SRP (Arizona POCO) hits solar customers with $50/month fee. APS next?

[HX_Guy]

Talk about trying to kill the industry. If this starts to be common, won't homeowners look more and more at going off grid? Instead of paying $50+ per month in addition to whatever the bill as before, I'd rather use that money toward a long term, low interest loan on batteries.

SRP passes new solar rate structure; solar groups threaten lawsuit

Following an extensive three-month public process, Salt River Project's board of directors Thursday approved a general rate hike as well as controversial changes to the utility's solar rate structure.

For all SRP customers, the board approved a 3.3 percent hike for one year starting this April. Then another 3.9 percent increase will take effect beginning April 2016.

Beginning with the April 2015 billing cycle, the monthly bill for a typical residential customer will increase by about $3.85 until April 2016, when that figure will then average $4.60.

The board also approved a new price plan for residential customers who, after Dec. 8, 2014, add rooftop solar systems.

Management had proposed that existing solar customers be "grandfathered" from moving to the new price plan for a period of 10 years, but the board extended that by up to 20 years for SRP customers who installed rooftop solar units to run from the time the system was installed. The Board also voted to allow unlimited transfer of the grandfathering with the sale of the home for all rooftop solar customers. during that 20-year period.

The new self-generation price plan includes increased charges to better recover fixed costs related to the solar customer's service facilities and their use of the grid, but also reduces the price the customer pays per kilowatt hour for energy.

SRP District 7 board member Keith Woods said that the approved increases were a "splitting of the baby" between the proposal from SRP management and the objections of solar industry representatives.

"It was a difficult decision," said Woods. "We have discussed this for months and there has been significant public comment. We believe this is a fair decision."

The measure to approve the grandfathering provisions protecting leased and owned solar facility contracts passed 12-2. The overall rate structure passed 11-3. The SRP board president only votes in case of ties.

Solar industry representatives threatened litigation if the new rates passed.

Boies, Schiller & Flexner LLP was retained to handle legal matters. The firm does not have a Phoenix office, but they have an office in the Bay Area, which is home to Solar City, one of the more vocal opponents of the rate hike.

http://www.bizjournals.com/phoenix/news/2015/02/27/srp-passes-new-solar-rate-structure-solar-groups.html?page=all

[J.P.M.]

Or, it might serve as further impetus for more battery research. If I was running a POCO, I'd sure think about maybe getting out in front of that one - not like the opportunity they missed with solar - if not to own the equipment, then to own and repress the technology.

[SunEagle]

Or, it might serve as further impetus for more battery research. If I was running a POCO, I'd sure think about maybe getting out in front of that one - not like the opportunity they missed with solar - if not to own the equipment, then to own and repress the technology.

They are already working on testing grid scale systems. I have read a lot of them experimenting with large scale energy storage using different types of chemistry including LiFe. These things look like 5th wheel trailers that are placed next to a main switch yard. The size comes down to how long does this "UPS" has to work to keep the grid in that area stable.

It is going to be a long time before a homeowner can justify and pay for a battery system even if they are charged $50 / month. The POCO will just find a way to get more money from their customers to cover cost of batteries.

[Sunking]

If this starts to be common, won't homeowners look more and more at going off grid?

You are joking right? Who in their right frickin mind would volunteer to go from paying the POCO 10-cents per Kwh to paying $1 per Kwh.

The POCO's are just exposing what is really going on. They are incurring cost from solar subsidies they are forced to give, and then allowed to pass those cost to rate payers in the form of higher electric rates as a hidden tax. Basically Solar is Welfare for the wealthy being paid for by rate payer. The POCO's think it is unfair to pass those cost onto people who cannot afford to take part in the Welfare. They think wealthy Solar users should be paying the cost, not their neighbors.

[J.P.M.]

I wonder how this will impact the price of new leases ?

[SunEagle]

I wonder how this will impact the price of new leases ?

Most leases include and estimated kWh increase cost over the contract term which is usually inflated to make the contract look good. With the new POCO fees being added that inflated cost/kWh might actually start to be true.

[Sunking]

I wonder how this will impact the price of new leases ?

One thing you can be certain of. Price has no where to go but UP

[Ian S]

I wonder how this will impact the price of new leases ?

IMHO, the leasing model is on life support in Arizona and pretty much dead in SRP territory. Don't forget, the state treasury department has decided to extend a property tax to leased systems to the tune of another couple hundred $$ a year. Imagine that, a state government to whom taxes are anathema has finally found a tax to love! Technically, that tax is charged to the lessor but all leases I'm aware of provide for such taxes to be passed onto the lessee.

APS bought the newly elected members of the Corporation Commission so that body will be gleefully tripping over itself to institute similar $50/mo fees on APS and Tucson Electric solar customers. Add in the likelihood of interest rate increases over the next year or so and I expect all solar financing not just leasing will look unattractive by 2016. I just learned a homeowner in my HOA has gone with a lease but hopefully, they'll be grandfathered. Unfortunately, they are clueless on solar and have trusted the solar salesman to have their best interests in mind. SMH.

[Sunking]

Unfortunately, they are clueless on solar and have trusted the solar salesman to have their best interests in mind. SMH.

Well Duh Ian, very few salesman or companies has the customers best interest at heart. Only ones that come to mind are Real Estate Agents and Auction companies working for the Seller. All salesman and businesses are in business to make as much money as they can possibly make. Solar contractors days are numbered and the party is over end of December 2016. After that they are out of business. So their goal right now is to rape the public and government out of as much money as they can before they close shop and retire wealthy sitting on the beach.

[J.P.M.]

IMHO, the leasing model is on life support in Arizona and pretty much dead in SRP territory. Don't forget, the state treasury department has decided to extend a property tax to leased systems to the tune of another couple hundred $$ a year. Imagine that, a state government to whom taxes are anathema has finally found a tax to love! Technically, that tax is charged to the lessor but all leases I'm aware of provide for such taxes to be passed onto the lessee.

APS bought the newly elected members of the Corporation Commission so that body will be gleefully tripping over itself to institute similar $50/mo fees on APS and Tucson Electric solar customers. Add in the likelihood of interest rate increases over the next year or so and I expect all solar financing not just leasing will look unattractive by 2016. I just learned a homeowner in my HOA has gone with a lease but hopefully, they'll be grandfathered. Unfortunately, they are clueless on solar and have trusted the solar salesman to have their best interests in mind. SMH.

Understood. Thank you.
I'm not one to gloat, and I know you and I differ on leasing. While respecting your opinions, I'm of the honest opinion that some of the good, if any, that may come out of the AZ POCO shenanigans might be fewer people opting for leases and get screwed less, if only by their own ignorance.

[SunEagle]

Understood. Thank you.
I'm not one to gloat, and I know you and I differ on leasing. While respecting your opinions, I'm of the honest opinion that some of the good, if any, that may come out of the AZ POCO shenanigans might be fewer people opting for leases and get screwed less, if only by their own ignorance.

There has been a big push in Florida about allowing 3rd parties to sell power to someone besides the Utility. While that may get more solar installed I feel it will lead to Leases which I am not a big fan on.

[Ian S]

Understood. Thank you.
I'm not one to gloat, and I know you and I differ on leasing. While respecting your opinions, I'm of the honest opinion that some of the good, if any, that may come out of the AZ POCO shenanigans might be fewer people opting for leases and get screwed less, if only by their own ignorance.

At this point I would not touch a monthly lease in Arizona and I'd only consider a prepaid - if they still exist - if it made financial sense e.g. if the homeowner couldn't find a way to utilize the tax credits. Even then there's the new tax aspect to consider. But I'm not sure even purchasing makes a lot of sense in SRP territory any more especially if you're doing some kind of financing. Certainly, the payback time has significantly increased and a lot more getting into the weeds on your usage would be required: i.e. would you have a way to limit your demand charge during the late afternoon/early evening timeframe when the demand would be highest and production falling off to zero? I was actually on a combined TOU/Demand rate before going to solar - it actually saved me money - but you really had to be careful of that demand charge. One slip up and you're screwed for the whole month! Most folks would probably have to install demand controllers. The SRP demand charge is especially onerous as it's based on a half hour window not the one hour window I used to have.

[Ian S]

I would also say that depending how the property tax hits me, I may just decide to purchase my system during that 7th year window provided for in my lease. My understanding is that the tax declines with system age so it may be relatively small for me. But then the purchase option is only about $850 so I'm very much undecided at this point.

[Alisobob]

My system is on track to replace my historical SCE bill, aprox $3100 a year.

Say SCE starts charging $50 a month "Solar Fee".. like AZ might.

Thats $600 a year... I'm still ahead $2500.

We are likey exempt , grandfathered in as they say.

But for a newcomer to the game, I dont see it ending solar.

$2500 a year savings is still worthwhile.

[Ian S]

My system is on track to replace my historical SCE bill, aprox $3100 a year.

Say SCE starts charging $50 a month "Solar Fee".. like AZ might.

Thats $600 a year... I'm still ahead $2500.

We are likey exempt , grandfathered in as they say.

But for a newcomer to the game, I dont see it ending solar.

$2500 a year savings is still worthwhile.

Well, yes, a $50 monthly fee might not hurt so much in Cali but bear in mind, electric rates in AZ are far lower to begin with. Before solar, my cost per kWh including taxes was $0.11 averaged over the entire year.