Earlier this week, Tucson Electric Power (TEP) — the utility service provider for nearly 400,000 customers in southern Arizona — completed its new, 1.6-megawatt (MW) solar photovoltaic (PV) project at the University of Arizona’s Science and Technology Park in southeast Tucson. Today, the utility is using its new solar source as an opportunity to offer its customers a new way to purchase solar power.

The idea behind the reduction is that it will allow TEP to keep the rebate in place through the end of the year.

By December 2010, construction will be completed and the University of Arizona’s TechPark – a solar industry research and demonstration integration center – will play host to a 1.6-megawatt (MW) solar energy system dually built by SOLON Corporation and TEP.

TEP has requested that the Arizona Corporation Commission (ACC) slash the rebate from $3 to $2.25 per watt beginning with rebate applications received after July 7.

Earlier this week, Tucson Electric Power announced that it had signed and submitted multiple power purchasing agreements (PPA’s) to the Arizona Corporation Commission (ACC) for review. If approved, the PPA’s will total 160 megawatts (MW) of renewable energy generating capacity.

TEP, the state’s largest utility, initially gave a discount of $3.00 per watt of installed solar energy capacity, but reduced the incentive to $2.15 a little more than a month ago. Now the utility is bringing the incentive down to $1.95 per watt of installed solar energy capacity.