News Brief

Solar Homes Slapped with Fee by Arizona Utility

December 30, 2013

The usage fee for grid-tied residential solar systems has both utilities and environmental groups watching the impact on installations.

Protesters gathered to object to a grid usage fee proposed by the Arizona Public Service Co., but the Arizona Corporation Commission ruled in favor of the utility.

Photo: The Sierra Club
In what could become a trend, an Arizona utility will soon begin charging a monthly fee to homeowners with net-metered solar systems—solar photovoltaic systems that feed electricity back into the grid.

Arizona’s largest utility, the Arizona Public Service Co., will charge a $0.70 per kilowatt fee to homeowners with solar systems installed or contracted after December 31, 2013. A homeowner with a typical 7-kilowatt solar system will pay $4.90 a month.

The fee was authorized in November 2013 by the Arizona Corporation Commission, which found that costs of maintaining the grid for net-metered solar systems were unfairly being shifted to homeowners without panels. Nearly 1,000 protesters attended the hearing, arguing that homeowners installing solar have reduced demand on the grid and that penalizing them isn’t fair.

Now, more utilities are poised to follow suit; California has already approved leveraging fees up to $10 a month, and the American Legislative Exchange Council (ALEC), an organization known for drafting legislative templates used to enact conservative state and federal policies, plans to push for more of the same type of enabling legislation. John Eick, the legislative analyst for ALEC's energy, environment, and agriculture program told The Guardian, “As it stands now, those direct-generation customers are essentially free riders on the system. They are not paying for the infrastructure they are using.”

Other organizations warn the push is less about grid maintenance costs and more about trying to cripple the growth of renewable energy. The Sierra Club cites the fact that Arizona Public had first requested a much larger fee—$50 or more a monththat would have effectively eliminated the financial incentive to install solar panels.

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