Why Sun-Soaked Arizona Is Killing Solar Power



Comments (36)

  1. Daaoouu says:

    There are some great things in the works. One company now has a device to regulate voltage on the fly – making it possible to use capacitors as batteries, which could greatly reduce cost for energy storage. This company has also developed new low cost solar thermal technologies and offers a great deal for ownership in their project using the tax benefits available – where you can keep about 30% of your income taxes in your pocket while also gaining ownership in a solar power generation plant at no cost (tax savings cover the cost). Instead of your taxes going to support gov. waste and corruption, they can work for you – greatly benefiting the country – the economy and environment.

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    Loretta Cook Reply:

    What company is this?

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    Rich Reply:

    Here away to beat the corp boss. Use your solar and some battery only on the rooms that use 15 amp like bedroom , bath living room. These room don’t use much power . Leave you 30 to 50 amp power line on the grid plus your frig. These are the high power uses . Get on the Time of use plan. You don’t need as big of a system to run these room plus it will save you in the long run

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    Ben Reply:

    Capacitors are not batteries and cannot store enough energy to replace batteries. A 1 Farad capacitor is the size of a coffee can and cannot replace the energy storage of a single AAA NiMH cell. Please use real information when you post instead of concentrated snake oil!

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  2. Bill Kaszeta says:

    How times change- a few years ago the SRP and APS PV rebates were reduced if the array did not face South.

    All Arizona electric utilities monetize a high percentage of their fixed costs into the KWH rate, especially for residential service. There seems to be a reluctance to even consider changing this. The electric utilities are basically in the distribution business, but they charge mostly on an energy basis.

    However, if all residential fixed costs were accurately billed to customers, PV systems would not be an economic investment. PV systems only minimally reduce peak demand on a monthly basis, and the KWH rate would be lower.

    It is difficult to get a serious discussion going in Arizona as to what is the most fair way of charging for electrical distribution when all aspects are considered. These recent utility proposed changes are loosing sight of the environmental reasons for renewable energy.

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    Charles Reply:

    No, APS *separately* bills for many items: monthly account charge, (mine is $7.62 ), metering (mine is $5.95), meter reading ($1.96, even though the meter is read remotely through a 900 MHz ISM mesh network), and billing (mine is $2.24). These costs are itemized for both my Combined Advantage time-of-use rate, and the standard rate. Even a “Federal transmission and ancillary services” charge is itemized.

    My solar system significantly reduced my peak demand charges in both Winter (about 0.5 KWH now) and Summer (2.0 KWH, down from 3.5 KWH).

    As an economic investment, my break-even is about twenty years, without either the APS incentive or the Federal Tax Credit.

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    Ben Reply:

    I took advantage of the APS rebates offer in 2011 with 1.35 per watt maximum being paid on my system. My price was 1.10 per watt with the contractor. Due to the contractor closing shop later in 2012 without completing 3 corrective actions, I legally took the Federal tax credit on my purchase price instead of allowing the defunct contracting company to claim it. My time to recover all costs was 18 months. I have had to perform 2 repairs – one wire connection failure and one panel replacement (under mfg warranty at no cost). I am happy with the end result and that I produce more than I use. There are rate rules in effect that cut those fixed costs like metering and billing in half when you go below some minimum of usage. I have negative usage so I get that rate and pay about $10 per month in fixed costs on my APS bill. You can see all the data about my project on AZBen dot blogspot dot com.

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  3. Howell Jones says:

    Why is it that APS a for profit company with stockholders, charging the same rates per kilowatt hour as ED3, can do well for it’s shareholders and ED3 a non profit company has to be subsidized with property tax dollars?

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  4. William says:

    If a person uses a solar system for use only in his house should not have to pay a surcharge, however, if he is selling his excess to the utility he should share in the cost of maintaining the grid.

    All users are paying for the up keep on the grid and it is included in the rate.

    I hope that this will be resolved with fairness to both the utility customer and the solar producer

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    Charles Reply:

    The minimum charge that I pay to APS (with no electricity use) is about $24 per month, or $288 per year. Last year I delivered 5,300 KWH to APS, most of it on-peak, for $0.029 per KWH, less than the cost of generating electricity from coal, which APS in turn sold to their customers within my local substation for $0.05 per KWH off-peak, and $0.25 per KWH on-peak., for 100% and 500% profit, respectively. Note: when solar penetration is low (less than about 20%), substation voltage regulators sequester DG production to subsequent use within its local grid.

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    Ben Reply:

    There is no need to charge a fee to use the grid because all the surplus I generate is being sold by APS immediately through someone else’s meter. They pay me the LWCA (Lowest Wholesale Cost Avoided) of about 2.6 cents and they collect not only the 26 or 27 cents per kWh peak fee, but also all those itemized costs of operation and transmission. So my estimate is that when I get $400 at the end of the year for 10,600 kWh surplus, APS received at least $4000 for that power in generating and delivery charges. I think they get plenty from solar without adding a network or grid tie fee. Check your bill and you’ll see that the generating fees are only half, and yet all the fees are usage based except accounting, billing, and metering.

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  5. RWHAWK says:

    I’d have more sympathy for the homeowners if they weren’t subsidized by the taxpayers for the purchase and installation of their solar systems. In other words, if the govt stayed out of “rent avoidance” and “rent seeking” policies to pick winners and losers then perhaps the author can conclude that AZ is truly warring against solar energy.

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    william nutter Reply:

    when a customer leases a solar system, they are not subsidized they do not receive any credit from the government

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    Charles Reply:

    I have taken neither the APS incentive (kept my freedom from the extended requirements in that agreement), nor the Federal Tax credit (no taxable income liability).

    None of your dollars paid for my system.

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    BKester Reply:

    And on what planet does APS NOT get government subsidies of many varied sources??? From fuel transportation, actual fuel purchase arrangements, materials for structural construction, land acquisition tax breaks, guaranteed ROI for investors, to just about every grace granted to energy producer monopolies the subsidies somehow don’t register in “fairness” arguments. Why is this somehow not mentioned when the subsidy issue slams solar?

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    Ben Reply:

    I had no problem taking the federal tax money. The reason? I pay three times more in federal taxes than the credit EVERY YEAR. So a one time credit was not being taken from someone else. It was a credit for all those taxes I pay all the time. Don’t think your tax money got anywhere near my roof.

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  6. RS says:

    The utilities are being very short sighted. Technology marches on, batteries will get cheaper and PV panel efficiency will increase. There will be a day when we will be able to install a system with batteries that will take the home off the grid. These rate policies will just stimulate demand for off grid solutions which will encourage the private sector to to do the R&D to bring more affordable off grid solutions to market.

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    James Reply:

    I agree with RS. As electric companies try to find ways to keep the money coming in even if you switch to solar, wind, hydrogen cells, or whatever other type of power, the demand is going to shift more and more to getting your home COMPLETELY off the grid and not depending on the utility company for anything. Right now, the battery backup is the major obstacle for removing a solar powered home from the grid. You obviously need some sort of secondary power source since the home will not be generating any power when the sun isn’t up, and a full battery backup solution for most homes just isn’t a financially viable option. I live in AZ and am planning on going solar soon, and even with with the additional $50/mo ($600/yr) I’ll have to spend on the new surcharge it still makes more financial sense to stay on the grid. I would need to spend $10-$12K for a battery system large enough to power my entire house, and I would probably need to also install a backup natural-gas-powered generator for those rare times where we get a few full days in a row of cloudy weather. So right there that’s $15-$20K of additional resources needed to go completely off-grid, and I would also need to replace the batteries after about 10 years. With the new surcharge I will only spend $6,000 over 10 years to stay on the grid, so it would cost me at least 3x as much to go completely off-grid. But when the time comes where the off-grid solution will pay for itself over no more than a 10 year period, you can bet that I’ll jump right on it.

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    Sean Reply:

    When I installed solar, about a year ago, I did a similar calculation, and came to the same conclusion – cheaper to go grid-tie, than off-grid, due to cost of batteries.

    Eventually, as you point out, this calculus will change. Mainly as a result of probable reductions in battery cost. But also as a result of higher grid-tie fees.

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    Charles Reply:

    Hi, I am also in AZ and because of the number of sunny days in this region, my system has been an absolute success. I also hope to eventually go completely off-grid, but the cost of a system pretty much doubles, and at this point there is no payback if you do.

    In this past year, there were 2-3 times that I would have required backup from a propane generator (for example), even with a 24.5 KWH storage battery (the capacity that the Nissan Leaf uses). That capacity would likely allow me to use electricity for two days during cloudy, rainy weather, but not for three days. However, If I had natural gas and a furnace, things would be different and the required battery storage size would be less.

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    Phillip Reply:

    SRP not only charges a solar tax, but a punitive fee for having a rapid-charging electric car, like a Tesla. A high, short current demand would add $300-$400 per month for our 80kW Model S. Ironically enough, we are purchasing a battery system very similar to the one Tesla uses in their cars for around $15,000. It provides nearly 5 days of electricity. I will not allow SRP to fine me for my choice to use solar. I will, however, leave them to hang and spend my money to extricate myself from their idiocy.

    Charles Reply:

    Deep discharge lead-acid batteries (FLA, AGM, and HuPT) are not economical because of their limited charge/discharge cycles (about 2,000), practical depth-of-discharge (50%, or 80% for HuPT), high energy loss when charging (30%), and high failure rate at high temperatures in hot climates.

    A Tesla auto lithium-ion battery type (Panasonic 18650) is a possibility, but it is still very expensive, requires a temperature management system to prevent thermal run-away, and needs a precision battery management system. If you overcharge or completely discharge your lithium-ion energy-storage batteries, you ruin them.

    The theoretical limit of efficiency for silicon solar cells is 30-33%. I think 22% efficiency has been achieved in some modules. The next technological step is to use direct band-gap heterogeneous semiconductors with stepped band-gaps (to capture more of the sun’s spectrum), which has already been done for space vehicles, and is quite a bit more expensive.

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    Ben Reply:

    Tesla’s lithium battery backup system is great, but will not work on a normal house in Arizona. This is because the maximum discharge rate of 1500 watts will not crank either of my air conditioners and even with two I could not go off grid. I am very interested in this technology, but lead acid storage batteries are still the only option until higher discharge rates are offered for Lithium Ion or other batteries.

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  7. Greg says:

    We purchased Solar in May of 2013. Since then our bills run
    55.00 in Aug Sept to 22.00 in winter months since we have Natural Gas.

    SRP told me in 2025 My summer rate will go to 157.00 to help support the grid. That’s a 185% increase. We are near fixed income and bought into the Solar to help us in our retired years. Now we will be penalized for having spent the money to install the Solar. The power that we sell back to SRP is well below Wholesale.

    We might as well shut off the panels in 10 years when the hike is imposed It may be cheaper.

    Bitter

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    Sean Reply:

    I’m in a similar situation.

    I have a modest home, and focused on efficiency first. So, in winter, prior to installing solar, my bills were $45 – in summer, $145.

    With the new pricing plan, and 100% of my energy consumption now offset by solar production, my bills will actually be MORE than they would be with no solar system at all!

    If they are going to go to a base-fee system to cover grid connection, and demand-fee to cover peak demand, it needs to be applied to ALL customers, not just solar.

    But the problem with such a pricing system – smaller, low income households get slammed with higher bills, while mega-homes would see a major cut in their bills. There would be uproar. SRP knows this, which is why they don’t do it.

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    Sean Reply:

    Additionally, the value of a watt of solar electricity is higher than the value of a watt of coal or natural gas produced electricity.

    SRP itself faces regulatory demands to meet certain levels of alternative energy production – solar rooftop helps them reach this target.

    Solar production also coincides with peak demand in the summer.

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  8. Sean says:

    Same here.

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  9. Sean says:

    Although at first blush the idea that fixed costs should be applied as fixed rates, and variable costs should be applied as variable rates, makes sense, there are some issues:

    First, this dynamic is not unique to the energy business. It is true of most businesses.

    The main expense of a restaurant, for example, is not food – it is rent & staff. Would it then make sense for a restaurant to charge each table a fixed cost – total fixed costs divided by daily tables served – and a variable cost for the food?

    Such that you if you go to a restaurant, and order a cheeseburger, you pay $20 fixed cost + $1.75 for the burger?

    While a party of six next to you, who ordered appetizers, steaks, deserts, and wine, pay $20 fixed cost + $14.75 for their food?

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    Sean Reply:

    Applying this to retail electric:

    Small homes with low consumption would get slammed with higher bills, while large homes with high consumption would end up with lower bills.

    This would make for fairly bad PR for utilities – which is why they avoid the fixed/variable fee structure.

    The fixed/variable pricing structure also disincentives efficiency. If customers paid a high fixed rate, plus 4 cents/watt, they’d have less reason to invest in efficiency than if they paid 10 cents/watt.

    There is no easy answer – with the 10 cents/watt model, if everyone is more efficient, the utility is left under-funded.

    Key note: What this does display is how inefficient grid systems are. It costs 7 cents to deliver 3 cents worth of electricity…..

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  10. Mike says:

    Just canceled our solar install for tomorrow. Prior to SRP’s “proposed” changes we were running into a case where the net cost for solar was going to be about $300 more for the lease annually than what we were paying to SRP (we’re heavy TOU users here). The “proposal” isn’t that… it’s the reality. Factoring in those costs is making it tough to commit to putting a system on my roof right now. The reality is.. if SRP does it this time… what’s to stop them from doing it again next year, 5 years, or ten years from now?! SRP has basically demonstrated that as long as you are on their grid… the economics of your system will be dictated by them. I’ve tried to continue to justify going forward, but the reality is .. SRP has confirmed my worst fears.

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  11. Olga says:

    In other words, getting solar panels it’s not worth it?I suppose to get them install this year, but I heard SRP and APS will be increasing $100.00 each month to citizens with solar panels to help with the grid. I am very discourage. I was hoping to not have a electricity bill in 10 years from now.

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  12. Tt says:

    Tesla is coming out with a new battery for home storage that may be revolutionary. Also, if SRP and APS get away with their Solar-punishing fees, there will be equipment options to use solar but not grid tie. This means only that you would not be able to sell energy back to the utilities, but would get the benefit of your panels during high demand times, in the afternoon. They couldn’t penalize you for having solar if it is an off grid system.

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  13. Tonto says:

    My wife and I recently retired and we’re planning to purchase a second home in AZ. I plan to install solar at the new residence. Being an electrical engineer, I designed and installed a 5-kWh grid-tied system at our current residence in CA back in 2001. Since I installed the system myself, our ROI was less than 8 years and our annual electricity charge is typically less than $200. If the AZ utility’s policies make installing a grid-tied system unaffordable, I just won’t grid-tie the system. A stand-alone system to power critical loads is all that’s necessary. We will avoid consumption from the utility’s grid, thereby reducing their charges and we will reap the full benefit of the system.

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  14. Will Koenig says:

    Another option would be to use solar for water heating only to reduce the initial investment while still maintaining some energy savings; or simply take a cold shower to boost your energy.

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  15. Henry Vance says:

    I think that everyone should send these letters to President Obama who is touting the increased use of solar electric power. Maybe he could talk the electric companies into a better solution.

    Central power systems are operated under regulation of local or state governments. Talks with the governments should be initiated so that an energy efficient system is possible – with the individual homeowner as a stakeholder – not a competitor.

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  16. Harley Lever says:

    APS and SRP are monopolies trying to kill energy independence of the individual. They are subsidized heavily by the government. They are also allowed to pay below wholesale values for solar energy, when they should be paying retail pricing. This is plain and simple mafia tactics. These organizations should be taken to court and prosecuted under the Sherman anti-trust act.

    Let the free market principles apply. Remove subsidies from both solar and the utilities and let individual solar owners and SRP sell electricity on the free market and treat the grid as a “stock exchange”… simply a vehicle to support the electrical market. I guarantee SRP and APS would collapse.

    The only reason these monopolies exist is because they are shielded from anti-trust laws because they were to do things for the “Good of the Public”. However, they have a long history of doing exactly the opposite. Their grids are antiquated, the charge ridiculous prices for the benefit of a few shareholders, and are now destroying energy freedom, energy jobs, and hurting the very people they are supposed to help.

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