Solar Policy in AZ

Tom Alston Director of Businesses and Policy Development for American Solar Electric

Solar Alliance State Leadtom@americanpv.com

Overview

2009 Incentive Programs and FundingCurrent Amount of Solar in AZRatesPolicy BasicsUpcoming Policies

Incentives

Utility Incentives Tax Incentives

Utility Incentives

Incentives APS TEP SRP TRICOResidentialUp-Front Incentives Per Watt $3.00 $3.00 $3.00 $4.00Non-Residential10-year PBI with 20Year REC Agreement10-Year PBI up to $.202 / kWh up to $.202 / kWh N/A15-Year PBI up to $.187 / kWh up to $.187 / kWh N/A20-Year PBI up to $.180 / kWh up to $.180 / kWh N/AUp-Front Incentives $ 2.50 per watt up to 50% $2.50 $2.50

A typical residential solar system would consist of 30 solar panels and be rated at 6000 Watts of capacity. This system would be eligible for $18,000 in incentives from utilities.

Federal and State Tax Incentives

Recent Passage of Investment Tax Credit Dramatically Reduced the Price of Residential Solar

Before Passage of Solar Investment Tax Credit (Included in Bailout Package) After Passage

System InfoSystem Size 6.3 kW

Installed Price $44,050 $44,050APS/SRP Rebate (Covered Upfront) $18,900 $18,900State Personal Income Tax Credit $1,000 $1,000Federal Personal Income Tax Credit $2,000 $12,914Installed Price After Incentives $22,150 $11,236

Savings with APS per Year $1,384 $1,384Savings with SRP per Year $1,107 $1,107Area required fro solar (Flat Roof) 750 Sq Ft 750 Sq FtEst. First Year Cumulative kWh Generated 216,180 216,180Est. Twenty year Cost per kWh $0.100 $0.052

Utility funds for Renewable Energy in Millions of Dollars

Funds Collected by Utilities for RES Program 2007

Funds to be Collected by Utilities

for RES Program 2008

Funds to be Collected by Utilities for RES Program in

2009

APS 11 33 78TEP 2 15 29SRP 4 4 4Total 17 52 111

Funds Collected by Utilities for the Distributed Generation Portion of the REST in 2009

APS 65TEP 21SRP 3.8Total 89.8

The Renewable Energy Standard and Tariff (REST)The Primary Reason There is Solar in Arizona

Year

Percentage of Energy Production APS and TEP must get from Renewable

Sources2017 72018 82019 92020 102021 112022 122023 132024 14

After 2024 15

Year

Percentage of Energy Production APS and TEP must

get from Renewable Sources

Number of Solar Homes that Need To be Installed by APS

in Current Year to Meet Requirement

2006 1.25 NA2007 1.5 NA

2008 1.751838 (Less than half the

Goal Was Achieved)2009 2 40002010 2.52011 32012 3.52013 42014 4.52015 52016 6

Current Legislation and Regulatory Changes ACC State Legislature Overall Industry Goals

The Arizona Corporation Commission

Sandra Kennedy

Commissioner

Gary Pierce

Commissioner

Kris Mayes

Chairman

Paul Newman

Commissioner

Bob Stump

Commissioner

•New Policies•Solar Friendly Rate Design?•Utility Performance Incentives?•Other?

Older systems will be able to switch to Net Metering System Size Caps for Net Metering

“125% of the Net Metering Customer's total connected load, or in the absence of customer load data, capacity less than or equal to the Customer's electric service drop capacity”

Full retail value for net excess over the course of the billing cycle with monthly roll-over, true for TOU plans as well

Net excess remaining at the end of the year will be paid out in the form of a check at avoided costs

Net Metering TEP, APS, Co-Ops Cont.

Arizona State Legislature

Rep. Lucy Mason Rep. Chad Campbell Rep. Farley

Rep. BooneRep. Reagan Rep. Leff

Permit Cap for residential grid-tied solar systems in Cities, Towns, and Counties

OVERVIEW Reduce excessively high fees imposed by cities and

counties to permit roof-top solar systems PROVISIONS Would limit the total fees associated with obtaining a full

permit for a solar system, from cities and towns to install solar system to no more than: $100 for Residential solar hot water systems $300 for Residential grid-tied solar photovoltaic systems

OVERVIEW: Changes rules and allows schools to voluntarily engage in long

term renewable energy service agreements and energy efficiency performance contracts

PROVISIONS Allows schools to retain cost savings associated with energy

efficiency and renewable energy production Expands definition of eligible “Cost Saving Measures” for schools Enables school governing boards to enter into energy performance

or renewable energy power purchase contracts without holding elections

Allows school districts to establish an energy and water savings account that will provide schools with financial flexibility in executing long term renewable energy and energy efficiency contracts

Enabling Solar Schools

Objectives of Solar Alliance