APS battles rooftop solar

Recently there has been a fair amount of news about Arizona Public Service’s proposal to change rooftop solar for residential customers in APS territory.  APS has proposed to change how solar production is valued when produced by a homeowner’s system, and the most aggressive proposal would reduce the value by as much as 75%.

Why is APS doing this?

For years APS has encouraged customers to go solar by installing systems on their roof, even offering generous cash incentives to offset the cost of installation.  But over the last 4 years the solar industry has progressed so quickly and efficiently that APS is afraid of the long-term business implications.  Simply put, APS customers generating their own electricity at home is not good for the monopoly’s for-profit business.

Cash incentives for residential solar installations from APS are set to permanently expire within 30 days, but the solar industry in Arizona isn’t expected to miss a beat.  The solar industry has weaned itself off utility incentives and is prepared for long-term growth.

Similar to cell phones overtaking and replacing land lines in the telecommunications industry, distributed electric generation from sources like solar are threatening to disrupt the traditional utility model in the electric industry.

One interesting tidbit from the recent APS proposal: they revealed that their weighted average cost of electricity based on the Dow Jones Palo Verde Electricity Price Index has decreased by ~50% over the last few years, resulting in the new lower value for solar electricity.  How many APS customers have felt significant price breaks due to these wholesale discounts APS is receiving?

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