Proposed APS incentive cut might spark bigger fight

Installers are in a tough spot. They have a tenuous relationship with APS.

By Patrick O’Grady

Phoenix Business Journal

It seems to be an annual rite of fall that solar installers decry Arizona Public Service Co. going to the Arizona Corporation Commission to pitch lower incentives for the industry.

This year, they might put up a little more of a fight.

Until now, solar installers have been politely telling commissioners the incentive cuts would push them out of business. The challenge is that, even though incentives have dropped from about $3 a watt two years ago to 20 cents today, solar panels still are going up on rooftops at close to the same rates.

There’s a lot going on in the industry to explain that, and most important is the leasing component.

Solar installers, the ones who had the financial connections or wherewithal, began offering leases to keep up their business and keep installations moving after the incentives started dropping. The idea was that the manufacturer or installer would own the system and get guaranteed income from lease payments; federal tax credit money, which represents about a third of the system cost; and whatever local incentives APS had.

But the incentives are getting low enough that those no-money-down leases may start disappearing. Those deals have been the big draw for customers to get solar and guaranteed pricing with no out-of-pocket costs.

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