Staff Writer
Columbus CEO

c.2013 New York Times News Service

In voting to impose a modest charge on new residential solar customers, Arizona’s power regulators have ended, for the moment, a bitter fight between the rooftop solar industry and the state’s main electric utility.

The closely watched decision, which came late Thursday after months of increasingly heated debate from both sides, preserves a credit system that has been a powerful incentive in attracting solar customers and adds less compensation than the utility, Arizona Public Service, had sought.

The compromise on the credit system, which is known as net metering — it pays residential and commercial customers for excess renewable energy they send back to the grid — allows it to continue. But it sets up a future battle over the value of decentralized solar power that will play out across the country.

More than 40 states offer some form of the incentive, according to the Energy Department, and the credit programs are under scrutiny in nearly all of them, advocates say.

In the Arizona case, as in others this year, regulators have told the utilities to re-examine their entire rate structure, not just net metering, said Bryan Miller, president of the Alliance for Solar Choice, a lobbying group, and vice president for policy at Sunrun, a residential installer.

“The commissions and the regulators are telling them to go fix them, but fix them for everyone, not just for solar customers,” he said. Referring to the utility, he added, “Those fees are real and they’ll have a real impact on the industry, but they do not accomplish APS’ goal of destroying the rooftop solar industry.”

The Arizona utility claimed a victory as well in the regulators’ recognition that solar customers put a financial burden on nonsolar customers, which solar advocates dispute.

“The distributed rooftop solar industry has just been pushing for so long, ‘There’s no cost shift, there’s no cost shift, there’s no cost shift,’ and I think increasingly you’re seeing people both in California and Arizona and in other places say, ‘No, this is a real issue and we’ve got to deal with it,’” said Jeff Guldner, senior vice president for customers and regulation of Arizona Public Service. “If we don’t do something to address it you’re going to have the system collapse.”

In a 3-2 vote, the regulators, the Arizona Corp. Commission, agreed that there was a shift and set a fixed charge, 70 cents per kilowatt of system capacity, to pay for it.