• Know Your Rights

    Arizona law protects individual homeowners’ private property rights to solar access by dissolving any local covenant, restriction or condition attached to a property deed that restricts the use of solar energy. This law sustained a legal challenge in 2000. A Maricopa County Superior Court judge ruled in favor of homeowners in a lawsuit filed by their homeowners association seeking to Read more
  • Agua Caliente PV Power Plant Among World’s Largest

    The Agua Caliente solar farm near Yuma features First Solar’s thin-film cadmium-telluride (CdTe) solar modules. Located 65 miles east of the city of Yuma, Arizona, this plant is one of the world’s largest operational PV power plants with 290MW (AC) connected to the electricity grid. Read more
  • Solar Hot Water

    There are two types of solar water heating systems: active, which have circulating pumps and controls, and passive, which don't. The typical solar water heater is comprised of solar collectors and a well-insulated storage tank. The solar collector is a network of pipes that gathers the sun's energy, transforms its radiation into heat, and then transfers that heat to either Read more
  • Federal Residential Renewable Energy Tax Credit

    (Information provided by DSIRE - Last reviewed 02/19/2009) Incentive Type: Personal Tax Credit State: Federal Eligible Renewable/Other Technologies: Solar Water Heat, Photovoltaics, Wind, Fuel Cells, Geothermal Heat Pumps, Other Solar Electric Technologies Applicable Sectors: Residential Amount: 30% Maximum Incentive: Solar-electric systems placed in service before 2009: $2,000Solar-electric systems placed in service after 2008: no maximumSolar water heaters placed in service before Read more
  • Solar Building Design in Arizona

    The idea of using the sun to meet the energy needs in our buildings has been with us since the time of the Greeks, with some of the design manifestations even evident in the prehistoric structures of Arizona and the Southwest. There is a great historic tradition for Arizona buildings that utilize our most abundant resource, and the current increases Read more
  • How Not to- Battery Connections

    Photo shows the situation after a battery discharge test at 300 amps was terminated on a 1530 AH IBE battery string when one post melted. During the discharge test all cell voltages are logged. The sum of the cell voltages was 2.73 volts lower than the 48-volt string voltage. This is an average of 118 mv per inter-cell connection, 5-10 Read more
  • 1 Know Your Rights
  • 2 Agua Caliente PV Power Plant Among World’s Largest
  • 3 Solar Hot Water
  • 4 Federal Residential Renewable Energy Tax Credit
  • 5 Solar Building Design in Arizona
  • 6 How Not to- Battery Connections

Blogs

  1. Solar Center Blog
  2. Guest Blogs
Jim Arwood
28 December 2016

“A lie gets halfway around the world before the truth has a chance to get its pants on.”  --Winston Churchill

Jim Arwood
24 November 2016

The future is not what it used to be.

In the 1990s, the push for electric vehicles gained momentum in response to national security concerns over our reliance on imported fuels and tailpipe emissions.


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Some things to pay attention to in Arizona

REST Workshop Canceled 

The REST workshop scheduled for this Wednesday (6/7/17) at 10am has been canceled. No future date has been set at this time.  CANCELED - June 7, 2017, 10am: Special Open Meeting/Workshop - REST Review Workshop - Hearing Room One, 1200 W. Washington, Phoenix, AZ, 85007, Docket No. E-00000Q-16-0289

Transaction Privilege Tax (TPT) Changes Affect Solar Business and Customers

AriSEIA reported this past November that the TPT exemption covering the installation of solar energy systems would expire at the end of the year with new regulations going into effect on January 1, 2017. A bill was introduced in the last session of the Arizona Legislature to make the exception permanent, but it did not receive a hearing. Since there was no bill passed to extend the exemption, the new regulations are in effect.  Below is the notice TEP sent to its contractors:

The First Regular Session of the 53rd Arizona Legislature adjourned last week and we wanted to make you aware of an important change that may affect your tax liability as a solar contractor. As of January 1, 2017, the gross proceeds of sales or gross income derived from a contract to provide and install a solar energy device are now taxable under the State of Arizona’s transaction privilege tax statute (see Arizona Revised Statutes Section 42-5075.B.13). An exemption for this activity had been enacted in 1996 with a sunset date of January 1, 2017. A legislator in UES’ service territory, Senator Sonny Borelli (R - Lake Havasu City), had introduced legislation that would have eliminated the sunset date and made the tax exemption permanent. However, the bill did not receive a hearing and this exemption is no longer effective as of January 1, 2017. Additionally, a policy rider effecting the exemption was not included in the budget signed by Governor Ducey.

From December 31, 1996 and up to January 1, 2017, the gross proceeds of sales or gross income derived from a contract to provide and install a solar energy device (commonly called Sales Tax in Arizona) were exempt.  It appears that this is no longer the situation and sales of solar devices may be subject to sales tax (TPT).  Thank your legislators.

Editorial Note:  A review of the Arizona Revised Statutes http://www.azleg.gov/arstitle/ Title 42-5061 (M) on 6-6-2017 indicates "M. There shall be deducted from the tax base the amount received from sales of solar energy devices.....".  Apparently only contracting is affected by the above TPT change.  Watch this space for updates as the Arizona solar industry researches this subject.

Public Meetings:

General News feed

Caution- News leads open in new windows. Warning- These news links are automatically generated by others such as Google News and are not reviewed by the Arizona Solar Center, Inc. We are not responsible for link content.

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azsolarcenter "A lie gets halfway around the world before the truth has a chance to get its pants on.” --Winston... https://t.co/YZUiXLzsKz
azsolarcenter The Sun Day Blog: The future is not what it used to be. In the aftermath of the 2016 election, the question has... https://t.co/lSR5RFewJm
azsolarcenter Novermber 5, 2016 -- APS, pro-solar group together spend $6 million on Arizona Corporation Commission races: The... https://t.co/5xyq4EsoFm
azsolarcenter November 3, 2016 Solar Battles Playing Out On Arizona Ballot This Election: It may not be at the top of the... https://t.co/uYSRxv97YR
azsolarcenter November 4, 2016: Utility spends $3.5 million to keep Arizona Corporation Commission all-GOP: The state’s largest... https://t.co/imqk6z2sDU
azsolarcenter October 25, 2016: 42 States (and DC) try to screw with solar The 50 States of Solar Policy Report by the NC... https://t.co/JBYTzpf2ui
azsolarcenter October 24, 2016 -- Future of independent solar energy at stake in Corporation Commission raceL The long-term... https://t.co/D6jy4I5Ci0
azsolarcenter October 13, 2016 -- State policy matters: It is very easy to get distracted by the dog-and-pony show of this... https://t.co/MH7mEMg9MC
azsolarcenter October 16, 2016: Arizona Corporation Commission DebateL Five candidates running for three open seats on the... https://t.co/tm0XLl6CqG
azsolarcenter My Sun Day blog is posted to the Arizona Solar Center. https://t.co/vRrxwSSQpw
azsolarcenter There is No Plan(et) B: Climate change is no longer an issue that our politicians can kick down the road for... https://t.co/KHZzajZc9K
azsolarcenter High Noon: Nearly 40 years ago, President Carter proclaimed the dawn of the solar age. If President Carter was... https://t.co/JmZSHlmBUI
azsolarcenter High Noon: Nearly 40 years ago, President Carter proclaimed the dawn of the solar age. If President Carter was... https://t.co/rBgkaWKDs6
azsolarcenter High Noon: Nearly 40 years ago, President Carter proclaimed the dawn of the solar age. If President Carter was... https://t.co/RzXaQACpPR
azsolarcenter High Noon: Nearly 40 years ago, President Carter proclaimed the dawn of the solar age. If President Carter was... https://t.co/t1fKNTPwIB
azsolarcenter High Noon: Nearly 40 years ago, President Carter proclaimed the dawn of the solar age. If President Carter was... https://t.co/dWEKk3QR6H
azsolarcenter High Noon: Nearly 40 years ago, President Carter proclaimed the dawn of the solar age. If President Carter was... https://t.co/y4vhOpjfh1
azsolarcenter September 29, 2016: To cover a utility's fixed costs, are demand charges or time-of-use (TOU) rates superior?... https://t.co/RgneQWNKyM
azsolarcenter September 25, 2016: Arizona Public Service not only rejected an Arizona Corporation commissioner’s request to... https://t.co/iip6RwoOOS
azsolarcenter September 22, 2016: The Salt River Project (SRP) board of directors has agreed to purchase energy produced by... https://t.co/xYegEuiI43
azsolarcenter September 18, 2016: UniSource Energy officials have shelved plans to use of land surroundingMohave Community... https://t.co/eXmHxo03wQ
azsolarcenter September 13, 2016: The city of Sedona spent about 90 minutes at its September 13 council meeting discussing... https://t.co/LHV2QcsvYt
azsolarcenter September 15, 2016: New solar research projects at Arizona State University will receive $3.75 million in funding... https://t.co/N20NYLWxGy
azsolarcenter September 25, 2016: The parable of the frog and boiling water is hundreds of years old. It has been used... https://t.co/O5PYqvxIJg

Utility Solar issues in Arizona

  

Updated December 2016

Electric utilities in Arizona are involved in solar energy in many ways.  Utilities own or contract to purchase energy from large solar installations, both photovoltaic (PV) and thermal and distribute this energy to their customers.  The utilities are also involved with their customers when customer utility interactive photovoltaic systems are connected to the utility grid in order to safely operate their systems and account to the energy transfers.  Utilities call these smaller systems Distributed Generation (DG).  Some utilities have rebate programs or other incentives to encourage solar hot water systems because these systems reduce the peak demands placed on the utilities.

The economies of scale favor large utility-scale solar systems such as illustrated on the left above, these systems can produce energy for about 60% of the cost of rooftop systems, but the energy must be transported to the areas where it is needed, requiring transmission lines, transformers, and such.  About 10% of the energy is lost due to these transmission losses.

The utilities have to manage all the various electrical generation sources to balance the supply of energy with the customer use of energy, while keeping the voltage and frequency of the power within accepted limits.  Since both solar generation and customer needs vary, this has become more difficult as the percentage of solar generated energy is increasing.  Some of the generation resources, such as nuclear power plants, need to operate at constant power levels, while other sources such as natural gas turbines are designed to be variable.  Photovoltaic power systems can be shut off without damage if necessary to help keep energy balanced within the utility system.

When a connected PV system, residence, business, school, etc., is generating more energy than can be used locally, the extra energy is fed back into the utility grid where it is used by other utility customers.  The amount of solar generated energy thus fed back is metered by the utility.

The utilities account for this energy several methods.  Most popular for the customers is Net Metering wherein the utility acts like a free battery, allowing a customer to later use an equivalent amount of energy for free.  Another option is Net Billing wherein the utility basically purchases all the excess energy at a wholesale rate and sells all energy purchased by the customer at retail rates.  The rates are set/approved by the Arizona Corporation Commission (ACC) (SRP is an exception since it is not an investor owned utility).  Generally, at present net metering is limited to systems that have an output that is 125% of less than the historic power demand of the customer.

The relationship between solar customers and the utilities is changing, see other articles on our website and watch the Blog for current news. On December 20, 2016 the ACC voted to allow utilities to abolish net metering and replacing it with a buy-back rate that will be set by rate hearings.  There is a provision for grandfathering existing solar customers already on net metering. DECISION on: INVESTIGATION OF VALUE AND COST OF DISTRIBUTED GENERATION.  The Determinations, starting on page 169, are not very conducive to residential and commercial future photovoltaic systems.

The US electric grid continued to transform in 2016. No new coal plants were added, and solar became the top new source of generating capacity.

SEIA's Principles for the Evolution of Net Energy Metering and Rate Design

SEIA, AriSEIA, five other SEIA state affiliates, and 10 other organizations including Vote Solar have agreed upon general principles on how Net Energy Metering (NEM) and rate design should be implemented. The announcement was made on May 31, 2017. We present those principles below. The document provides a consensus view of solar advocates for regulators and stakeholders considering rate design and compensation for distributed solar generation, including potential alternatives to net energy metering.  Traditional net energy metering (NEM) is fundamentally a bill credit that represents the full retail value of distributed electricity delivered to the distribution system, and has been a critical policy for valuing and enabling distributed generation.  As penetration of solar and other distributed energy resources increases, states and utilities have begun to examine, and in some cases implement, alternative rate and compensation mechanisms.  The principles below are intended to be consistent with the imperative of public utility commissions and energy service providers to maintain reliable, cost-effective service to all customers while protecting the rights of customers to generate their own energy in a manner that provides both system and public benefits, including environmental protection and economic development.  They provide high level criteria for the conditions under which states may wish to consider alternatives to NEM, and high level principles for what distributed solar compensation mechanisms should look like where alternatives to NEM are appropriately considered. 

Specifically the paper is organized into four sections:

  • Basic principles, foundational to considerations for considering rate design and compensation for distributed solar generation.
  • Criteria and Conditions for the Consideration of Alternatives to Net Energy Metering
  • Guiding Principles for Solar Rate Design, and
  • Guiding principles for Alternative Compensation

Basic Principles[1]

  • Customers have a right to reduce their consumption of grid-supplied electricity with energy efficiency, demand response, storage, or clean distributed generation.  Thus, a customer should always receive the full retail price value for behind the meter choices that reduce grid-supplied energy consumption, whether installing energy efficiency measures, or consuming on-site generation.
  • Solar rate design and compensation mechanisms should support customer economics to invest in solar that are sustainable, consistent with the full stream of values provided by the system, and fair to all stakeholders.
  • Net energy metering is a proven mechanism for driving solar deployment, liked and understood by customers, and is preferred in most circumstances.
  • Most studies have shown that the benefits of distributed solar generation equal or exceed costs to the utility or other customers where penetration is low.  Assertions that current or future solar customers have shifted or will shift costs to others, and/or create new costs, must be demonstrated with valid, transparent data that reflects the values, avoided utility costs, and results of deploying solar at the distribution level, as well as the utility cost of providing service.
    • A cost of service study that fails to consider the benefits of distributed solar generation (DSG) cannot establish a cost-shift.
    • Regulators should require an independent cost-benefit analysis before considering substantial rate design or compensation changes based on cost-shift assertions.
    • The benefits of existing distributed solar should be recognized when considering any asserted cost shift.
    • The time frame for review of costs and benefits must be on par with the life of the particular type of Distributed Energy Resources (DER) assets, e.g. 20-30 years, and be forward looking, not a snapshot of one year of sunk costs as is typical in a general rate case (GRC).
    • Regulators should seek to ensure in GRC, Integrated Resource Plans (IRP) and other relevant proceedings that future avoided costs found in cost/benefit studies related to DSG and other DER are actually avoided (e.g. the canceled PG&E transmission projects saving $200 million and the Brooklyn-Queens Demand Management project avoiding costly upgrades).
    • Since some level of quantifiable cross-subsidization is inherent in all rate design, particularly for large diverse classes, an independent finding of a material cost shift should be required before regulators authorize substantial changes to rates or rate design.
  • Net metering can be accomplished through simple energy netting, or in combination with monetary compensation depending on the rate design:
    • For non-time differentiated residential and small commercial rates, i.e. rates based on energy consumed at any time, energy netting on a kWh basis over the billing period is good policy particularly at low to moderate penetration levels, and pending demonstration of a material impact.
    • For time-differentiated rates, monetary compensation is an accepted feature of some current NEM structures and may be necessary to preserve the full value of excess energy.
  • Opportunities for retail customers and third party DSG and other DER developers to provide additional services (e.g. voltage & frequency regulation, VAR support) should be encouraged, especially in States moving towards a service oriented utility/regulatory model, though access to markets, and appropriate compensation mechanisms.
  • Consideration of creating separate rate classes for customers that choose to utilize DER technologies must be based upon a factual demonstration of significantly different load and cost characteristics using publicly available actual data, and should generally be discouraged as potentially discriminatory.

Criteria and Conditions for the Consideration of Alternatives to Net Energy Metering

  • Penetration level should be the leading threshold criteria for consideration of alternatives to NEM.
  • Customers who installed solar under net metering should be grandfathered for a reasonable period of time. Customers have a reasonable expectation that rate structures (as opposed to rates themselves) will not change dramatically.  Gradualism is an important rate design principle, and a gradual phase-in to any new compensation methodology should be provided at the end of the grandfathering period.
  • Process: Early, i.e. pre-litigation, data collection and analysis under the guidance of the State Commission can provide opportunities for collaboration toward the development of a factual basis for future changes to rate designs, compensation, and other mechanisms. 
  • Simplicity, Gradualism, and Predictability: The simplicity of the NEM compensation mechanism facilitates customer adoption of distributed solar. Any future design should consider customer needs for simplicity and any changes should be applied gradually and predictably.
  • Shadow billing and voluntary pilot programs to analyze opportunities to increase the benefits that net metered systems provide to the grid, and to assess the actual impacts of proposed changes (for example, time-of-use (TOU) pilot programs) should be considered before making substantial mandatory changes to compensation or rate design. 
  • Hold harmless policies should be in place for low-to-moderate income (LMI) customers.
  • NEM imports & exports are generally netted monthly in most states, and trued up annually.  More granular netting generally reduces solar customer economics, but may be worthy of consideration when penetration levels increase, or in conjunction with deployment of other DERs such as storage.

Guiding Principles for Solar Rate Design

  • Rate design should seek to send clear price signals to customers that encourage sustainable, cost-effective investments in solar and complementary technologies.
  • Rate designs should not create barriers to the deployment of distributed solar generation or DER technologies other than solar.
  • Rate designs that provide greater incentives for DER technology deployment (e.g. more steeply inverted block rates) can be considered to encourage early adoption of efficiency, distributed generation and storage technologies.
  • Rate designs that emphasize temporal cost-causation (time-varying, critical peak pricing and critical peak rebates) are generally consistent with solar deployment, and may be quite beneficial to customer and system alike when solar is integrated with DERs like storage or demand response.
  • Rate designs that emphasize higher fixed (e.g. customer, service and facility or basic service) charges than necessary for recovery of strictly customer-related costs like service drop, billing, and metering, or quasi-fixed (e.g. mandatory residential demand) charges do not reflect cost causation, disproportionately impact low and moderate income customers, and should be discouraged.
  • Regulatory review of rate design alternatives should consider impacts on low-income customers; e.g. utility fixed or quasi-fixed charge proposals usually put solar and efficiency technologies further out of reach of LMI customers.
  • Any consideration of standby, backup or other supplemental charges for solar customers must (1) be consistent with PURPA requirements, (2) be based upon a customer’s ability to control self-generation similar to a conventional fossil resource (e.g. diesel or natural gas), and (3) reflect the probability of customer generation unavailability in the development of any rates.

Guiding principles for Alternative Compensation

A fair value of solar (or “stacked benefit”) compensation rate can be considered for distributed solar generation exports, at higher penetration levels. Such value should be determined taking into account both short term and long term (life of system) benefits of distributed solar generation. Buy all/Sell all (BA/SA or “VOST”) compensation approaches should be at the option of the retail customer, i.e. VOST should not be the only customer option.  Critical considerations impacting system economics and the ability to finance include the frequency and effect of future changes to the value proposition.  In addition, consideration must be given to the effect on customers of the lack of energy hedging (customer-generated solar energy does not offset the customer’s utility-supplied energy). Alternative Compensation methods should take into account the efficacy of integrating solar with other forms of DER (e.g. storage) in the grid of the future, assuring that barriers to new technologies are not created. Solar specific surcharges such as installed capacity fees are discriminatory, generally unsupported by facts, and impede distributed solar generation system economics. [1] The Criteria and Principles herein do not distinguish between regulated and restructured states. However, rate designs, cost allocation methods, avoided costs and cost/benefit analyses must recognize whether the utility is distribution-only or vertically integrated. Download a copy of the PDF here.                        

What Home Owners Need To Know About Battery Storage Systems

Since the sun does not shine at night we need a way to store daytime-generated solar energy. Net metering is an elegant and 100% efficient way to shift excess solar power, but that system will not work at high solar penetration levels. Never mind the fact that utilities are loath to allow their customers to generate electricity for less than it costs them to deliver this power. 

As a result, battery storage is on the minds of almost all new solar customers. Storage technology, incentives, favorable electric rates and control software are all evolving rapidly. There are currently about a dozen companies with battery storage systems designed for use with rooftop solar. Like peanut butter and chocolate, many solar companies are starting to offer battery storage systems along with their solar systems.

My advice is to proceed with caution. Even though off-grid battery storage systems have been available for years, we are at the very early stages of grid-tied solar combined with battery storage. From a hardware standpoint, battery storage costs are plummeting, and new inverters/charge controllers are being developed. Perhaps more importantly, software that will efficiently interact with solar, batteries, the grid and your home energy consumption still has limited functionality. For more about the practicalities of home battery storage, Listen Up to this week’s Energy Show on Renewable Energy World.

Barry Cinnamon http://www.renewableenergyworld.com/articles/2017/05/what-home-owners-need-to-know-about-battery-storage-systems.html

About

  • Welcome to the Arizona Solar Center

     This is your source for solar and renewable energy information in Arizona. Explore various technologies, including photovoltaics, solar water heating, solar architecture, solar cooking and wind power. Keep up to date on the latest industry news. Follow relevant lectures, expositions and tours. Whether you are a homeowner looking to become more energy efficient, a student learning the science behind the technologies or an industry professional, you will find valuable information here.
  • About The Arizona Solar Center

    Arizona Solar Center Mission- The mission of the Arizona Solar Center is to enhance the utilization of renewable energy, educate Arizona's residents on solar technology developments, support commerce and industry in the development of solar and other sustainable technologies and coordinate these efforts throughout the state of Arizona. About the Arizona Solar Center- The Arizona Solar Center (AzSC) provides a broad-based understanding of solar energy, especially as it pertains to Arizona. Registered Read More
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