Policies: Solar

Solar Phoenix 1 & 2: Solar Rooftop Financing

Published May 2013
Tags: , , ,

(download full brief)

The essentials

  • Solar Phoenix 1 & 2 are a series of city-sponsored residential solar financing programs.
  • The Solar Phoenix program is a federally-recognized public-private partnership that allows Phoenix home owners to finance solar panels through leasing at low or no upfront costs.
  • The National Bank of Arizona funded both Solar Phoenix 1 & 2 with $25 million to initiate the program. The City of Phoenix partnered with Solar City for the first iteration and currently partners with Paramount Solar to provide panels, installation services, and maintenance.
  • The leased solar panels are expected to generate sixty to eighty percent of a residence’s power demand.

APS & TEP 2013 REST Distributed Generation Incentives

Published February 2013
Tags: , ,

(download full brief)

The essentials

  • On January 23, 2013, the newly-elected Arizona Corporation Commission (ACC) unanimously voted to end all photovoltaic (PV) rooftop incentives for commercial/non-residential entities for both APS and TEP.
  • They also voted unanimously to reduce APS’s combined residential photovoltaic (PV) rooftop and solar water heater (SWH) incentives to $4.48 million. TEP’s combined residential PV rooftop and SWH incentives budget was set at $744,486. Commissioner Pierce stated 2013 will likely be the last year that regulated utilities will offer residential incentives.
  • The ACC stated incentives are no longer necessary to continue the commercial solar distributed generation markets. The Solar Energy Industries Association predicts a serious market contraction in the wake of the Commission’s decision.

APS's Track and Record Proposal for Renewable Energy Credit Compliance

Published February 2013
Tags: , ,

(download full brief)

The essentials

  • In its 2013 REST implementation plan submitted to the Arizona Corporation Commission, Arizona Public Service (APS) proposed eliminating all incentives for distributed generation (DG) renewable energy systems.
  • Under the REST, regulated utilities such as APS are required to obtain a certain amount of Renewable Energy Credits (RECs). One REC is created for every kilowatt hour generated, and is the property of the owner of the distributed generation system.
  • APS currently purchases its RECs by offering cash incentives to DG owners. Without incentives, APS will be unable to obtain the required amount of RECs.
  • APS proposes severing the relationship between generation of energy and ownership of RECs. Instead, APS proposes demonstrating compliance with the REST by tracking and recording all distributed energy production that is interconnected within its service territory.
  • Critics argue this would violate the REST and constitute a government taking of private property.

Solar Power Purchase Agreements

Published June 2012
Tags: ,

(download full brief)

The essentials

  • A Power Purchase Agreement is a contract between multiple parties, one who generates electricity for the purpose of sale (the seller) and one who is looking to purchase electricity (the buyer).
  • The PPA defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination.
  • A PPA is the principal agreement that defines the revenue and credit quality of a generating project and is thus a key instrument of project finance.
  • There are many forms of PPA in use today. PPA’s vary according to the needs of buyer, seller, and financing counterparties.
  • PPA’s have grown popular because the installation, operation, and maintenance costs associated with rooftop solar systems can be overly expensive for individual property owners.

Arizona's Net Metering Rules

Published June 2012
Tags: ,

(download full brief)

The essentials

  • The Arizona Net Metering Rule allows customers to receive credit for excess electricity they generate from renewable energy installations at their home or business.
  • Both electricity purchased from the utility and electricity generated by the customer is measured with a bi-directional meter installed at the house of the customer.
  • Any net excess electricity generated in one month is carried over as a kilowatt-hour credit onto the customer’s next bill.
  • At the end of the calendar year, customers receive a check or a billing credit from the utility for any unused kilowatt-hour credits.
  • Utilities must annually file with the Arizona Corporation Commission proposed tariffs; such tariffs set standard rates for the annual purchase of credits. The tariff is then added to each utility customer’s electricity bills.
  • Update December 2013:

    On November 14, 2013, the ACC voted to implement a $0.70/kW fee for customers with rooftop solar installations who participate in their net metering program. The fee equals roughly $5/month for a typical residential installation. The ACC agreed to review the net metering policy in more depth during the next APS rate case.

Overlay Zoning for Renewable Energy and Transmission Lines

Published March 2012
Tags: , , ,

(download full brief)

The essentials

  • Overlay zoning can ease policy issues facing renewable energy generation development and transmission line development, including issues such as: 1. The time required for the permitting process; 2. The conundrum of transmission line development that is critical to renewable energy development in isolated areas.
  • Gila Bend, Arizona has promoted its burgeoning solar industry through Solar Field Overlay Zones (SFOZs).  Other parts of the country have implemented similar overlay zoning plans to ease renewable energy development permitting processes. Imperial County, CA and Klickitat County, WA have successfully implemented this zoning strategy to encourage geothermal power plants and wind energy power plants, respectively.
  • SFOZs operate as a placeholder for both distributed generation and utility-scale solar generation projects while also decreasing the permitting process timeline from as much as one year to as little as four weeks.
  • In Texas, there was little to no transmission line capacity for optimal wind energy project sites. In 2005 they began planning Competitive Renewable Energy Zones (CREZs) to address encourage transmission line development.
  • CREZs have led to the development of transmission line capacity for 6,000 MW of wind energy, with 18,500 MW planned, throughout the state of Texas.

BLM RDEP draft EIS

Published March 2012
Tags: , ,

(download full brief)

The essentials

  • The BLM proposes to support renewable energy development while also protecting and restoring landscapes in Arizona through its Restoration Design Energy Project (RDEP).
  • The RDEP will streamline part of the initial process for renewable energy development on public lands by vetting the areas before renewable energy developers submit proposals.
  • In the BLM’s draft environmental impact statement (DEIS), the BLM identified and analyzed six Alternatives plus the required No Action Alternative.
  • The BLM’s preferred alternative is Alternative 6 Collaborative-based Renewable Energy Development Areas (REDA) and the Agua Caliente Solar Energy Zone (SEZ). Alt. 6 allows for 237,100 acres for REDAs and 6,770 acres for SEZ.
  • The public comment period on the DEIS ended May 17, 2012.