The Arizona Corporation Commission voted 4-1 to restructure how distributed generation (DG) is paid for in Arizona, which will boost renewable energy technologies while providing equity to all customers.

The decision to replace net metering protects existing customers while restructuring the methods used to determine a fair rate for the future.

“Existing solar customers can rest assured that their investment is safe,” Commissioner Andy Tobin said. “Our decision recognizes those customers while taking the next step by determining rates which take into account advancements in solar and other renewable technology which helps us push forward proactively.”

The decision follows a lengthy investigation over the value and cost of solar energy. The study involved input from solar and utility companies, customers and consumer advocates.

"A little over a year ago, I proposed that the Arizona Commission finally address the questions associated with the value and costs associated with distributed generation in a full evidentiary proceeding,” ACC Chairman Doug Little said. “I believed that we needed to invest the time and energy to create a factual record that would form a basis for thoughtful analysis of the issues and help us find real solutions to the questions that have bedeviled the rooftop solar conversation in Arizona for over three years. In passing this policy, we have accomplished something historic. ... The issues are far too complex and divergent to reach a decision that will satisfy everyone, but I believe that we have worked very hard to find a reasonable balance. We now have a meaningful first step that we can build on in the future."

Using the net-metering system put into place in 2009, customers receive full retail credit for the power they generate and can sell back the excess at wholesale. This will be grandfathered into the new system for existing customers. The new methods will take into account wholesale rates, or the rates utilities pay for solar energy from large plants.