I helped set up Arizona's rooftop solar energy pricing. Don't mess with a good thing

I served on the Corporation Commission for three years and was among an all-Republican panel that in 2017 issued the groundbreaking “value of solar” decision.

The commission voted 4-1 to implement a structure that annually reduces the price utilities pay for energy from new rooftop solar systems.

Arizona was one of the first states to make this important move. That decision was a delicate compromise that has been a resounding success.

Revisiting that decision now, as some are suggesting, is unnecessary and goes against Arizona’s best interest.

As a conservative, I like that rooftop solar gives customers energy freedom and a choice while introducing competition that benefits everyone.

We made decision to lower the price 10% each year

Nevertheless, in 2017, utilities were paying more than they needed for rooftop solar power. I felt we needed to better protect customers that didn’t have solar to make sure everyone benefited.

That’s why we put in place a system that annually lowers the price paid for energy from new rooftop solar customers, taking the price down 10% every year.

Make no mistake, rooftop solar is already a valuable resource for our utilities and as more new battery storage technology is paired with rooftop solar, we can expect even greater benefits and savings for all.

A recent study by Brattle found that as technologies like batteries and smart thermostats are paired with rooftop solar and other home energy innovations into what are called “virtual power plants,” U.S. utilities and customers will save between $15 billion and $35 billion the next 10 years alone.

We sought to protect rooftop solar industry and its customers

We struck an important balance in 2017. While we wanted to get a better deal for customers without solar, we knew rooftop solar entrepreneurs provided a conservative way for utility customers to save money on electricity while employing thousands of Arizonans.

We certainly didn’t want to wipe out a robust industry developing useful technology.

We knew that hundreds of rooftop solar businesses in Arizona relied on our regulations when they invested money and opened their doors for business. We owed it to them not to make new regulations that ruined businesses. Protecting business and citizen investments is the key and fiscally conservative approach.

Tens of thousands of Arizona residents had made sizable investments in installing solar relying on long standing rules. It was important to me that we not change the rules in the middle of the game harming citizens.

As a result, the commission felt it was essential to grandfather all existing solar customers under the rules in place when they adopted solar. I have no doubt that was the right call.

Since the decision, a lot has changed for the better in the world of solar.

Hindsight indicates utility regulators made the right call

According to an August report from the American Clean Power Association, in the last 12 months alone, 52 new solar manufacturing facilities have been announced in the U.S. shifting panel manufacturing away from China and other countries toward a robust domestic supply.

Furthermore, solar panel recycling is taking off, with a recent report projecting a 623% increase in global market value from just 2022 to 2028. Increasing manufacturing at home and a focus on end of life recycling are great signs for this important industry.

Looking back, there is ample evidence the commission got it right. Most importantly, the price paid for energy from new rooftop solar systems is now plainly a good deal for all customers.

In fact, according to APS, in 2022 it paid an average of $81.13/MWh for all the energy it bought on the wholesale market, while it is now buying energy from new solar customers for less, at just $76.19/MWh. Moreover, the current buy-back rate has declined 40% since 2017.

Also, despite the lower rate, solar jobs have held steady. According to the National Solar Job Census, 8,381 worked in solar in Arizona in 2017. An almost identical 8,337 Arizonans work in solar today.

Revisiting this pivotal decision now creates unnecessary risks for hundreds of thousands of homeowners with rooftop solar while risking investments made by hundreds of businesses serving this important industry around the state.

The decision made seven years ago stands the test of time and the facts clearly back that up.

Andy Tobin is former speaker of the Arizona House of Representatives, a former member of the Arizona Corporation Commission and past director of the Arizona Department of Administration. He is president and owner of Tobin Business Solutions LLC, specializing in business operations and governance.

This article originally appeared on Arizona Republic: Arizona has rooftop solar energy pricing that works. Why fuss with it?