Timely Analysis of Residential Solar Minimizes Market Disruptions

Challenge:

The Arizona Public Service Company (APS) has encouraged growth of renewable energy in Arizona through direct consumer rebates since 2002, swiftly becoming a leader in the grid-connected residential photovoltaic (PV) and solar hot water markets. Participation in APS’s Renewable Energy Incentive Program (REIP) grew by 100% in 2008 and again in 2009. However, APS had not established a mechanism for reducing program incentives as the market grew. As a result, they were in danger of depleting incentive funds, which could have stunted consumer demand and market growth.

Solution:

In 2010, APS hired VEIC to conduct a rapid analysis of residential solar incentives, and to make recommendations for immediate actions so as to eliminate or minimize market disruptions.

By analyzing the program demographics, market conditions, and customer economics (with existing and modified incentives), VEIC established a baseline level of participation and projected trends. Based on this analysis, and through comparison with six similar markets, VEIC provided specific recommendations and justifications for incentive restructuring.

Results:

  • Provided recommendations for minimizing potential market disruptions
  • Established an analytic framework for changes to incentive level
  • Encouraged continued participation in Arizona’s growing renewable energy market