In Sunny Arizona, A Crucial Vote on the Future of a Solar-Powered Nation
Are state-level utility companies trying to crush the solar revolution before it goes national?
The power of the sun—including the financial benefits it rewards—has become a hot political issue in sunny Arizona.
And, with the second largest rooftop solar energy market in the United States, an otherwise ignored panel discussion by Arizona's utility commission on Thursday has earned the intense attention of solar energy's biggest backers and the industry's largest companies.
On Wednesday, over a thousand people reportedly attended a rally outside the Arizona Corporation Commission offices in Phoenix to make their voices heard. Experts on the issue say that a pending announcement by the five-member panel, should it favor demands being made by the utilities, could end the rapidly expanding 'rooftop revolution' that has captured the state in recent years.
“It was all hands on deck, the people represented there were solar workers, companies were reaching out their employees, solar customers were there, environmental advocates,” said Rosalind Jackson, communications director for Vote Solar Initiative, who helped organize the turnout. “It was a pretty broad spectrum of supporters.”
The solar fight in Arizona pitches decentralized energy supporters—including homeowners with rooftop arrays and those who sell, lease and install them—against the major utility companies in the state who are demanding either a hefty new tax on solar customers who provide energy to the grid or a decrease in the rate at which they are paid.
Produced by the solar industry coalition called The Alliance for Solar Choice (TASC), this video attempts to explain how so-called "net metering" benefits everyone connected to the grid as it blasts the utility companies as outdated energy "monopolies":
And as Reuters explains, the concept of 'net metering' in which solar customers can sell their excess rooftop energy to the utilities, has enormous implications for the solar industry both in Arizona and beyond:
The policy has buttressed the growth of rooftop solar because it helps reduce the cost of going solar for homeowners. But utilities say it has another impact: it shoulders citizens who don't have solar panels with an unfair share of the cost to maintain the electric grid. [...]
If the Commission adopts either of [the utilities-backed] proposals, companies like SolarCity Corp, Sunrun and others who finance or install residential solar systems could see the critical part of their sales pitch - monthly payments on their solar panels that are less than what they were paying the utility company - erode significantly.
Not only would policy changes hurt the fast-growing market for financed solar systems, they would also either extend the payback period for consumers who lay out the roughly $20,000 to $30,000 to own their solar panels outright, or force installers of those systems to take a hit to their margins.
That would be a big setback to solar businesses in sunny Arizona, which was the No. 2 state for photovoltaic solar installations in the second quarter of this year. The state's solar industry employs about 10,000 people.
According to a recent article by Marc Gunther, a contributing editor at Fortune magazine and senior writer at Greenbiz.com, the solar industry is in breakout mode and these state-level battles are becoming increasingly important as the solar industry goes toe to toe with the conventional energy system that is epitomized by the utility companies. At the Yale Environment 360 blog, Gunther wrote:
Today’s solar industry is puny – it supplies less than 1 percent of the electricity in the U.S. – but its advocates say that solar is, at long last, ready to move from the fringe of the energy economy to the mainstream. Photovoltaic panel prices are falling. Low-cost financing for installing rooftop solar is available. Federal and state government incentives remain generous.
Yet opposition from regulated utilities, which burn fossil fuels to produce most of their electricity, could stop a solar boom before it gets started.
Several utilities, including Arizona Public Service and Denver-based Xcel Energy, have asked their state regulators to reduce incentives or impose charges on customers who install rooftop solar; so far, at least, they aren’t making much headway. A bill in the California legislature, backed by the utility interests would add $120 a year in fees to rooftop solar customers.
As the following video explains, two days of public hearings before the Arizona Corporation Commission, which regulates utilities in the state, were scheduled for Wednesday and Thursday with a determination about the rate scheme or possible changes expected soon after.
Recent polling in Arizona shows significant support for net metering policies currently in place. In fact, the idea of a feed-in energy system—a cause célèbre for progressives and environmentalist all over the world—has become so popular in the political 'deep red' state of Arizona, that one headline this week warned that "blocking solar" in the Republican-dominated state would be tantamount to "political suicide." According to that article, 77% of respondents in the Republican-dominated Maricopa County "would be less likely to vote for an election candidate if they proposed ending support for solar."
Additionally, one of the main pro-solar groups found championing the current net metering rates is called TUSK, which stands for Tell Utilities Solar won't be Killed, which is chaired by none other than Barry Goldwater, Jr., former Republican congressman and son of the presidential candidate. Here he is, shilling for decentralized solar power: