Arizona Implements a Controversial and Ineffective Community Solar Policy

March 9, 2023
The Arizona Corporation Commission adopted a community solar policy that diverges significantly from stakeholder suggestions and established best practices, thereby hindering the development of a competitive community solar market in the state.
Photo by Big Shot Theory
  • Arizona Corporation Commission's new community solar policy, adopted on March 7, 2023, has been criticized for ignoring stakeholder suggestions and not promoting community solar development effectively.
  • The policy's compensation strategy for community solar subscribers, which uses the utility’s avoided cost rate, fails to recognize the unique benefits of distributed solar and adds uncertainty to the market.
  • Arizona attempts to address low-income access by mandating that at least half of each project's subscription capacity is allocated to low- to moderate-income ratepayers, but offers no support for developers to manage this requirement.
  • The policy includes prohibitive components, such as making utility participation optional, requiring community solar gardens to compete in RFP processes, and allowing utilities to curtail power from community solar gardens without obligation to purchase it.
  • Critics argue that the policy's design, which forces community solar developers into unfavorable conditions without guaranteed utility purchase agreements, will not attract investment or foster a competitive community solar market in Arizona.
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