Friday, June 14

One of Arizona’s Largest Rooftop Solar Companies Relocates 85 Workers to Other States

Across the United States, many homeowners are investing in one of the biggest advances in roof technology: solar panels. Installing solar panels on your roof not only reduces reliance on traditional utilities, but can also increase your home’s value. After all, a new roof even without solar technology can yield a return on investment of up to 75%, and solar panels are just as effective. However, thanks to a recent increase in solar rates, one of the largest rooftop solar installers in Arizona says it is relocating at least 85 of its 900 Arizona workers out of state, and more may follow.

On Wednesday, April 29, the CEO of SolarCity, Lyndon Rive, announced that the solar rate fees approved by the Salt River Project in February are too restrictive, hampering the potential for nearly all of their customers to save money with solar energy. As a result, he commented that despite Arizona’s sunny climate, the state is falling behind when it comes to this environmentally friendly rooftop technology. Rive reported that while solar capacity is doubling in every other state where SolarCity does business, Arizona is inexplicably shrinking.

For this reason, Rives said that the company met with 275 installers in its five Phoenix offices in late April, offering relocation packages to other states where SolarCity is thriving. As of April 29, 85 employees had accepted the opportunity. Unfortunately, while Rives said that more transfers could come from the company’s sales department, layoffs could be a possibility based on how business proceeds for the rest of the year.

The current situation at SolarCity, one of Arizona’s largest rooftop solar panel installers, is reportedly connected to Salt River Project’s new rate plan for any new customers installing solar panels, which was approved in February. Under the new plan, homeowners will pay a monthly “demand charge” based on their highest 30-minute average demand for power from the grid during peak hours. Salt River Project estimates that these charges would average $80 a month for the average solar customer with a peak demand of about 8.5 kilowatts each month, but say that the fee could be as low as $32 for a customer with a peak demand of four kilowatts. Meanwhile, a 14-kilowatt demand during peak hours could call for a payment as high as $200 for the month.

However, under the new plan, solar customers will also pay less for any power they take from the utility, at a rate of about four cents per kilowatt-hour, as opposed to about 10 cents on most residential solar rate plans. Unfortunately, this discount also applies to the value of the power solar customers send back to the grid for credit, reducing their returns. Since the plan was implemented, only 61 Salt River Project customers have applied to install solar before the December 8 deadline that will allow homeowners to avoid the new fees. Before the approval, several hundred customers were installing solar panels each month.

Rive says that this problem is only compounded by Arizona’s power structure: the state not only offers a relatively low cost for electricity, but the Arizona Public Service Co. also added a fee of about $5 last year for solar customers. As a result, SolarCity’s profit margins in the Grand Canyon State are low, and shifting resources to other states will only increase its workload in areas with higher margins. For this reason, Rive says the move won’t hurt SolarCity’s finances and will likely be a financially better choice for the company.

Most of SolarCity’s workers will reportedly transfer to California, but the company is also expanding into several new markets, including New Hampshire. Rives said that he believes it is unlikely that other states will follow Salt River Project’s decision to charge higher fees for solar, as other areas have public commissions and other safeguards to review rates. Meanwhile, in Arizona, a few companies have attempted to garner attention in SolarCity’s former areas by promising to offset demand charges by pairing batteries with solar panels. However, while SolarCity says they have tested solar arrays with batteries in California, Rive has refused to make a business case for working in Salt River Project’s territory, or even in Arizona.

“Arizona is the most hostile state to operate our business in the country,” he told the Arizona Republic. “Which is strange, because Arizona is known as a business-friendly state.”

Leave a Reply