NEW YORK – Arizona has permitted its largest utility to charge a monthly fee to customers who install photovoltaic panels on their roofs, a move that may threaten the surging residential solar market.
The Arizona Corporation Commission, which regulates utilities in the state, agreed in a 3-to-2 vote at a meeting Saturday in Phoenix that Arizona Public Service Co. may collect about $4.90 a month from customers with solar systems.
Arizona Public is required to buy solar power from customers with rooftop panels, and the commission agreed with its argument that the policy unfairly shifts some of the utility’s costs to people without panels. Imposing a fee designed to address this issue may prompt power companies in other states to follow suit, and will discourage some people from installing new systems, according to the Sierra Club.
The “decision to add new charges to Arizona’s main rooftop solar program will stifle the growth of our clean-energy economy,” Will Greene, the organizing representative for the Sierra Club in Phoenix, said in a statement Saturday.
The fee will apply to solar systems installed or contracted after Dec. 31 and works out to 70 cents a kilowatt. A home with a typical 70-kw solar system will pay $4.90 a month, and people with more panels will pay more.
Arizona Public has about 18,000 solar customers now who won’t be affected. It is adding about 500 more a month and expects to have about 20,000 customers who won’t pay the fee for sending excess solar energy to its system.
Arizona Public had requested a fee of $50 a month or more, and the commission’s decision “falls well short of protecting the interests of the 1 million residential customers who do not have solar panels,” Chief Executive Officer Don Brandt said in a statement.
The company was pleased the commission “determined that net metering creates a cost shift,” Brandt said. Arizona Public is a unit of Phoenix-based Pinnacle West Capital Corp.
Arizona is one of 43 states that require utilities to buy solar power from customers under a policy called net metering. This lowers the monthly power bills for people with solar systems and reduces revenue for the power companies. Arizona Public argued that the policy forces it to raise rates on all customers to cover the fixed costs of maintaining the grid.
The utility spent $3.7 million to promote its argument, compared with about $330,000 spent by the solar industry, according to documents filed with the commission.
An estimated 1,000 people were at the meeting, almost universally opposing the fee.