Solar Buyback Decrease Looms as APS Deadline Approaches
Buyback Decrease
New solar-qualified homeowners in APS territory should expect to see a 10% decrease in the value of home solar energy as the Arizona Corporation Commission nears their annual APS buyback hearing.
However, homeowners this month are in a great position to be grandfathered at the current buyback rate for the next 10 years. Rooftop Solar can compare what you are currently paying APS to what you could save with solar before the September 1st deadline.
A Little Background
APS’ buyback decrease is a request through the ACC called the “Rate Rider RCP” and affects the way APS values electricity exported from home solar. The way the electric company values the power solar homes export is a significant part of solar’s return on investment. You can check out the document on APS’s website here.
There is a chance that the ACC could deny APS’s upcoming request, but since 2017, they have only approved such decreases. APS argues that residential solar hurts their bottom line. This argument has been credibly challenged both in Arizona and in other states where utility companies have proposed such changes. You can read the Department of Energy’s analysis and rebuttal at energy.gov.
These studies indicate that the contribution of residential solar is a net positive for the economy as well as the utility. It is also noteworthy that here in Arizona the electric company is not a publicly-owned utility but rather a privately owned one.
It is also worth considering the tremendous benefit solar provides to the economy and the grid itself. For instance, solar provides distributed energy to the grid which is good for reliability, sustainability, and lowering infrastructure costs, yet the APS argument for lowering buyback is that solar adds cost to their grid management. Most of the ACC’s debate with APS centers around this very topic.
A Great Time to Invest
APS first lowered solar payback in September of 2017 when it was granted its first 10% decrease. They have since asked for the same decrease every year, and the ACC has obliged each year, except in 2020, in response to the covid crisis. By all indications, the solar RCP rate will fall another 10% in 2024.
Prior to the inception of the RCP Rate, APS followed a system applied widely across the U.S. called net-metering. This is a system where the electricity exported from home solar is valued the same as APS’s electricity sold, but since 2017 APS has been allowed to value exported solar energy at a lower rate.
Despite these changes, solar still makes a lot of sense in Arizona, and it is important to get a quote before September this year in order to take advantage of the current RCP rate.
Again, there is always the chance that the ACC will choose to deny APS this year, and Rooftop Solar is very hopeful for the future of solar valuation. But in the meantime, it still makes more sense to start saving today rather than wait!
