December 28, 2014

Solar Friendly Arizona Utility Enters the Residential Solar Market.

by Bruce Mulliken, Green Energy News

Traditional electric utilities have certainly been watching the nationwide growth of independent solar installation and leasing companies. Business is business. Why shouldn't your local utility join in the residential solar game?

While these independent solar companies may object, and unless there are regulations saying they can't, there's no reason why electric utility companies can't be in the home solar business.

It actually makes business sense for some, perhaps many, to do so.

Unless regulating agencies say otherwise, utilities no longer need to build, and invest in, large-scale power plants to meet future demand. Provided there's no shortage of electricity on their grids, adding capacity as needed is good enough. It's why adding solar power – no matter how small – is a perfect choice for many utilities. A few megawatts here, a few kilowatts there, it all adds up in total grid capacity as quickly as it's installed. A home system can be added in as little as a few days, larger systems need only a few months. Huge power plants, on the other hand, may take years to build. Perhaps thousands of residential solar systems can be built in the time in takes to build one, large base-load power plant.

Utilities already have access to homes through electric meters. They know their customers. They know their customers' electricity needs. They know their service territory. They even know all about the weather and climate they operate in. They know what's best for their business and their customers. If solar is good business and meets the needs of customers, then why not?

Utilities have strong, in-place marketing tools with which to market residential solar systems: Extensive mailing lists known as their existing customers, which can range from hundreds of thousands of rate payers to millions. And, of course, they have a regular, nearly no-cost advertising channel known as the monthly utility bill. They don't have to search for sales leads: They're already banked in company computers.

One utility that has been on the forefront of solar power is Tucson, Arizona-based Tucson Electric Power (TEP). It's no surprise that the utility with more than 400,000 ratepayers has now stepped into the residential solar business.

From a company press release:

Tucson Electric Power (TEP) has received regulatory approval for a plan to install rooftop solar panels at customers’ homes and provide their electric service for a set monthly fee that would remain fixed for up to 25 years.

TEP’s Residential Solar Program, approved by the Arizona Corporation Commission (ACC), will let customers go solar with no installation or maintenance costs. After paying a $250 administrative fee, participants will pay a fixed monthly electric rate that roughly matches their current average bills, generating significant savings if TEP’s rates or energy costs increase in the future.

“This innovative program will expand the availability of solar power across our community at a stable, affordable price without compromising the reliability of our electric system,” said Philip J. Dion, TEP’s Senior Vice President of Public Policy and Customer Solutions.

The first-of-its-kind program will be made available next spring to 500-600 customers in 2015. The company will seek participants in areas where TEP’s solar arrays would maximize benefits for the local electric grid that serves all customers. System size requirements, proximity to the grid and opportunities to integrate advanced inverter technologies will be considered. TEP will also look for sites where solar panels can be positioned to maximize output that more closely coincides with peak demand.

TEP will partner with local solar companies to install and maintain the systems, contributing to Arizona’s growing green energy economy. By installing the most cost-effective, reliable rooftop solar systems possible, the program will provide superior community and customer benefits.

ACC Staff, the state’s Residential Utility Consumer Office (RUCO), environmental advocates and local solar installers filed comments with the ACC in favor of the proposal. It was opposed by out-of-state solar lease providers who, in seeking to block the program, would have limited the market for rooftop solar power systems in Tucson.

“Our program will provide additional customer choice and new green energy options for our customers,” Dion said. “Participation will not be limited by customers’ FICO credit scores, which opens the program to many Tucson residents who do not qualify for private solar leases.”

“TEP’s Residential Solar Program offers participants a unique opportunity to acquire rooftop solar in a way that enhances the reliability of the electric system, while giving the customer the flexibility and price protection they want,” said Carmine Tilghman, Senior Director of Wholesale, Fuels and Renewable Resources for TEP. “Unlike other consumer options, this program is not subject to automatic, annual price increases or unnecessary restrictive provisions. It also provides greater consumer protections under the ACC’s oversight.”

The fixed monthly fee paid by program participants will be based on their average historic energy usage. TEP will not change the fee unless customers’ average annual usage changes by more than 15 percent after joining the program. The ACC could change the fee in the future, but participating customers could choose to withdraw from the program at that time if the new fee is applied to them. Otherwise, the fee would remain in place for the 25-year expected life of the solar power system.

“This new program offers a sustainable way to expand our community’s renewable energy resources while significantly minimizing the cost shift to other customers, supporting local solar installers and bolstering our system to support the safety, reliability and affordability of our local electric service,” Dion said. “TEP has been serving this community for more than a century, and this program is just part of how we plan to meet our customers evolving energy needs for another century to come.”

 

Tucson Electric Power (TEP)

 

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