If there’s one constant in the world of utility pricing, it’s change. After all, it was just 2016 when we last wrapped our heads around a new SRP solar plan. Then it was APS’ turn in 2017. With all these shifts, it can be very difficult to unearth the true ROI potential inside any new plan. Fortunately, this is exactly the type of challenge that our engineers really like. We're happy to report that options look pretty good with these latest SRP updates.
As an SRP Preferred Solar Partner, Sun Valley Solar Solutions has spent the last few months collaborating with several of Arizona’s most influential solar companies – as well as our friends at SRP – to negotiate the best possible deal for Arizonans who understand the importance of choosing renewable energy. Now that these new plans are public, we’re excited to share the potential savings opportunities that we see when the right combination of technology is combined with the right rate plan.
As always, we can't possibly explore all the various combinations in the context of this blog. So, if you’d like to find out how your energy profile and solar goals would fit into the new SRP solar landscape, it’s best to contact us for a free, personalized evaluation.
With all that said, here’s a quick summary of what you need to know.
*The summaries above highlight what we believe to be the most important elements of SRP’s new plans and are not intended to be comprehensive of all possible charges. Please visit SRP for a complete breakdown of fees.
1. Existing solar customers remain grandfathered
As it has with every historical rate increase in Arizona, SRP will honor all existing solar contracts. SRP will also allow you to add and alter your system without losing your grandfathering. Battery or more panels? No problem! Plus, grandfathering can be passed to a new buyer if you decide to sell your solar home. And with a new battery rebate in play (see #3 below), now is a great time to think about the next step.
It's also worth noting that SRP’s decision to honor grandfathering is a good reminder that timing is everything when it comes to solar. It’s logical to assume that panel prices will continue going down over time, and indeed they will. On the other hand, incentives – like the 26% federal solar tax credit – are disappearing fast while utility incentives continue to dwindle. By locking in your solar pricing today, you’re more likely to improve ROI and avoid decades of shifting rate plans.
2. New plans drop demand fees, but limit buyback rates to just 2.8 cents
SRP’s E-27 Customer Generation Plan was highly controversial when it rolled out in 2016. It introduced the concept of demand fees—where your highest single 30-minutes of monthly energy use is added to your bill. Fortunately, E-27 retains the popular net metering option (dollar-for-dollar credit for excess solar energy), while also offering some of the lowest kWh rates available in Arizona. So, while scary at first, E-27 has actually turned out to be a very lucrative plan when coupled with the right technologies.
With that said, two of the latest plans drop the demand fee entirely, which is nice for those people who are not interested in monitoring and managing their demand usage. However, on these new plans SRP has dropped the buyback rates for excess solar energy to just 2.8 cents per kWh. The kWh retail rate (what you purchase from SRP) is also slightly higher when compared to E-27. Still, for certain customers, these non-demand plans will pencil quite nicely with an ROI as low as 8 years!
3. Battery rebate boosted to as much as $3,600
Along with the three new solar plans, SRP has decided to double their battery rebate for customers who purchase and install qualifying battery storage systems. This includes Tesla Powerwall battery products, as well as other qualifying brands. Batteries can be integrated into a new solar purchase or installed into existing systems without impacting grandfathering. The 26% federal tax credit – which drops to 22% next year – can also be applied to the battery addition. This incentive is available for up to 4,500 SRP customers on a first come, first served basis through the end of 2020.
4. Savings are quite good…with the right plan
For several weeks, our design teams have been modeling different plans and product combinations to determine the best approach. While it's still too early to offer certainty, it looks like E-27, E-13, and E-14 (if you have an electric vehicle) offer the best ROI potential when combined with the right mixture of technology.
With that said, here’s how we see it:
Go small - Smaller solar arrays require less upfront investment, while at the same time they prioritize offset over bill elimination. By targeting a smaller percentage offset, you consume most or all of your generated solar energy rather than relying on the utility’s buyback credits. For example, a 16-panel system that’s designed to offset 40% of your electric bill will probably offer a much quicker ROI than a 24-panel system targeting 85% of the bill. These are broad strokes, of course, but our analysis tools can develop a custom scenario unique to each home and family.
Add a demand manager - The E-27 plan still offers some of the cheapest kWh rates available in Arizona for those willing to manage their household demand with the combination of solar and a demand manager. As a result, our research shows that E-27 still has the greatest savings potential and quickest ROI on most homes.
Add a battery - Storing your excess energy for use during on-peak hours, or to hedge against demand spikes, is the best way to maximize your solar investment in SRP. Fortunately, SRP is now offering a $3,600 rebate to add a battery to any new or existing solar energy system (double last year’s rebate).
If you've been thinking about making the switch to solar, now is the time to act! With the 26% solar tax credit decreasing again at the end of this year, going solar now will ensure the biggest and fastest return on your solar investment. Contact us today to start your solar project and to lock-in this lucrative solar incentive before it's gone.