Arizona

Arizona’s net metering policies have undergone significant changes in recent years, leading to variations in compensation rates and program structures among utilities.

Key Utilities and Their Net Metering Policies:

1. Arizona Public Service (APS)
   • Details: APS transitioned from traditional net metering to an Export Rate system. Under this program, customers are credited for excess solar generation at a fixed rate per kilowatt-hour (kWh), which is lower than the retail rate. The export rate is subject to annual adjustments.
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2. Salt River Project (SRP)
   • Details: SRP offers a Customer Generation Price Plan, where customers with solar installations are placed on a demand-based rate plan. Excess generation is credited at an Export Price, which is also below the retail rate and subject to periodic adjustments.
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3. Tucson Electric Power (TEP)
   • Details: TEP utilizes a Net Billing system. Customers receive credits for excess solar energy at an Export Credit Rate, which is less than the retail rate and reviewed annually.
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4. UniSource Energy Services (UES)
   • Details: UES has adopted a Net Billing approach similar to TEP, offering an export credit rate for excess solar generation, which is below the retail rate and subject to annual review.
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Ranking of Utilities Based on Net Metering Benefits:

1. Tucson Electric Power (TEP)
   • Pros: Offers relatively higher export credit rates compared to other utilities in the state.
   • Cons: Export rates are still below retail rates and subject to annual adjustments.
2. UniSource Energy Services (UES)
   • Pros: Provides export credit rates comparable to TEP, with a straightforward net billing process.
   • Cons: Similar to TEP, credits are below retail rates and can change annually.
3. Arizona Public Service (APS)
   • Pros: Has a well-established export rate program with transparent rate-setting mechanisms.
   • Cons: Export rates are lower than those of TEP and UES, reducing the financial benefits for solar customers.
4. Salt River Project (SRP)
   • Pros: Provides a clear customer generation plan with defined export pricing.
   • Cons: Implements demand-based charges, which can be complex and may lead to higher costs for some customers.

State Incentives:

Arizona offers several incentives to promote solar adoption:

• Residential Solar Energy Tax Credit: Provides a credit of 25% of the cost of the system, up to $1,000, against state income taxes.
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• Solar Equipment Sales Tax Exemption: Exempts the sale of solar energy equipment from state sales tax.
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Permitting and Interconnection Processes:

• Arizona Public Service (APS):
  • Process: Requires submission of an interconnection application, system design documents, and a signed interconnection agreement.
  • Timeline: Typically 20-30 business days for approval.
  • Challenges: Potential delays due to high application volumes; thoroughness in documentation can mitigate issues.
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• Salt River Project (SRP):
  • Process: Involves an online application, system review, and inspection before interconnection approval.
  • Timeline: Approximately 30 days from application to approval.
  • Challenges: Demand-based rate plans require careful consideration of system sizing to optimize benefits.
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• Tucson Electric Power (TEP):
  • Process: Submission of an interconnection application, system specifications, and a signed agreement.
  • Timeline: Around 20 business days for processing.
  • Challenges: Annual adjustments to export credit rates necessitate staying informed to assess financial returns accurately.
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• UniSource Energy Services (UES):
  • Process: Similar to TEP, requiring an application, system details, and agreement.
  • Timeline: Approximately 20 business days.
  • Challenges: Monitoring export credit rate changes is essential for financial planning.
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