Arizona Imposes Net Metering Fee on Rooftop Solar

After a long battle pitting solar advocates against parts of the electric power industry, Arizona's electricity regulator has imposed a small fee on home operators of photovoltaic systems that rely on "net metering" to feed excess solar electricity back into the grid. Net metering has been controversial among utilities across the United States and in countries like the UK as well, because of claims that if customers generating electricity at home are allowed to sell electricity back into the grid at the going spot price of electricity, then the added system costs of providing the needed infrastructure will be shifted to all the rest of the customers.

The state's utility regulator, the Arizona Corporation Commission, concluded that concerns about the cost shift are real and imposed a fee of 70 cents per kilowatt of installed solar, which would equate to about $5 per month in a typical household. Though that is but a tenth of what the power industry had advocated, spending millions of dollars to lobby the Arizona regulators and influence public opinion, it may have some national impact. As Arizona is  the country's leading solar state (on a per capital basis), its regulatory thinking could be a bellwether. What is more, rules governing net metering are bound to become more important almost everywhere, as homes start feeding electricity into the grid not only from photovoltaic panels, but also other sources such as electric vehicle batteries, fuel cells, and wind turbines.

The net metering fee could also have some impact on an alternative option for residential PV, which goes by the name of "solar gardens." In this model, instead of purchasing a home installation with all the attendant complications--including, now, factoring in the net metering fee--customers buy a "plot" or lease its output in a cooperatively owned solar farm. Electricity generated on the plot monthly is subtracted from the customer's electricity consumption, and if production exceeds consumption, the customer is credited. An Arizona cooperative has been a pioneer in developing solar gardens, and the concept is catching on even in the northern Midwest.

Photo: Jenna Wagner/Getty Images

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