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Repeated annual cuts can still add up to a much larger loss over time.
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It’s Groundhog Day for Arizona homeowners who invest in rooftop solar. They are about to get less money for the extra electricity they send back to the grid, in what is becoming an annual occurrence.
As PV Tech reported, the Arizona Corporation Commission (ACC) has approved another 10% cut to the state’s residential solar export rate, extending a yearslong pattern.
Beginning Sept. 1, households served by Arizona Public Service and Unisource Energy Service will receive a lower credit for excess solar power they export. PV Tech reported the rate will drop from roughly 6.17 cents per kilowatt-hour to about 5.5 cents per kilowatt-hour.
The export rate is the amount solar households are paid when their panels generate more electricity than they use and send that excess power to the grid. When that rate drops, new customers receive smaller bill credits, and the payback timeline for rooftop solar lengthens.
People who already have residential solar will continue at the export rate tied to the date they submitted their interconnection request, the outlet noted. But anyone who files after the lower rate takes effect will receive the reduced credit instead.
A similar 10% reduction is still pending for customers served by Tucson Electric Power, PV Tech noted. For Arizona Public Service and Unisource customers, this latest move makes seven consecutive years of cuts at the maximum annual level allowed under state law.
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Rooftop solar has long been one of the most direct ways for households to lower utility bills while also cutting pollution. As export credits continue to shrink, that equation changes, especially for middle-class families counting on long-term savings to justify the upfront cost.
Using the figures cited by PV Tech, Arizona’s residential solar export rate will be down by nearly 57% over eight years once this latest cut takes effect. In 2018, the rate was 12.9 cents per kilowatt-hour.
Weaker incentives for rooftop solar can slow adoption, reduce demand for local solar installers, and make it harder for households to protect themselves from rising electricity costs during extreme summer heat.
State law prevents the export rate from being reduced by more than 10% in any single year, PV Tech pointed out. But repeated annual cuts can still add up to a much larger loss over time.
“We are disappointed by the ACC’s decision to discourage solar adoption, keeping meaningful relief for customers and communities out of reach while missing an opportunity to build a more resilient and affordable energy system for Arizona,” reacted Kate Bowman, Vote Solar’s senior west regulatory director, per PV Tech.
For Arizona homeowners still considering solar, timing and system design may matter more than ever. Because current customers are generally locked into the export rate in effect when they apply for interconnection, moving before future cuts could help preserve stronger financial returns.
Homeowners can also look for ways to use more of their solar energy directly rather than exporting it at a lower rate. That may include shifting electricity use to daylight hours, improving home efficiency, or pairing solar with battery storage so more generated power stays on-site.
At the policy level, consumer advocates and solar supporters will likely keep urging regulators to weigh utility concerns against the broader value of rooftop solar.
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