solar customers who produce extra power on their rooftops are to be paid. Lawmakers and Gov. Doug Ducey negotiated with SolarCity and APS. The governor’s office will participate in the talks, and if all goes well, then eventually, other solar firms and utilities will sign on as well.

Less than an hour after Republicans in the Arizona Senate started taking steps to send Arizona voters separate rates for rooftop solar users and regulate solar leasing companies as utilities, Sen. Debbie Lesko, R-Peoria, announced the deal. Lesko said these actions are intended to enable constructive discussion between Arizona electric utilities, including APS and SolarCity.

The fight started two years ago when utilities started preparing rate cases and began pushing added fees for rooftop solar customers. The rooftop solar industry fought back, saying the utilities were protecting their profit by trying to kill the industry.

Citizens’ initiative from SolarCity: the hero

The SolarCity-backed citizens’ initiative is seen as the primary reason behind the announcement. The initiative commanded utilities to pay people who produce power with rooftop solar panels the full retail price for the power they send back to the grid.

After a citizens’ initiative was filed earlier this month, Sen. Don Shooter, R-Yuma, and Lesko crafted the voter referrals with help from APS. This task needed a massive signature-gathering effort, while only House and Senate approval was required for the legislative referral.

In less than two weeks, the initiative collected more than 40,000 signatures, said Kris Mayes, the former Arizona Corporation Commissioner who was chairing the citizens’ initiative. The initiative needed 225,000 signatures to get on the ballot by July 7.

“The people of Arizona resoundingly support solar,” Mayes said. “And I think that’s why the governor’s office decided to show some leadership in this process and help these parties along.”

This is a big deal, especially that even without a precedent, a large utility like APS and the nation’s largest solar company, SolarCity, are coming together for negotiations, said Mayes.

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Arizona solar ballot initiative launched by super PAC

by Ryan Randazzo (April 15, 2016) azcentral.com

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Arizona voters could weigh in on whether utilities can charge special rates to solar customers that make it less economical to go solar.

An industry-backed super PAC called Yes on AZ Solar filed paperwork Friday seeking to place a constitutional amendment on the November ballot that would preserve the system of net metering, where utilities give solar customers a one-to-one credit for most of the excess power they send to the grid.

The group will be lead by Kris Mayes, a former chairwoman of the Arizona Corporation Commission and director of an energy council at Arizona State University’s Global Institute of Sustainability. She will take a leave from ASU to run the campaign.

The initiative is called Arizona Solar Energy Freedom Act, and because it seeks to amend the state Constitution, will require 225,963 signatures by early July to get on the ballot this fall.

AZ-Solar 02“We believe Arizonans have the right to decide this issue for themselves,” Mayes said Friday. “Do we want to be the solar capital of the world? Do we want the right to produce our own power? Arizonans will overwhelmingly say, yes, we do. Solar is part of who we are as Arizonans. This will enshrine that fact in the Constitution.”

Mayes said the initiative is being backed by the solar industry, and that additional filings will be made regarding its supporters. Christine Brown of Lincoln Strategy Group is the committee treasurer. Mayes said “significant” resources will be put into the campaign.

“We are in this to win it,” Mayes said.

Arizona Public Service Co. and other utilities have been adding new fees to solar customers, contending they don’t pay their fair share of maintaining the power grid. The initiative, if passed, would end that practice.

AZ-Solar 03“This is a ridiculous attempt by California billionaires to get richer by forcing higher energy costs on Arizona consumers,” APS spokesman Jim McDonald said Friday. “It works against Arizona families and is detrimental to sustainable solar in Arizona.”

Net metering helps customers lower their utility bills because the credits they get for excess power accumulate and offset power they draw from their utility at night or when they have multiple appliances running, requiring more power than their solar panels generate. Except for rural homes off the power grid, most solar homes don’t have batteries to store the power, so it must be used instantly or sent to the grid for others to use.

Utility policies such as net metering traditionally have been regulated by the five Arizona  commissioners, who are elected to their statewide office and vote on such matters. Commission Chairman Doug Little on Friday declined to comment on the initiative, saying he wanted to take the weekend to review it.

Utilities adding fees for solar customers

As the price of solar panels dropped in recent years and leasing arrangements became common, utilities across the country have sought ways to amend net metering and get solar customers to pay more for their utility service.

In addition to preserving net metering, the initiative seeks to protect solar customers from other fees that single them out, and from unnecessary delays in gaining utility approval to begin generating power, which has been a problem recently as some customers wait weeks to turn their systems on.

The initiative would protect solar customers for six years, through 2022. After that, new solar customers could face rate changes, but those who install solar by then would be allowed to remain on their existing rate plans as long as they continued to use solar.

Mayes said the initiative would prevent fees like those in Nevada, where regulators made changes in December and February to solar customers’ rates. That prompted some solar companies to leave the state.

AZ-Solar 04UniSource Energy Services, with 93,000 customers in Mohave and Santa Cruz counties, is requesting similar changes from its regulators at the Arizona Corporation Commission and the state’s biggest utility, Arizona Public Service, is scheduled to file a rate case in June that is expected to make major changes to solar rates, in addition to the average $5 a month in special fees those customers pay now.

If the Arizona Corporation Commission approves new solar-specific rates, and the initiative makes it to the ballot and passes, then the utilities will be given 90 days to come into compliance with the law.

Letting voters weigh in on solar debate 

The UniSource case has drawn support from utilities like APS and opposition from the statewide solar industry, which fears that if they pass, they will set a precedent for APS and other utilities.

“Time has shown that demand rates are not popular,” said Mark Holohan of Wilson Electric, a board member of the Arizona Solar Energy Industries Association, who learned of the ballot initiative Friday.

“All the utilities in Arizona are proposing radical changes to residential rates,” Holohan said. “I think this is an exciting thing to go to the people of Arizona to seek their opinion on the subject, since there appear to be some radically different thoughts on it.”

Salt River Project, which is regulated by its own elected board of directors, enacted new rates on solar customers last year and has seen a dramatic drop-off in the number of people installing solar. The initiative Mayes is pushing would not affect SRP rates, only those investor-owned and co-op utilities regulated by the Arizona Corporation Commission.

The initiative comes just weeks after two solar advocates won election to the Salt River Project board of directors, traditionally a difficult, small-time election for outsiders to win.

Paul Hirt and Nick Brown ran for the board because they disagreed with the board’s new solar fees. Those charges can largely wipe away any savings solar customers see by generating their own power.

Hirt is an Arizona State University professor of history and sustainability. Brown is an energy consultant who moved to the area in 2011 to help ASU develop solar.

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