| LOS ANGELES
LOS ANGELES Nov 13 Arizona utility regulators
on Wednesday began considering the fate of a little-known solar
subsidy that, if altered, would be a major blow to the
burgeoning U.S. rooftop solar industry in one of its biggest
The outcome of the long-awaited two-day hearing is being
closely watched by utility and solar players far beyond the
Grand Canyon State. In Arizona and elsewhere, the two industries
are increasingly at odds over a policy known as net metering,
which allows homeowners with rooftop solar systems to sell the
power they don't use back to their utilities at retail rates.
Arizona became the nation's top battleground over net
metering when its biggest utility, Arizona Public Service,
earlier this year sought approval from regulators to either add
a charge to solar customers' bills or to lower the price at
which it will buy the excess power their panels generate.
The utility argued that the dramatic growth of residential
rooftop solar in its service territory - systems are being added
at a rate of about 500 a month - has shifted $18 million in
annual costs to non-solar customers.
If the Arizona Corporation Commission adopts either of APS's
proposals, companies like SolarCity Corp, Sunrun and
others who finance or install residential solar systems could
see the critical part of their sales pitch - monthly payments
that are lower than their utility bills - erode significantly.
That would be a big setback to solar businesses in Arizona,
which was the No. 2 state for photovoltaic solar installations
in the second quarter of this year. The state's solar industry
employs about 10,000 people.
The hearing in Phoenix kicked off with a morning of
testimony from members of the public, most of whom said they
were solar system owners and against the APS proposals. The
chief executive of SolarCity, the nation's top solar panel
installer, also made an appeal to the five-member panel.
"The truth is APS is afraid of the competition and doesn't
want to give consumers the control," SolarCity CEO Lyndon Rive
The Commission members, who are elected officials, are
expected to vote on the issue on Thursday.
Challenges to net metering have cropped up in several states
in recent years, but it has yet to be rolled back in any of the
43 states with such policies. Utilities have argued that solar
customers in states with net metering policies enjoy the
benefits of being connected to the electric grid without
shouldering the costs to maintain it. They argue that as more
homeowners go solar, those costs will be spread out over fewer
and fewer utility customers.
The solar industry, meanwhile, says net metering is critical
to making solar affordable and underpinning the whopping 76
percent growth rate in U.S. solar installations last year.
In Arizona, the two sides in the last few months have waged
high-profile ad campaigns to win over the public.
APS's parent company, Pinnacle West Capital Corp,
said earlier this month it had spent $3.7 million on lobbying
efforts tied to the net metering issue in Arizona.
The Alliance for Solar Choice (TASC), whose members include
SolarCity, Sunrun, Sungevity, Solar Universe, Verengo Solar and
REC Solar, had spent more than $335,000 as of Oct. 31 and
planned to spend an additional $100,000.
Arizona Corporation Commission staff have recommended the
Commission take no immediate action on net metering and instead
evaluate the issue during APS's next rate case in 2015.