Some Arizonans Face Rising Power Bills and a New Fee for Going Solar

Energy bills are going up in Arizona, and not just because air conditioners are about to start working harder.

Thanks to an electricity rate hike approved Feb. 22, utility customers of the Arizona Public Service Company will see their bills rise about 8%, or $10 per month for the typical customer, according to APS. One member of the Arizona Corporation Commission, which approved the plan, told reporters that the actual cost to customers wasn't entirely clear, but that it should be very close to 8%. APS serves a large geographic area, including much of the Phoenix area.

Also new: a charge for utility customers with rooftop solar panels in the APS service area. The charge will be between two and three dollars per month for a 10 kilowatt system, according to APS's website.

The fee applies to all solar customers, including those who decided to go solar when the rules were different. That's not always the case. Changes to California's solar policies triggered a flood of installations as homeowners rushed to lock in the sunsetting, more favorable terms.

A utility backlash to solar

This isn't the only time additional fees on solar customers have been considered by utility commissions. The California Public Utility Commission removed a proposed fixed fee from its 2022 decision on the state's net metering policies. (Though that policy still reduced the number of new solar customers in the state by 75%, according to some estimates.)

Alabama Power levies a monthly fee of up to $5.41 per kilowatt of solar installed, or $54 for a 10 kilowatt system.

APS said the new fees for solar customers were necessary to "better align rates with the cost of service," though solar proponents say rooftop solar typically benefits the grid and doesn't increase costs for non-solar customers.

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With new policies making it more difficult to go solar, how do you know when you should?

How to calculate your savings

Whether it makes sense to go solar depends on the cost of solar near you, your energy usage, your electricity rate and your home's solar potential. All of that really boils down to how much solar costs you versus how much it can save you.

Considering Solar Panels?

Our email course will walk you through how to go solar

 

To calculate how long it will take your solar panels to pay themselves off, total up the cost of your solar panels including the initial cost and any fees your utility charges you. Divide that by your monthly savings, which will include the electricity you avoid buying and any additional compensation you get from sending solar power back to the grid. That gives you the number of months it will take to earn back your investment.

The new rate and fees for APS add to the cost: between $2 and $3 a month, or $24 and $36 a year, according to the utility's estimates. 

On the other hand, more expensive energy might actually improve your case for going solar, since you'll be avoiding a higher cost of electricity from the grid.

If it doesn't make sense to go solar, you might save money on your electric bill in other ways. If you can shift your energy use away from certain peak hours, you might be able to save by choosing a time of use plan with your utility. APS offers fixed and time-of-use rate plans.

Regardless of your electricity rate, you can save by reducing how much electricity you use. Simply unplugging energy hungry devices, weatherstripping your windows and doors, programming your smart thermostat or using smart plugs can help eliminate some wasted energy.

Unlike some states, you don't have a choice of electric provider in Arizona. But if you see rate hikes on your bill and you live in a state that does allow for a choice, you might be able to find a better deal from another supplier (but keep an eye on the terms and conditions).