smkettner
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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Mon Nov 18, 2013 4:10 pm

DarthPuppy wrote:The distribution grid already exists and the cost of maintainnig that is baked into the price already charged.

And the utility gets a perpetual rate of return on the grid assets. No charges to homeowner = no contributing rate of return.

What gets me is in CA I read where high usage customers contribute more than their fair share toward this rate of return due to the high sliding scale for charges. Apparently that does not present a problem. But when these customers put in solar suddenly it is a financial burden :roll:
Maybe the lowest regulated tiers are not really paying enough either.
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DarthPuppy
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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Mon Nov 18, 2013 4:19 pm

That is a good point. In California, we do soak it to those with money in every aspect. If you have higher income, you pay higher tax. If you use more electricity/water/gas/whatever, you pay more since only the wealthier would have the larger homes and therefore use more of this stuff. And since the wealthier ones are the ones investing in the solar panels, it fits the California model to hit 'em again.

I understand the politics of it. But as an accountant, I really dislike when financial analyses are butchered to attempt to justify it. It is sadly true that the best way to tell a lie is to use numbers as most people don't realize the manipulations that can be done and assume that if you have numbers, you must have done your homework and your position is valid.

Okay, I will get off my soap box for a while. :ugeek:
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Volusiano
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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Mon Nov 18, 2013 4:28 pm

RegGuheert wrote:
LEAFfan wrote:Only 7 Bucks! Our (SRP) connect fee is $20 and APS's is very close to that. We all have a high grid-connect fee already!
Wow! I didn't realize that! Thanks for pointing that out!
I just looked at my SRP bill and the monthly service fee is $17. It's interesting that another SRP customer here reported $20 service charge. I wonder if SRP has different service charges for different zip codes or something.

Volusiano
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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Mon Nov 18, 2013 4:32 pm

jspearman wrote:On a happier note, it will take APS about 6 years to recover the money they spent on this campaign at $5 per month for each new solar install, so other utilities are unlikely to waste their money, time and reputations. Whether utilities like it or not, they are being disrupted and there's very little they can do about it unless they adapt. Dinosaurs like APS might limp into the future with a more limited role, but their day in the sun is over (pun definitely intended).
I think the new fee will go to directly into reducing the rate of non-solar customers instead of lining APS's pocket (as much as they'd like to). But the spread will make this reduction insignificant per non-solar customer anyway.

Also, APS is not at liberty to recover their $3.7M campaign cost by passing it on as a cost to rate payers. I heard that the point was raised about this at the hearing and APS promised that they will eat that cost out of their profit and won't make customers pay for it.

Another thing is that while this $0.70/kw/month charge is not the $50-$100/month APS wants, it's probably enough to kill to monthly solar lease market. The solar industry was telling the ACC that the average monthly saving for a monthly leased system is only $5-$10/month less than the utility bill. So imposing a fee of around $5/month pretty much wipes out any saving on a monthly leased system.
Last edited by Volusiano on Mon Nov 18, 2013 5:43 pm, edited 6 times in total.

Volusiano
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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Mon Nov 18, 2013 4:41 pm

DarthPuppy wrote:The argument that we "store" in the grid is bogus. In fact, we produce during the day when demand is high and generation/purchasing for the utility is expensive, thereby reducing the need for expensive new plants. This greatly reduces the cost to the utility. We then draw at night when they have far excess capacity and the power is cheap. Residential solar production is a pure win-win for the utility.
This is the normal argument from the solar proponent's side. However, there's a little twist on this argument with APS being a regulated monopoly as shown below.

Below is a tidbit from a pro-solar article pointing out that twist:

"APS does lose some revenue because putting off the need for new capital equipment hurts them, at least indirectly. It's easy to overlook this factor because for a regular profit-and-loss business, putting off capital expenditures would normally be good news for the balance sheet. But APS, as a regulated monopoly, earns a guaranteed rate of return on their capital expenditures. More capital expenditures therefore produce more total revenue. So what is good news for ratepayers (in B4) is actually bad news for APS' total revenue."

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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Tue Nov 19, 2013 2:28 pm

Excellent point Volusiano! The utility is incentivized by the guaranteed rate of return on capital investments to build it themselves even though residential solar is much better policy for the community and more efficient from a cost perspective. Even though by itself, residential solar is a win-win for the utility, that incentive warps the analysis and explains a lot of the utility pushback against solar.

And good point regarding the charges being enough to strip a lot of the appeal of the lease approach. This effectively pushes solar expansion to only those who can afford the capital outlay thereby greatly reducing the pace of implementation.
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dhanson865
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Re: Arizona Approves Grid-Connection Fees for Solar Rooftops

Tue Nov 19, 2013 4:21 pm

ydnas7 wrote:(ie the most difficult 15mins in the year is due to air conditioning)


I guess that depends on where you live. I know the thread is titled with the word Arizona in it but the concept will spread to other states.

fwiw in my case my highest bill comes from heating not cooling though both are done by a heat pump. I just don't use heat as many months as I use cooling so my AC unit is designed for best efficiency in warmer weather and I put up with the higher heating costs the one or two months of the year it gets really cold.

also even without solar panels I pay a "service charge" that puts a minimum on my electric bill, it's up to $13 per month now and seems to rise at least once per year.

If they added an additional fee to allow back feed from solar panels it would stretch the payback on buying solar PV or negate the possibility of payback.

All said and done I average closer to the top end of triple digits kwh/month with a minimum above 500 and a max around 1200. Low enough that my solar instillation would be small and a fixed fee would be an issue. I'd rather see a per kwh fee so small systems wouldn't be discouraged, using multiple brackets of system sizes with a separate fee in each bracket, or just have systems below a certain size be exempted entirely and save the fee for larger residential systems.
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