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ACC Approves Power Agreement for Schools, Non-Profits

The Arizona Corporation Commission rejected a move to regulate solar companies selling power to schools and nonprofits.  (Phx Business Journal; Patrick O'Grady). Wednesday’s decision could spur growth for companies that install solar units in the state as it opens the door to a swath of potential customers unlikely to buy systems on their own, but that still want to tap into renewable energy.

“I would say that this is a clear sign of the commission’s continued support of distributed rooftop solar,” said Tom Alston, state lead for the Solar Alliance and vice president of the Arizona Solar Energy Industries Association. “This should clear the way for the creation of hundreds of new jobs.”

The commission adopted a series of amendments offered by Chairwoman Kris Mayes to expand the ruling’s application beyond its original focus on schools to include nonprofits and other governmental entities. The move gutted an opinion by an administrative law judge that solar companies installing devices on school property and then selling the power back to the school be defined as a regulated utility.

“The message is clear that if you’re doing solar service agreements with nonprofits, schools and governments, that this is the way to go,” said Court Rich, an attorney with Rose Law Group PC, which represented installer SolarCity in the case.

Last fall, Foster City, Calif.-based SolarCity asked the ACC to forgo regulation of two solar systems it was installing in the Scottsdale Unified School District. The commission allowed those two and one other installation, but decided to review the larger issue.

The state Constitution defines groups selling power to other groups as public service companies subject to regulation, which the judge said should stand.

Nonprofits and schools benefit from such installations because they cannot take advantage of federal tax credits that cover 30 percent of a solar system’s cost for businesses and individuals.

Rich said the move to steer clear of regulation was backed by the solar industry as well as a host of other players, who normally find themselves at odds before the commission. The commission also has been pushing solar as a viable energy source.

Read article in Phoenix Business Journal (6/30/2010)