Tucson Electric Power proposes new utility-owned rooftop solar program

Dive Brief:

Shortly after Arizona Public Service came out with its groundbreaking rooftop solar proposal, Tucson Electric Power Co. (TEP) has proposed its own utility-owned distributed generation program that would install solar panels on the roofs of customers.
In return for the use of their rooftop, customers would lock in a fixed monthly power rate for the projected useful life of the project, which is about 25 years.
The plan has drawn attention from the Arizona solar industry. The utility could be competing with local installation companies, and ratepayer advocates are wary of the benefits for customers.

Dive Insight:

Proposed as part of TEP's 2015 Renewable Energy Standard and Tariff, Tucson Electric would spend $10 million to cover the cost of the 3.5 MW distributed generation project. A typical customer spending $90 to $100 a month could lock in a $99 per month power bill for 25 years unless they increase their usage by more than 15%. "In that case, a participating customers' fixed energy rate would be reset to match their new energy consumption," the utility said.

The project is somewhat similar to a 20 MW proposal by Arizona Public Service, which would install solar panels on customers' roofs in exchange for $30 monthly bill credits for 20 years.

TEP's program would expand consumer choice, the utility told regulators, by providing an alternative to the cash-purchase and third-party leasing models currently in place for customers seeking distributed generation solutions.

But because TEP is not a solar installer, the utility said it would use a competitive bidding process to employ local contractors for the work. "In this way, the program will support the continued success of local solar energy installers," TEP said.

Arizona Daily Star reports that reaction to the proposal has been cautious. Local solar installers say it would let the utility compete with them, but they stopped short of criticizing the proposal and instead noted it could wind up being a positive development.

Court Rich, an attorney representing The Alliance for Solar Choice, gave the Star a harsher version. "We think TEP is trying to go into a completely new market and compete on an unlevel playing field in a market that’s already served by competitive forces,” he told the paper. “And that never results in lower prices; that never results in a good deal for ratepayers.”