Arizona’s Solar Wars Pits Utilities Against Rooftop Installers

(3BL Media/Justmeans) - You would think that Arizona, with its vast expanses of desert and abundant sunshine would be one of the best places in the US for solar power. Geographically speaking, you would be correct, but unfortunately. that is not the whole story. While daytime sun shines almost continuously there, politics in the state have cast some dark clouds that threaten to put a drag on the state’s acceptance of this clean energy source.

While adoption of solar energy is heating up all around the country, something else that seems to be particularly warm in Arizona are the relations between utility companies and state lawmakers.

The state just issued a new set of rules that address concerns over solar leases, a popular new method of financing home solar, which often requires little or no money down. The lawmakers claim that the regulations are for consumer protection, but Lyndon Rive, CEO of SolarCity, says that they are just camouflage for efforts to oppose solar’s growth in the state. Rive calls Arizona “the most hostile state we operate in.” SolarCity, the largest solar retailer in the US, operates in 18 states plus D.C.

It might just be a tempest in a teapot. The rules require solar installers to fully disclose how much the systems will cost over their lifetime, and provide assurance that they panels will work as advertised. One could argue that if it’s such a good deal, why not fully disclose?

That’s pretty much how Donald Brandt, chairman and CEO of Pinnacle West Capital Corp., the parent company of Arizona Public Service Co. says he sees it.  “No solar installer should be opposed to this bill. “We suspect the issue for some rooftop leasing companies is to avoid scrutiny of their leasing model and the complexity of these consumer leases.”

That all sounds very considerate. But I wonder if the banker who provided you the mortgage for your home was required to point out to you the full amount you’d be spending over thirty years, if that wouldn’t give you pause. It’s true that leases generally cost more than purchase options, but people like them anyway because of the low upfront cost.

Debbie Lesko, the state senator who proposed the rules, claimed that she and another legislator have received about 45 letters and dozens of telephone calls this year from consumers unhappy with their solar leases. There were complaints about SolarCity and other leasing firms to the state Registrar of Contractors, which regulates solar installers. A total of 394 solar companies operate in the state. Nearly all the complaints were resolved.

Perhaps the bigger battle is over how much the utilities are required to pay homeowners when the “buy back” excess power. Some states require them to pay retail prices, others say they only need to pay wholesale. Another point of contention are fees that utilities are charging to help cover the infrastructure costs that used to be included in the monthly bill. Since customers use the grid when they sell excess power back, it’s reasonable that they should contribute towards its maintenance. How much is another question.

Arizona’s Public Utility Commission approved such a fee in 2013, at 70 cents per installed kW, it was well below the $8 utilities had asked for. The typical solar homeowner pays $3-6 per month, depending on the size of the installation. Without that fee, the burden would fall onto those customers left behind as more and more customers make the choice to produce their own power.

Still, with all this, Arizona has some 247MW of solar capacity, installed on 35,000 homes. That makes it the fifth highest in the nation, behind California, North Carolina, Nevada, and Massachusetts. As you can see, it’s not always the sunniest states that have the most solar. Also worth noting, all utility-scale generating capacity added in Arizona in 2014 was solar.

Image credit Jerry Ferguson: Flickr Creative Commons