Dive Summary:

• Under the Renewable Energy Standard and Tariff, utilities must source 15 percent of their energy portfolios from renewable sources by 2025; 2012’s milestone is 3.5 percent and every Arizona utility is expected to meet or exceed that goal.
• As the cost of photovoltaic hardware has declined while demand increased, Arizona’s utilities have lowered their renewable energy credit (REC) payments.
• The problem with the potential lack of RECs going forward is that utilities will have no verifiable way to demonstrate their compliance with the state’s renewable energy mandate and a solution has yet to be offered.

From the article:

The incentives offered by Arizona's electric utilities have spurred their customers to install photovoltaic systems, which helps the companies comply with a mandate for renewable energy distribution. The incentives are renewable energy certificates, which are purchased by utilities from customers producing energy. But the RECs may soon become unnecessary – at least for the residential market – because the cost of producing PV energy is sinking towards parity with the cost for grid power.

This rapidly approaching reality is raising a tricky question: how will utilities demonstrate their compliance with the state's renewable energy mandate without RECs? ...