The Straight Story on Solar and APS

This is an opinion piece, but I hope you'll find it informative.

If you're following the APS Solar narrative at all, you'll hear two versions.  The first is from APS, suggesting that solar customers aren't paying their "fair share" and causing other customers to subsidize solar customers.  The second is from solar customers (and companies), complaining that APS is anti-solar and trying to squash green energy to increase their own profits.  So, which is it?

In this writer's opinion, it's neither.  Both sides (backed by a lot of money) are making villains out of the other by playing a little loose with the facts.  Let me explain why I feel that way.

Imagine for a minute that instead of electricity, we were talking about jelly.  Silly, I know, but bear with me.  Imagine that you decided to start making your own jelly rather than buying Smuckers.  You still need a jar to put it in, and you still need to get those jars to and from your house.  As solar customers, people are making their own jelly, but buying the jars from APS and paying APS to deliver them to us.  But it's the customer's jelly, not the company's.  In return, APS gets to slap their label on any jelly that we don't eat and sell it for retail price to people in the neighborhood (even though it cost them nothing to make it).  To compensate, APS gives one-for-one "jelly credits" back to the customers they got it from to be used at any time for free jelly when they run out.  You pay a little for the service, and APS makes a little off the extra jelly.  That's "net metering" in a nutshell.

The problem comes in the way APS has structured their rates and bills.  Almost every fee and factor is based on a percentage of how much electricity you are using.  So, back to jelly.  If how much we paid for the jars was based on a percent of the jelly we buy, rather than, say five cents a unit, then people who make their own are getting a really good deal on jars!

Solar customers pay the same bills traditional customers do, but it's a percentage of what they take from APS, so it's true that solar customers pay a smaller portion of the "grid maintenance" than traditional customers do.  They didn't ask for it; they didn't "work the system".  It's just how APS structures their bills.

How much is this cost shift?  According to APS' testimony in 2015, the cost shift from solar to non-solar customers is 21 cents per person per month.  Not exactly a game-changing figure, is it?

So why did APS offer such a sweet deal to solar customers to begin with?  The short answer: they had to.  Federal requirements from the EPA and others mandated that electric utilities derive a certain percentage of their generating capacity from renewable sources, and a portion of that from rooftop solar.  If you haven't looked into solar, let me assure you, it's expensive! And utility providers knew that they were going to have to make it as attractive as possible if they were going to get enough people to sign up.  Enter: net metering.

And, according to their Demand Side report to the ACC in 2016, they've hit that target.  What's more, they project they will continue to meet or exceed that target for the foreseeable future.  And that means, the need for incentives to grow the business is gone.

Now, why APS hasn't said just that to their customer base is a mystery to me.  Just like year-end close-out sales on cars, "these deals won't last".  Instead, they've chosen to pit segments of customers against each other.  Perhaps they feel like it's an easier sell to regulators to frame it as "doing right" by the majority of customers (rooftop solar customers make up just 3% of APS' business, by the way).

No matter how it is being framed, the facts are simple.  The company has hit its target and is now making solar rates more comparable to traditional, to help cover the costs of all those jelly jars.  Potential solar customers (and, more importantly, solar installation companies) don't like that, because it's less attractive and people are less likely to buy.  But solar customers aren't being victimized; they just aren't being offered deep discounts as an incentive anymore.  There are no bad guys and good guys here; it's just business.