Arizona regulators consider dropping rooftop-solar mandate

State utility regulators are considering plans to waive — or possibly eliminate — a mandate that Tucson Electric Power Co. and other utilities get a certain amount of renewable energy from rooftop solar installations.

The Arizona Corporation Commission already has phased out ratepayer-funded financial incentives for customers who install solar photovoltaic systems, shifting funding to large utility-scale arrays.

Now at issue is the way TEP and other utilities count customer-owned photovoltaic installations toward meeting the state’s renewable-energy standards.

The commission could vote on the issue, which besides TEP involves Arizona Public Service Co. and TEP’s rural sister utility, UniSource Energy Services, as soon as its next open meeting today.

The utilities say they may not be able to meet state renewable-energy mandates for so-called distributed energy generation — mainly rooftop residential and commercial photovoltaic systems — because they can no longer exchange incentives for credits toward their renewable-energy goals.

Under state rules, APS, TEP and other state-regulated power companies are required to incrementally increase the share of renewable energy they sell to 15 percent of their retail sales by 2025. For 2014, the threshold is 4.5 percent.

The rules also require that 30 percent of the renewable-energy total must be distributed generation — as opposed to big utility-owned or contracted systems — and residential systems must make up half of that total.

Utilities have met that mandate by buying so-called “renewable-energy credits” from customers who install solar on their properties.

The commission has ended most ratepayer-funded incentives for rooftop photovoltaic systems, though solar hot-water systems still qualify.

Many customers are now installing solar without any ratepayer-funded incentives, though state and federal tax credits are still available. But under the current rules, the utilities are unable to count them toward meeting the state renewable-energy mandate.

APS says in documents filed with the commission that it has been unable to get credit for some 20 megawatts of customer-installed solar on its grid, and it is urging the Corporation Commission to drop the distributed-generation requirement altogether.

TEP also has proposed elimination of the rooftop-solar mandate, and now supports a waiver of the requirement as a short-term compromise, spokesman Joe Barrios said.

The rooftop solar requirement “did what it was supposed to do. It fostered the industry and encouraged the adoption of renewable energy,” Barrios said.

After a series of hearings, a Corporation Commission administrative law judge has recommended that the utilities be able to apply annually for a waiver of the distributed-generation requirement.

The hearing judge also recommended a proposal floated by the commission’s staff that would allow utilities to track and monitor rooftop PV installations and reduce their distributed-generation requirement accordingly.

But solar industry advocates want to keep the rooftop solar mandate and oppose allowing utilities to count installations that weren’t funded with state incentives toward the renewable-energy requirements. Among other objections, they contend the practice could lead to double-counting of renewable-energy credits, since markets have been set up to certify and trade or sell such credits.

Source: Arizona Daily Star

 

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