Arizona Public Service's new solar lease: More than meets the eye

The utility that first made headlines in the "war on solar" now wants to jump into the industry. 

Arizona Public Service first proposed monthly fees of $50 a month for customers that have solar systems. That charge ended up at about $5 a month, depending on the customer's solar system size, setting up a domino of similar utility efforts across the United States.

Now APS is asking regulators for permission to add a new form of solar leasing to their services. It wants to own and install solar systems on customer rooftops — at no cost to the customer. In exchange for the electricity, customers would get a monthly $30 credit on their electric bill for 20 years. 

APS wants to install 20 megawatts of residential solar on about 3,000 homes next year. It would choose locations where peak power is needed most and control power flows remotely. 

All customers then would benefit from a more efficient grid panels are placed where they're needed most and controlling power flows remotely, APS said. And all would be charged (not only homes with solar) for the $57 million to $70 million that it costs for the installations — plus a guaranteed profit.

However, this reverses APS's argument for charging monthly fees to people with solar systems. Essentially, the company doesn't pay for the costs of grid maintenance, leaving homeowners with solar power to hold the bag. That line of reasoning leaves out the fact that more solar power stabilizes the grid — benefiting everyone — and saves the utility the money from not needing to build more power plants.

Under this new revenue plan, will APS still charge solar customers that $5 a month fee? Its new idea charges all ratepayers and frees APS from making net-metering payments for systems they have installed.

"The irony here is that APS has spent two years complaining about how terrible solar is, how it's a massive problem for the grid," Will Craven of the Alliance for Solar Choice, told Bloomberg. "We welcome competition but there's nothing fair or equal about a utility being allowed to rate-base solar with a guaranteed rate of return."

"This is a massive expansion of the monopoly into an area that is well served by the free market," said local solar installer Corey Garrison, CEO of Southface Solar Electric. 

Behind the scenes

The American Legislative Exchange Council is behind utilities' war on solar. This year, state-by-state, many utilities have suddenly turned against solar — pushing to eliminate net-metering, slap extra charges on people that have solar systems, and the holy grail — and gutting or eliminating Renewable Portfolio Standards. 

Although plenty of ALEC's oil-soaked members favor much of these moves, it turns out that Edison Electric Institute — trade association for the U.S. utility industry — is funding this particular assault on solar energy, according to the Center for Media and Democracy.

Edison Electric is a prime player in ALEC — footing the bill and calling the shots on the anti-renewable agenda, said CMD. The group worked with ALEC on the "model" legislation rearing its ugly head in many states. (Here's an eye-opening map of front groups attacking renewable energy.)

Meanwhile, the billionaire Koch Brothers, which fund a network of more than 90 organizations, expect to spend $300 million in this year's election. Many of their groups are already active on eliminating support for renewable energy and preventing carbon regulations and taxes, but now a new one is specifically focused on that. The Kochs want Republicans removed from office for supporting wind energy and the Renewable Portfolio Standard in their home state of Kansas.  And they are behind a new Super Pac, Freedom Partners Action Fund.

Learn about promising new finance models for renewables at VERGE SF, Oct. 27 to 30. Image of desert sunrise by Gill Couto via Shutterstock