After many months of controversy, regulators finally settled the solar showdown in Arizona.
Well, sort of.
Arizona Public Service (APS) originally requested that the Arizona Corporation Commission (ACC) either add an $8 per kilowatt grid-connect fee or change the structure of net metering to compensate rooftop solar owners based on wholesale electricity prices, rather than retail electricity prices. And after two days of hearings, the ACC enacted the first grid-connection fee for rooftop solar in the U.S.—but the $0.70 per kilowatt fee is far lower than what APS was seeking.
So while some called the decision “unprecedented” and “historic,” it is not immediately clear who won.
Don Brandt, chairman, president and CEO at APS, declared victory to some degree in the aftermath of the ruling: "The Arizona Corporation Commission has taken an important step in reforming the state’s net metering policy.” Brandt argued regulators made at important and unprecedented decision when they “determined that net metering creates a cost shift."
“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, SVP for customers and regulation at APS.
Rhone Rhesch, CEO of the Solar Energy Industries Association (SEIA), a solar trade organization, noted he was "deeply troubled by today's precedent-setting action."
"They're popping champagne corks over there," said Ken Johnson, VP of communications for SEIA.
So APS won the Arizona solar showdown? Well, not so fast.
Despite setting an unprecedented grid-connect fee, regulators essentially deferred making any meaningful decision about net metering. "Having determined that a problem exists," Brandt noted, "we would have preferred for the ACC to fix it."
But regulators on the ACC suggested that the cost shift would be better evaluated through the general rate-making process. "The commissioners were very clear that more analysis needs to be done to address the true cost and benefits of solar," said Annie Lappé, policy director at the Vote Solar Initiative. In fact, she said, "we see this as a resounding victory for customer choice and solar rights."
And she's not alone. Some of the same solar proponents "deeply troubled" by the decision also applauded it.
"In the short run it's a victory for solar," said Rhesch. "It keeps the solar industry growing in Arizona, so it's considered a victory there.”
"APS launched an unprecedented multimillion-dollar campaign to destroy the Arizona rooftop solar industry and failed. The legacy of the Arizona net metering battle [is] a major loss for APS and its allies," said Bryan Miller, president of The Alliance for Solar Choice (TASC), a pro-solar lobbying group, and VP of policy for Sunrun, a residential rooftop solar installer. "Every utility across the country who wants to stop net metering is going to take note that APS lost despite spending millions and pulling out all the stops."
So what does the verdict in Arizona really mean? The truth is not much. While regulators did set a precedent, the most important decision they made was to not make a meaningful decision on net metering.
"Politics is a give-and-take process," said Miller. "Nobody gets what they want."