On July 12th, 2012, SolMarket hosted a webinar on the status and conditions of the Arizona solar market. Yuri Horwitz, CEO and President of Sol Systems, moderated the event with presentations from:

  • Court Rich, Senior Partner & Co-Chair of the Renewable Energy Department at Rose Law Group
  • Gary Ellars: Leader of Renewable Incentive Administration at Arizona Public Service (APS)
  • Marc Romito: Manager of Renewable Energy Resources at Tucson Electric Power (TEP)

The webinar illustrated that Arizona market shows a lot of promise, but contains a lot of uncertainty beyond 2013. As Court Rich explained, solar PV has the potential to go incentive-free within the next couple of years and there is bipartisan political support. Rich also noted that the school and government sectors have shown the largest amount of growth, stemming from their lack of Arizona Corporation Commission regulation.  However,  we also learned that major Arizona utilities have already largely met their solar targets and are now awaiting further direction from the ACC, which means that no one knows what the future of solar looks like in Arizona.

Gary Ellars and Marc Romito provided informative updates on the production-based incentives (“PBIs”)and upfront incentives (“UFIs”) solar programs offered by APS and TEP. These solar programs and their respective budgets are outlined in this chart.

APS offers a variety of upfront and production-based incentives. There are different programs and budgets for grid-tied vs. off-grid systems, and for residential, non-residential, and government/school systems. In general, smaller systems (residential and small commercial) qualify for upfront incentives, while larger systems qualify for production based incentives.  APS also has different PBIs based on the length of the SREC agreement.

Gary Ellars reported a favorable budget environment, with PBI funds between $3 million and $32 million for Fiscal Year 2012. Residential UFIs, however, are on schedule to hit the August 1st 90% capacity trigger, which would reduce the pricing from $0.50/watt to $0.20/watt. The application deadlines occur in August, October, and December, and each have their own funding pools, triggers, and restrictions. APS government and school programs have 15 year and 20 year PBI offtake agreements with a 2 MW project size cap.

Like APS, TEP has specific budgets for residential and non-residential systems and UFIs are only offered for smaller systems (residential and non-residential systems smaller than 70 kW) while PBIs are available for non-residential systems. However, TEP is different than APS in that it only offers incentives for grid-tied systems.

TEP’s programs also differ from APS in that TEP’s PBIs are determined by the system size rather than the length of the offtake agreement. In TEP territory, UFI and PBI budgets are shared from the same pool, with $1,647,366 remaining of $3 million (as of July 12th 2012).

Gary Ellars and Marc Romito both suggest applying early to any sort of incentive program.

If you were unable to attend the webinar, the presentation slides and audio are available at solmarket.com/events.

About Sol Systems

Sol Systems is a solar finance firm and a leader in financial innovation in the renewable energy industry. Since its inception in 2008, Sol Systems has partnered with 350 installers and developers to bring over 3,000 solar projects from conception to completion by offering innovative financing solutions for residential, commercial, and utility-scale projects.

Sol Systems’ financing programs catalyze investments for a broad set of solar projects by simplifying their origination, diligence, and financing processes. Developers seeking financing for projects can access over $2.5 billion in capital through the Sol Systems investor network.

In addition to providing financing, Sol Systems also offers project due diligence, deal structuring, and asset management services – all designed to reduce overhead and transaction costs and quicken project development timelines.

For more information, please visit www.solsystemscompany.com.

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