TEP seeks to shift solar incentives

Oct 10 - McClatchy-Tribune Regional News - David Wichner The Arizona Daily Star, Tucson

Fresh out of incentive funding budgeted for rooftop solar systems for 2011, Tucson Electric Power Co. has proposed shifting some money around to fund more systems this year.

TEP notified the Arizona Corporation Commission and local installers in early September that it had run out of upfront incentive funding for residential rooftop solar systems, after receiving a rush of applications for leased systems.

Later in the month, the utility ran out of funds earmarked for customer-owned commercial rooftop systems.

TEP filed a notice with the Corporation Commission saying it had suspended the residential incentive program after taking $1.64 million in applications above the budgeted amount. The utility offered to move leftover funds earmarked for larger commercial systems and other funds, totaling $2.9 million, to cover the excess residential system applications and others at the rate of $1 a watt.

The Corporation Commission staff in a subsequent filing agreed with TEP but recommended the incentive level for the supplemental funding be set at 75 cents per watt.

The Corporation Commission is expected to consider the matter at its open meeting this week.

TEP spokesman Joe Salkowski said the utility has not taken a formal position on the commission staff's proposal, though the company believes a $1 per watt incentive is more appropriate.

Still in process is TEP's 2012 renewable-energy plan, which proposes to cut upfront incentives for leased systems to $1 per watt, compared with $1.75 per watt proposed for customer-owned systems.

That proposal has met with opposition from solar leasing companies, who say it's unfair to people who can't afford to buy a system outright.

TEP's 2012 plan also proposes to cut subsidies for commercial solar systems by 70 percent from 2011, since enough of that commercial capacity has been installed to meet the current state renewable-energy requirements.

The Corporation Commission is expected to rule on TEP's 2012 renewables plan by November or December.

Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 573-4181.