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Investor-owned utility Arizona Public Service Co. (APS) has submitted a plan to state regulators that aims to change the rate protocol for rooftop solar customers.

The plan is built around two options. Under the net metering option, future rooftop solar customers would be compensated through the current net metering structure and pay a charge for their use of the grid, based on how much electricity they use.

Under the bill credit option, net metering would be replaced by a bill credit given to solar customers for the energy they generate, at a price set by the Arizona Corporation Commission (ACC) and based on the market rates APS pays other generators for power.

The plan applies only to residential customers because business customer rates already are designed to reflect their use of the grid.

APS also supports increasing the upfront cash incentives for customers who choose solar, making rooftop solar more affordable, according to the utility.

"One of our responsibilities is to make sure the infrastructure is in place to support a future of rapidly increasing solar adoption," says APS Chairman and CEO Don Brandt.

Under current rules, rooftop solar customers are allowed to use the grid essentially for free. As a result, customers who cannot afford solar panels, do not have a suitable place to put them or simply do not want rooftop solar end up paying higher rates, according to APS. As the number of customers installing solar goes up, it drives rates even higher for non-solar customers, making the problem more difficult to solve.

"As more customers install solar on their homes, it becomes even more important that everyone who uses the grid shares in the cost of keeping it operating reliably for the future," says Brandt.

Customers who already have installed rooftop solar, along with those who have submitted an application to interconnect a system by mid-October, would be given a 20-year grace period before the new policy takes effect.

"Either of the options we have proposed, together with the upfront incentives, preserves the choice for customers to install solar and makes rooftop solar an ongoing sustainable resource, which is not the case today," says Mark Schiavoni, APS' executive vice president of operations. "Solar customers will be compensated fairly for their solar energy while paying their fair share of the cost of the grid. The result is a system that allows all customers to benefit from solar energy in Arizona."

APS also has developed the Community Power Project in Flagstaff, a research pilot studying the effects of large concentrations of rooftop solar in neighborhoods.

"We know solar power is going to play a big part in meeting Arizona's future energy needs," says Brandt. "We're doing our part to help make that happen."

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