Dive Brief:
- A Tucson Electric Power (TEP) filing with the Arizona Corporation Commission (ACC) asked approval for an expenditure of $10 million to build a 5 MW community solar array in 2016. The array’s output will be sold in portions to subscribers as 10-year, fixed-rate contracts.
- TEP also asked in the filing for regulators to approve expansion of the utility-owned rooftop solar program approved in 2014. The utility wants to spend $15 million to add 1,000 new customer-participants to the $10 million, 500-customer, 3.5 MW rooftop program approved last year.
- In TEP’s landmark rooftop solar program, a customer pays $250 processing fees to have a rooftop array installed. The customer's electricity rates are then locked for 25 years. The utility gets the system's production. When the first 200 applications were made available online July 1, they were booked in less than half an hour, according to the utility.
Dive Insight:
TEP expects both ventures into utility-owned solar to ultimately be part of its rate base and to therefore bring, through ratepayer bills, lower costs to consmers. TEP also expects the programs’ generation to count toward meeting both Arizona’s 15% by 2025 renewables mandate and its obligation to obtain 4.5% of annual electricity sales from distributed generation.
Because the utility is taking on extraneous expenses, the community solar installation is expected to have a slightly higher cost to subscribers than the rooftop program, despite the fact that the utility is currently installing residential solar at $2.60 per watt and utility-scale solar at $1.80 per watt, TEP Director Carmine Tilghman recently told Greentech Media.
The regulatory proceeding this fall is likely to lead to a landmark decision on whether third parties can participate in community solar in Arizona, according Residential Utility Consumer Office consultant Lon Huber.
