The proposed pilot program is part of APS efforts to meet Arizona’s renewable energy standards, which require that, by 2015, 15 percent of their power come renewable sources. The standards also include a solar carve out requiring that of that 15 percent, a third come from distributed generation, like PV panels.

As reported by The Arizona Republic,

APS officials plan to ask regulators to approve the $14.7 million pilot project so they can see whether it inspires more people to use solar power and also can research how the utility grid operates with many solar systems on the same power line.

If the test succeeds, APS wants to offer the program throughout its area.

APS will own and maintain the solar panels, and customers will get a discount on their bills based on how much electricity the systems are expected to produce.

Now, this sounds a lot like a power purchase agreement (PPA) except that APS does not plan to require a down payment to participate in the program. So let me see if I get this straight: The APS customer signs up for the free solar panel program. APS installs the panels on their roof. Each month, they save money on their electricity bill. Unless I’m missing something, customers have nothing to lose and everything to gain from this program. In fact, if the pilot goes through, I’m dropping everything and moving to Flagstaff to get in on the action.

There is one last detail: program participants won’t immediately see the effects of the “discounted rate” for electricity. As APS foresees it, each solar panel system will offset by about half the homeowner’s electricity use. As far as I can discern, the particpants will still be paying the APS full rate to meet the other half of their electricity needs. But, as electricity prices rise over time, this price inflation will only affect half their demand. As is the case with all solar panel systems, the customers will be effectively “locking in” a fixed rate for a portion of their electricity consumption.

Here’s The Arizona Republic again:

Each solar system will generate about half the amount of electricity a home that size uses in a year, and the participating customers will get to lock in the price of that power for 20 years, said Barbara Lockwood, APS renewable-energy manager.

That means that whenever APS raises rates, the increase will apply to only half the solar customers’ bills, while non-solar customers will see rate hikes applied to their entire bills.

What do you guys think? Too good to be true?

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