Solar Energy

Leased Rooftop Solar No Longer a Good Deal in Arizona, Says Tech Site

Two recent policy decisions in Arizona regarding solar energy make leased rooftop panels a poor deal in the state, says an energy-news website dedicated to promoting the technology.

Greentech Media's research into the impact of the Arizona Corporation Commission's November decision to add a new, yearly fee to the bills of new rooftop solar customers, combined with a new tax hike for leased solar systems, means it will cost customers more, on average, then electricity from the grid.

See also: -Home Solar in Arizona Takes Hit After Vote by Corporation Commission to Add Surcharge

The overall effect means the solar-lease industry may "crater" in 2014, says the June 30 article by Josh Cornfeld, who co-authored a 2010 paper for the Environmental and Energy Study Institute promoting the benefits of feed-in tariffs for solar energy.

Leased-solar systems took a hit in the media last week with a story in Bloomberg News, picked up today by Yahoo Finance News, about the potential pitfalls in trying to sell a home with such a system. The article includes the interesting claim that solar firm SunPower "initially rejected" a potential homebuyer because of a low credit score, frustrating the hopeful seller.

The Greentech article includes charts and acronyms like LCOE, for levelized cost of electricity. It boils down to this: The average electricity retail rate in Arizona is 11.3 cents a kilowatt hour, according to Greentech media, and installing a leased solar system boosts that average cost up to 12.1 cents an hour.

"This finding suggests that the value proposition for installing (third-party owned) distributed solar in Arizona in 2014 has been damaged by the recent policy shifts," Cornfeld writes. Earlier in his article, Cornfeld claims "many" in the industry are worried the rooftop-solar market in Arizona could "crater."

Solar advocates have been pushing for a new law in Arizona that would eliminate the new tax on leased solar equipment, but have so far been unsuccessful. The tax has also become an issue in the upcoming race for two open seats on the corporation commission.

UPDATE: See the Phoenix Business Journal story today about SolarCity and Sunrun suing the state over the property-tax issue.

Got a tip? Send it to: Ray Stern.

Follow Valley Fever on Twitter at @ValleyFeverPHX. Follow Ray Stern on Twitter at @RayStern.