The CEO of SolarCity, Lyndon Rive, has accused a major Arizona utility of punishing new solar customers with an unjustifiable pricing plan in order to maintain its conventional energy monopoly.
Beginning in April, Arizona residents that install solar panels will be hit with a “demand charge” based on their peak power demand during the month. According to ThinkProgress, this additional utility charge will equal about $50 per month. The charge was heavily supported by Salt River Project (SRP), one of the nation’s largest public power utilities, which claims the additional fee is necessary to cover the utility’s infrastructure and maintenance costs.
About 500 protesters gathered at the site of an SRP meeting last week in Tempe, Arizona to protest the new charge – as well as a new 3.9 percent rate increase that will affect all utility customers – but both measures were ultimately passed by SRP’s board.
In an open letter to the president of SRP, Rive said the new charge is “unsupportable by any economic analysis” and entirely punitive to solar customers.
“It is impossible to see the plan as anything but an effort to eliminate the consumer choice offered by solar leasing companies,” Rive wrote, “and maintain SRP’s monopoly power. Both the evidence SRP has provided in response to our information requests and the discriminatory nature of the plan itself confirm that SRP is acting to eliminate the choice offered by distributed solar, and not in response to any legitimate cost-based concern.”
Arizona currently ranks second in the nation in installed solar electricity capacity, after California. According to the Solar Energy Industries Association, Arizona’s 700.7 megawatts of solar power saved the state enough water to fill 25,000 swimming pools in 2014.
And solar is only getting cheaper around the country. Improved technology, higher demand and the federal solar investment tax credit all contributed to the solar industry growing 21 percent in 2014.
Solar advocates claim that traditional utilities like SRP are levying trumped-up infrastructure charges on their customers out of fear that decentralized power will destroy their profits.
In his letter, Rive says that “the destructive effect of the proposed price plan is already quite clear.” Last year, he claims, SRP received an average of almost 500 solar applications per month. Yet after SRP proposed its new charge, the utility received only 20 applications.
“Customers are smart,” Rive wrote. “A 96 percent drop in demand is compelling evidence that the price plan is an unabashed penalty on customers who want to go solar and a deliberate effort to stop new solar installations in SRP’s territory. Customers know the new plan leaves them with no real choice.”
Rive said that SolarCity, America’s largest solar energy provider, is currently considering suing SRP. While acknowledging that litigation is not SolarCity’s preferred method of fixing the issue, Rive warns the company “cannot and will not stand idly by while SRP entrenches its monopoly by unjustifiably penalizing solar customers and shuttering the solar industry in one of the sunniest places in the United States.”
There does seem to be a small relief for the state’s current solar users, however. The Arizona Republic reports that Arizona’s current 15,000 solar users (and those who signed solar contracts before December 8) will be allowed to keep their current rates for 20 years.