July 17, 2013
As more people install solar on their homes, it becomes increasingly important that everyone who uses the grid helps cover the cost of keeping it operating at all times.
Under current rules, rooftop solar customers benefit from a reliable grid, but essentially avoid paying for their use of it. Non-solar customers pay more to pick up this cost.
So APS, after six months of public discussions with the solar industry, has proposed a couple of options to the Arizona Corporation Commission.
One option included in the proposal to solve the net metering issue is called the Net Metering option. (View the post on the second option here.)
This option would address the compensation problem by ensuring future rooftop solar customers pay their fair share for the grid while still benefiting from the energy their rooftop solar systems provide.
By analogy, if you’re building a new highway that will be heavily used during rush hour, you need to build several lanes, even if that means at times some lanes are empty. Otherwise, the highway couldn’t handle the cars when heavy traffic demanded it.
Electricity, especially with rooftop solar customers, is similar. Sometimes you don’t use a lot, but at other times it’s like rush hour. APS always must have the grid ready to serve that “rush hour” amount whenever the demand is there.
So the net metering option proposes that new residential rooftop solar customers (remember: existing solar customers would be grandfathered) go on a rate plan in which they pay a charge based in part on the amount of energy they use during “rush hour” – their highest point of demand for the month.
This ensures that solar customers pay a fair share of the grid costs, and still gives them the ability to manage their bills by controlling how much electricity they use. This is an existing rate plan, currently used by about 10 percent of APS customers.
Other customer bill charges would be based on the total usage in a month, as most are now. Under this option, “net metering” would continue. That is, the amount of solar energy generated is subtracted from the amount of electricity used and the customer pays based on the difference (or net).
This way, solar customers can still offset many charges and lower their bills with rooftop solar.
And, as a whole, solar can remain viable in Arizona for years to come.
View fact sheet on option 1 (PDF).