Arizona utility embraces rooftop PV

In a move that has drawn sharply divided opinions from the US solar industry, Arizona Public Service Company, the dominant statewide utility, has laid out a plan to pay residential customers to allow it to install and own PV systems on their rooftops.

APS has asked the state’s utility regulator for permission to install 20MW of PV capacity across 3,000 residential rooftops in the state, at a cost of $57m-$70m.

The plan will come as a surprise to many in the solar industry. APS is widely viewed in a negative light by the PV sector, due to its successful push last year to levy a monthly grid-maintenance fee on PV system owners – a move seen as a dangerous precedent for states with net-metering policies in place.

Privately owned APS is a regulated monopoly in the areas it serves, meaning it must get the approval of the state’s utility regulator, the Arizona Corporate Commission, before making many decisions.

The plan would see APS giving selected homeowners a $30 credit on their monthly power bill for 20 years, equivalent to $7,200 in total. APS would maintain ownership of the PV systems, which would typically be sized between 4kW-8kW.

APS would competitively select local installers to put the systems in place.

Little or none of the electricity generated by the PV systems would be consumed on-site; instead it would flow back onto APS’s wires, with the utility to strategically select the sites in order to “maximise system benefits”.

In making its case to the Arizona Corporate Commission, APS leaned heavily on the notion that it would be able to offer PV systems to homeowners that might not otherwise qualify for them through private companies like SolarCity and SunRun, perhaps due to having a low credit score.

The plan “will provide all customers – including those who cannot currently afford it – an opportunity to go solar”, APS said in its request.

By and large, the rooftop PV industry responded negatively to the news, with many companies – as well as the Solar Energy Industries Association – saying that it amounts to a Trojan Horse of sorts, coming from a utility that has seen PV as a threat.

Being able to offer solar systems to customers with low credit scores would give APS an unfair advantage, they argue, in that it can simply bake any risk or added cost into the rates it charges Arizona electricity consumers as their monopoly provider.

However, some smaller local installers welcomed the news, viewing it as an opportunity to grab installation work at a time when that industry segment is fast consolidating.

“This is an effort to reassure our customers that this is not the staid, old, stodgy utility company,” an APS spokesman told local media.

APS also has the option to buy 20MW of large-scale ground-mount PV capacity, which it admits would generate more electricity -- but which would not give it the chance to experiment with in-house distributed PV capacity.

Whatever the outcome, it needs to happen fast. APS would need the 20MW of solar capacity by the end of next year to meet its mandatory obligations under Arizona’s Renewable Portfolio Standard.

The utility requested that the regulator expedite its decision, as an “aggressive” 15-month window would be needed to issue a request for proposal from local installers, find 3,000 rooftops, and get the systems installed by the end of 2015.