Neither do many companies.
This APS solar array near Cooper and Guadalupe roads provides enough electricity to power about 30 homes — for about six hours a day.
Sandy Bahr, director of the Sierra Club's Grand Canyon Chapter
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Without the subsidies and government mandate, the solar boom now seen in Arizona would fizzle.
The incentives are intended to spur research and innovation that will make them unnecessary at some point. Meantime, the state is generating less solar power because of the way the handouts are distributed.
The 2006 state mandate requires that 25 percent of the renewable-energy programs run by utilities come from solar panels installed at Arizona homes and businesses.
Yet there's a common-sense fallacy to the system, if the goal is to produce more solar power overall: residential rooftop installations are less efficient, for the money invested, than large-scale commercial solar plants. The Solar Energy Industries Association reported earlier this year that average residential installations are priced at about $5 to $6 per watt, while utility-scale installations cost under $3 per watt.
In other words, about twice as much solar power could be generated for the same price if the money spent on home units went toward commercial-scale projects.
Not only are the homeowner subsidies enabling pricier energy, but the high, upfront costs of solar installation, even after subtracting the incentives, means people of lesser means often can't participate in the giveaway.
Arizona has received about $315 million from a federal program that provides a 30 percent discount off the installation of renewable-energy projects. About a third of that has gone to solar projects, while most of the rest has gone into windmills, which produce power 24 hours a day in windy areas. The 30 percent program is scheduled to be reduced to 10 percent by 2017, but industry lobbyists, including those with the national Solar Energy Industries Association, hope it will be extended.
Besides the federal incentive, the state and the utilities help make these solar deals even sweeter with direct and indirect subsidies.
Last year, for example, APS shelled out $53 million in residential "incentives" and $12 million in non-residential ones. To pay for these subsidies, APS hit its customers with a surcharge. In 2012, all residential customers paid a maximum surcharge of $3.84 in their monthly bills. (It's not a flat fee: Households that consume low energy pay slightly less.)
"The rooftop installers worked to get themselves included in the renewable-energy standard, and they have a nice carve-out," says Gary Pierce, chairman of the five-member Arizona Corporation Commission. "That's the most significant part that people pay in the surcharge on bills. The lion's share goes to rooftop."
This will change in coming years. The $12 million for non-residential solar installations will be paid each year for the next 10, while the direct, upfront incentives for home systems already are getting scaled back. APS went from paying solar buyers $3 per installed watt of solar power in 2009 (that's $18,000 for a 6,000-watt system) to the current 10 cents per watt.
All APS customers, though, will continue to pay the surcharge.
Whether the subsidies for solar panels benefit the public at large is debatable, but there's no question that some individual customers have benefited greatly.
John Beavers of Mesa says he paid about $7,200 after subtracting the subsidies for the rooftop panels installed atop his home in 2010, an amount he figures will be paid off by power-bill savings in about four years. Beavers is an electrical contractor and believes his know-how helped him get a better deal. Plus, he's an energy miser in his 2,900-square-foot house; he keeps the thermostat set at a tepid 81 degrees in summer. His hot-weather bills have dropped by 20 percent, he says, and "I pay nothing in the winter."
Experts recommend that homeowners interested in solar obtain at least three bids from solar companies because the prices vary so widely. Beavers says he obtained five.
Investing in solar should be considered like any other investment, says Hank Peck, a Tucson financial analyst. Occasionally, when clients mention they're looking at plunking down 10 or 15 grand on solar panels, he first directs them to examine "all other areas of financial planning."
He advises them to pay off any consumer debt, like credit cards or vehicle loans, before investing much money in solar panels, because otherwise anything saved from the panels in utility costs is offset by interest on the unpaid debts. If a household's financial affairs are in order (retirement plans in place, kids' college-savings funds begun) and the client plans to stay in their home for many years, Peck says, "I say great, go ahead."
Before they buy, solar customers need a roof that will last at least as long as the solar system on top — or else they'll spend thousands more taking it down, then putting it back up on a new roof. Customers also may want to consult a roofing company before embarking, because if the solar company mounts the system poorly, the roof could leak.
Leased systems, in which homeowners don't own the equipment on their roofs, also have become popular. California-based Solar City, one of the biggest installers in the country, with five outlets in Arizona, advertises a plan in which customers pay nothing down and receive benefits from their energy savings immediately. Such something-for-nothing plans rely on the hefty subsidies to work. This year, Consumer Reports advised people to be wary of solar marketing that sounds too good to be true, calling it one of the country's biggest modern scams.
