Arizona Solar Center

Arizona Corporation Commission- MODIFICATIONS TO THE ARIZONA CORPORATION COMMISSION'S ENERGY RULES

On May 26th 2021, the Arizona Corporation Commission reconsidered and passed a Clean Energy Rules package. The energy rules package includes 100% carbon-free energy in Arizona by 2070. And the carbon reductions are requirements and not goals.

Revised carbon emissions reductions levels by the following:
• 50% by December 31, 2032
• 65% by December 31, 2040
• 80% by December 31, 2050
• 95% by December 31, 2060
• 100% by December 31, 2070

Most importantly, the passed rules retained all the beneficial policies and requirements around storage and distributed storage. Specifically, the rules include a 35% energy efficiency requirement, which is the nation’s first distributed storage/solar requirement, preferential treatment for energy procurement from coal-impacted communities and tribes, as well as a complete rewrite of the IRP rules that will require the Commission to approve, rather than acknowledge a preferred portfolio of resources.

This is not yet final, as a result of substantive changes made to the original Recommended Opinion and Order, the amended energy rules package will be sent back through the formal rulemaking process. An updated schedule will be implemented that will allow for written comments and public comment on the record. Interested parties can submit formal written comments to the docket beginning July 9, 2021 through August 20, 2021. Public comment sessions will be held on August 16 and 19, 2021, at 10am.

The passage of the Energy Rules as they presently stand reflects a significant win for ratepayers, for the people of Arizona and for the Solar Energy Industry.

The Nature Conservancy has submitted their report "Arizona Thrives - A Path to a Healthy and Prosperous Future" to the ACC. Interesting.

APS has submitted their report, The Solar Center has slightly reformatted this report by rotating the pages for easier viewing. APS has provided two presentations to address the ACC questions. Worth a read.

Economics of Solar Hot Water

Updated Feb. 16, 2014

Solar energy can provide all normal domestic water needs. Backup may be required for cloudy days.

Initial investment is in the $4,000 - $7,000 range, though some systems, cost less. State tax credits (25% of the purchase price with a maximum of $1,000 per installation) and, federal tax credits (30%) and in some cases utility rebates, can reduce initial costs significantly. If conventional heaters need replacement, initial costs are further lowered by the cost of the conventional unit.

How much money you save versus a traditional water heater depends on a number of factors:

The amount of hot water you use Your system's performance Your geographic location and solar resource Available financing and incentives The cost of conventional fuels (natural gas, oil, and electricity) The cost of the fuel you use for your backup water heating system, if you have one.

On average, if you install a solar water heater, your water heating bills should drop 50%–80%.

Costs and payback periods for residential SWH systems with savings of 200 kWh/month
System cost	After tax credits/rebates	Electricity cost/kWh	Electricity saving/month	Payback period
$5000	$1540	11.2 cents per kWh	$22.40	5.7 years

If you're building a new home or refinancing, the economics are even more attractive. Including the price of a solar water heater in a new 30-year mortgage usually amounts to between $13 and $20 per month. The federal income tax deduction for mortgage interest attributable to the solar system reduces that by about $3–$5 per month. So if your fuel savings are more than $15 per month, the solar investment is profitable immediately. On a monthly basis, you're saving more than you're paying.

References

Economics of Photovoltaics

Updated November 27, 2019

Introduction

PV arrays can be used to generate electric power for many end-uses including utility-scale PV projects, or in distributed applications such as homes, cabins, businesses, telecommunication equipment, lighting, and other electrical equipment.

The economics of utility-scale PV projects (solar farms) is difficult to discern given the small and diverse sample of projects and the proprietary nature of third-party contracts. However, the economics of distributed PV systems is well-known. The financial-side of distributed PV is determined by the capital and operating costs and will vary according to the type of PV power system; off-grid and grid connected.

Off Grid PV

Off-grid PV systems in Arizona are cost competitive with electric utilities in situations requiring utility line extension at high-cost (generally for extensions of over 0.5 miles, charged to the customer), and in situations requiring low amounts of power (irrigation control equipment, small lights, etc.) for which the minimum utility charges exceed the amortized cost of the PV system.

Like solar in general, the capital (initial) costs of off-grid PV systems have been falling in recent years; they currently are between $1 and $3 per peak watt of the PV module, less if rebates and tax credits are available. Storage batteries with related charge controllers cost about the same, but until newer battery technology is in volumn production, costs are rising. Off-grid systems are typically combined with energy efficiency measures to make sure the solar electricity is not going to waste. When designing an off-grid system a quick-rule to follow is that for every dollar spent on energy efficiency measures will save $5 or more on solar generating equipment.

A small house (or larger house with extensive energy efficiency improvements) with a low usage can function with an off-grid PV system as small as 2 kW (peak), thus would call for a capital outlay of $10,000 to $16,000 (before any incentives). Assuming a 20-year simple amortization, this would be equivalent to about 10-20 cents per kWh. Such a unit can supply power for many appliances (refrigerators-freezers, computers, televisions, consumer electronics, etc.) and many lighting systems. It will not provide power for air conditioning or other large energy consuming appliances like clothes dryers or electric ovens. Comparable costs for alternatively home generated power vary but are typically significantly more than the solar alternative.

PV power costs for uses that do not require batteries, such as agricultural water pumping and pool pumps, are substantially lower than off-grid residential systems that include batteries.

Grid Connected PV

While solar has a ways to go to compete with conventional power plant generation costs at 4-6 cents/kWh, it is much closer to grid-parity when compared to the cost of electricity charged to residential, commercial and industrial consumers. This is especially relevant because when the PV is sited at the consumers' premises, then the customer is comparing the cost of PV electricity to the cost of the utility retail power, not to the cost of power generation.

Grid connected PV systems can be of two types, customer-owned or third-party owned (leased).

Leasing a solar electricity system is similar to leasing a car with the biggest exception being the contract terms are much longer in length for solar (typically 15 to 20 years). However, like a car lease, you pay a monthly fee to use the system over a specified period of time. The property owner benefits from the electricity produced by the system. Ideally, the cost of the monthly lease payment is less than the cost of the utility supplied-electricity that is offset by the solar system.

A customer-owned system is not cost-effective compared to utility electric power, but when combined with other considerations become more attractive and economical. Government subsidies, tax rebates/exemptions, the time of day value of summertime PV power, the enhanced value of "Green" power to a utility, etc. can and have made PV systems practical in Arizona.

Net Metering

The value of a PV system's electricity will depend on how much you pay your utility for electricity and how much your utility will pay you for any excess that you generate. The average cost of electricity from Arizona utilities is displayed on the chart below. Net metering is the mechanism by which Arizona utilities pay customers for any excess solar electricity they generate. The Arizona Corporation Commission allows for a kilowatt-hour (kWh) credit at the utility's retail rate for each solar kWh not used by the customer and fed back into the grid. The net metering described in this paragraph and the next paragraph is no longer offered by most Arizona utilities, but existing net metering customers are grandfathered. At the end of each month any net excess solar generation is carried over to the customer's next bill. Any remaining credits on the customer's last monthly bill on an annual basis will be paid to the customer, via check or billing credit, at the utility's avoided cost payment.

This net metering arrangement was implemented as a way to help encourage PV system interconnection. It allows system-owners to offset some of the costs of purchased electric power by selling surplus electric power back to the utility. In an Off-Grid situation this excess power is typically stored in a battery bank for later use, but in a grid connected system with net metering, the excess power can be "sold" to the utility for use by other customers, and is generally an offset to the purchased power (such as night-time use).

Net metering rules differ among Arizona electric utilities. It is necessary to check with the utility serving a specific address to determine what rules apply for net metering customers in their service territory. See the article on Arizona Electric Utility Information for more detailed information.

For the last several years Lawrence Berkeley National Laboratory (LBNL) has published an annual 'Tracking the Sun' report that summarizes installed prices and other trends among grid-connected, distributed solar photovoltaic (PV) systems in the United States. The 2019 report is now available: Tracking the Sun 2019.

Economics of Passive Solar

Updated December 29, 2013

Solar energy is harnessed, converted and distributed using a range of ever-evolving technologies and strategies. Passive solar energy is characterized by building orientation, strategies that integrate the house with its climatic environment, and materials that have favorable thermal mass.

Although passive solar building principles are based on science and a variety of lessons learned through the years – they aren’t necessarily expensive. Passive solar construction costs can vary from no additional cost, to a little more than conventional construction to considerably more. Many forms of passive solar energy are economical because of the large savings of utility bills that can be achieved - typically in the 50 percent to 70 percent range.

Unlike “traditional” construction, it takes more thought to design with the sun’s location in mind; however, passive solar features such as additional south-facing windows, added thermal mass, larger roof overhangs, or other shading features can easily pay for themselves. In fact some modest passive solar designs like sun tempering, a design fit for cold climates, can reduce heating costs from 5 percent to 25 percent at no added cost to the construction budget.

Since passive solar designs require substantially less mechanical heating and cooling capacity, costs of the design can be offset by reduced unit size, and by reduced installation, operation, and maintenance costs. Overall, passive solar homes are often less expensive for the homeowner when the lower annual energy and maintenance costs are factored in over the life of the building.

If you are designing a new home, consider passive solar design as it is usually much more cost-effective to reduce energy use with passive solar design than it is to pay for that energy use with other forms of energy (including solar electricity).

For more information:

Passive Solar Case Study (by U.S. Department of Energy) – General Daylighting

Daylighting—the use of windows or skylights for natural lighting and temperature regulation—is one passive solar building strategy that can save money for homeowners and businesses.

Passive Solar Case Study (by Homes Across America Program) -- Harmony Home, Flagstaff, AZ (Cost -- $200 per square foot)

Orientation for Solar Energy Systems: The home was oriented to capture maximum solar gain to the south while maintaining views to the north.
Orientation for Daylighting: The orientation of this single-story home with the long edge toward south and careful placement of rooms (with eastern windows) within provides ample daylighting throughout. The daylighting requirements are practically zero during daylight hours.
Window Sizing, Location and Shading: A conflict between solar gain to the south and great views to the north was overcome with design, which carefully placed rooms to ensure all had a view as well as solar exposure. Maximum windows were installed on the southern side of the home. Windows on the north were minimized but placement allows the view to be seen from any point in a room. A roof overhang was selected to block excessive summer sun from the windows, while allowing winter sun to enter the home.
Thermal Mass: Heat radiates from the colored concrete floors (with tile inlay), which provide thermal mass to complete the passive solar design.

Passive Solar Case Study (by Homes Across America Program) – Hopi Nation Straw Bale House, Hotevilla, AZ (Cost -- $60 per square foot)

Straw Bale: An affordable and energy-efficient building material.
Thermal Mass: A radiant floor heating system in the slab is augmented by passive solar. The slab acts as a thermal mass.

Passive Solar Case Study (by Homes Across America Program) – Southwest Solar, Prescott, AZ (Cost -- $175 per square foot)

Building Envelope: This home/office was built into the hillside and uses the earth to insulate against heat and cold. A well-insulated roof reduces heating in summer while conserving heat in the winter.
Thermal Mass: The passive/active space heating and cooling utilizes 300 tons of building mass as heat/cool storage. The mass is created using poured earth walls that utilize local soils.
Attached Solar Greenhouse: A solar greenhouse heats the main living area from below while providing an environment for growing food.

Passive Solar Case Study (by Homes Across America Program) – The S.E.E.D. (The Super Energy Efficient Design) Home, Tucson, AZ (Cost -- $150 per square foot)

Structural Framing: Exterior walls and roof are made of polyurethane foam core SIPS (structural insulated panels). This allows for solid and continuous foam core resulting in an R34 exterior wall. The roof is an R41.
Roof: Standard Built Up Roofing system with Energy Star rated white roof coating.

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