Constitutional Stand-down on Rooftop Solar

In the battle for constitutional supremacy over all things solar (see my previous post), the solar initiative group chaired by former ACC Chair Kris Mayes has decided to call off the dogs following the legislature’s move to counteract the effort with two constitutional measures of its own. Needless to say, the legislative referendums under consideration were not to the solar industry’s liking. This constitutional tit-for-tat led both sides to mutually disarm and instead pursue negotiations to resolve issues rather than confuse and confound voters with constitutional clutter.

News reports indicate the opposing sides (presumptively reported as being led by SolarCity and APS, respectively) will engage a mediator to seek compromise on integrating rooftop solar into the utility grid and how to compensate solar installations for exporting power back to the grid.

Rooftop Solar Subsidies Enshrined in the Arizona Constitution?

It seems reasonable that the rooftop solar lobby wants to make its money while the sun’s a-shining. But, while the sun will be around for the next 5 billion years or so, the rooftop solar leasing companies’ business model will need to be reworked soon or face a rapidly dim future. Unless, that is, the rooftop solar industry can shield the subsidies it was built on and halt the natural progression of market economics.

The rooftop solar model is predicated on subsidies that benefit solar installations, but are paid for by others. These subsidies come in various forms like federal tax incentives and hidden subsidies within the byzantine program called net metering.  Absent the subsidies baked into rooftop solar leases, the model is a bust – for potential solar customers and for the companies seeking profits on the leases.

System Improvements Benefit Mechanism on Hold at ACC; Awaiting Appeal to Supreme Court

In what was thought by many an innovative approach to funding investment in dilapidated and crumbling water distribution infrastructure, the Arizona Court of Appeals vacated the System Improvements Benefit (SIB) adjustor mechanism, authorized by the ACC for Arizona Water Company, and later extended it to other water companies (see my previous post HERE).  According to the court opinion, the SIB mechanism approved by the ACC “. . . does not comply with the Arizona Constitution’s mandate that the Commission determine and use fair value when setting a monopolistic utility’s rate.”   

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