Thompson: It’s too soon to end Arizona’s solar incentives
June 15, 2013
There may be no better place on the planet to generate solar electricity than Arizona. The entire state shows up as a big red stain on solar radiation maps, and the state's numerous canals, fallow fields, zombie subdivisions and parking lots — not to mention its nearly 3 million rooftops — are like a big blank canvas just begging to be plastered with power-generating solar panels.
In the last two years, Arizona has taken advantage of all that sun and space. The state now has 1,079 megawatts of installed solar capacity, good enough to make it second in the nation, with just under one-third of that coming from solar panels on residential and commercial rooftops. That's thanks in part to progressive solar-incentive programs, notably net metering, put in place several years ago by the Arizona Corporation Commission, which serves as the state's public utility commission.
Net metering, which allows consumers to run their electric meters backward with power generated by rooftop solar panels, has been particularly successful. But now that program, along with Arizona's other solar incentives, is under attack. During last November's elections, the commission's two Democrats, both of them pro-solar, were voted off the board, making it fully Republican.
In the past, solar was bipartisan in Arizona. In fact, a Republican-led corporation commission implemented the state's current incentives, considered some of the most progressive in the nation. Barry Goldwater Jr., a GOP icon, is currently leading the charge to keep net metering in place, though the Goldwater Institute, started by Barry's uncle, opposes renewable energy.
These days, the five Republicans on the commission take a hard line. In January, they revoked an incentive for commercial solar, which pays producers for each watt produced, a move that some in the industry said would kill their business. Then they toyed with the idea of gutting the mandate that utilities must get 15 percent of their power from renewables, though they dropped that after they realized how many renewable-related jobs would be lost. And now, the commission, along with Arizona Public Service, the state's largest investor-owned utility, are targeting the net metering program, all in the name of cutting electric ratepayers' bills by a few cents per month.
Arizona's program is especially strong because it allows the customer to install enough generation to offset 125 percent of a home's total demand, and the owner gets paid retail rates for that power. In other words, it makes it fairly easy to offset an entire electric bill, including the costs for using the power lines that are built into its regular rates.
And therein lies the rub for the utilities. Arizona Public Service argues that the solar rooftop customer is getting out of paying for using its transmission lines, substations and the like, and that those costs are then being pushed onto other customers. That adds up, said the utility's CEO Don Brandt in an op-ed in the Arizona Republic. He charged that net metering ends up costing the average non-solar-generating APS customer some $20,000 over a lifetime.
Brandt's math is a bit dubious. Two studies, including one commissioned by the utility back in 2009, concluded that net metering will provide a benefit to ratepayers in the long-term. But his gripes aren't entirely unreasonable.
To be fair, it seems unlikely that the utility or the commission will end net metering. Their real goal seems to be making the rate structure fairer, which might involve paying far less for rooftop solar, or charging net-metered customers a service fee for infrastructure. Either plan would make it virtually impossible for someone to zero out a utility bill.
When a million Arizona rooftops are gleaming with solar panels, perhaps such changes will make sense. But now is not the time to act. Only about 2 percent of Arizona Public Service's 1 million customers have rooftop solar, which is not enough to make a significant difference environmentally or, for that matter, to the utility's bottom line. It rakes in some $600 million in net income annually.
In other words, while Arizona is making progress on solar, it needs a lot more. And that's what incentives are for: They encourage folks to do something worthwhile to help the world and themselves. That's why it's critical for Arizona to keep the net metering in place, just as it is.
Jonathan Thompson is a contributor to Writers on the Range, an op-ed service of High Country News (hcn.org).
He is a Durango, Colorado-based senior editor of the magazine, which is headquartered in Paonia, Colorado.
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