Tucson Electric Power has received regulatory approval for a plan to install rooftop solar panels at customers' homes and provide their electric service for a set monthly fee that would remain fixed for up to 25 years.
TEP's Residential Solar Program, approved by the Arizona Corporation Commission (ACC), will let customers go solar with no installation or maintenance costs. After paying a $250 administrative fee, participants will pay a fixed monthly electric rate that roughly matches their current average bills, generating significant savings if TEP's rates or energy costs increase in the future.
The first-of-its-kind program will be made available next spring to 500-600 customers in 2015. The company will seek participants in areas where TEP's solar arrays would maximize benefits for the local electric grid that serves all customers. System size requirements, proximity to the grid and opportunities to integrate advanced inverter technologies will be considered. TEP will also look for sites where solar panels can be positioned to maximize output that more closely coincides with peak demand.
TEP will partner with local solar companies to install and maintain the systems, contributing to Arizona's growing green energy economy. By installing the most cost-effective, reliable rooftop solar systems possible, the program will provide superior community and customer benefits.
ACC Staff, the state's Residential Utility Consumer Office (RUCO), environmental advocates and local solar installers filed comments with the ACC in favor of the proposal. It was opposed by out-of-state solar lease providers who, in seeking to block the program, would have limited the market for rooftop solar power systems in Tucson.
"Our program will provide additional customer choice and new green energy options for our customers," said Philip J. Dion, senior vice president of public policy and customer solutions. "Participation will not be limited by customers' FICO credit scores, which opens the program to many Tucson residents who do not qualify for private solar leases."
TEP will own and operate the systems, adding them to the company's expanding renewable resources. Those resources will grow this month with completion of a 35MW solar array near Green Valley and a nearly 18MW system at Fort Huachuca in Sierra Vista. By the end of 2014, TEP expects to have more than 340MW of total renewable generating capacity, enough to meet the electric needs of more than 71,000 homes.
Solar energy is an important part of TEP's increasingly diverse generating portfolio. The company is reducing its overall coal capacity by more than 30% over the next five years through increased use of renewable power, energy efficiency and natural-gas generation, including a newly acquired share of the Gila River Power Station in Gila Bend.
The fixed monthly fee paid by program participants will be based on their average historic energy usage. TEP will not change the fee unless customers' average annual usage changes by more than 15% after joining the program. The ACC could change the fee in the future, but participating customers could choose to withdraw from the program at that time if the new fee is applied to them. Otherwise, the fee would remain in place for the 25-year expected life of the solar power system.