Big changes are in store for Arizonans who put solar panels on their homes. This week, regulators voted to change how those customers are compensated for the power they produce. Many in the solar industry say the decision could stall the growth of this technology in Arizona, which is one of the top markets in the country.

Supporters of rooftop solar say Arizona regulators have dealt a setback to the state’s growing market.

On Tuesday, the Arizona Corporation Commission voted to dramatically reduce how much new solar customers will get reimbursed for the power they send back to the grid, known as net-metering. That rate will be gradually brought down and, at least initially, modeled on what utilities pay large-scale solar farms, rather than the retail rate.

Louis Woofenden who works for the Tucson-based company Net Zero Solar said his sales pitch is about to get tougher because when new solar customers come online, their rates will only be guaranteed for ten years.

“Ten years is often a psychological point where people are willing to invest their money if they’re going to get it back in that time. But if they don’t know what’s going to happen beyond ten years, that can sometimes be a tough value proposition for a consumer.”

The Alliance for Solar Choice, a group that includes major rooftop-solar leasing companies, issued a statement saying it was "deeply disappointed that the Arizona Corporation Commission disregarded the full, long-term value that rooftop solar brings to Arizona and the long-term certainty that Arizonans need when contemplating a solar investment."

"It feels like a lot of the testimony and the public comment was ignored by this decision," Kris Mayes of Solar Strong America said. "There was very little in the way of actually valuing the aspects of rooftop solar, including how it saves water, money for ratepayers and the other societal values."

Mayes, a former corporation commissioner, said the bright spot was that existing solar customers will be grandfathered for twenty years. She also believes that the commissioners can change some of these decisions in the context of a rate case, such as the ten year grandfathering for new solar customers.

"They can do whatever they want in a rate case and they are not bound by this decision, but this decision is obviously going to be a major guiding force in the course of these rate cases," Mayes said.

Arizona’s largest utility APS applauded the decision because it will deal with the growing cost shift onto non-solar customers. A statement from the company said it "enables solar to flourish and grow in Arizona, partly because it balances the economic benefits of grid-scale solar — which provides clean power to all of our customers at far less cost — with the desire of some customers to install solar on their rooftops."

In a statement, Commissioner Bob Burns, the only dissenting vote, said "future solar customers should have their solar export rate grandfathered for 20 years, not 10 years, just like what was approved for existing customers."

Chairman Doug Little said the decision couldn't "satisfy everyone," but that they protected "the investment of existing rooftop solar customers, making sure that we do not change the rules on them in the middle of the game."  

How this all shakes out is still uncertain. The actual numbers won’t be nailed down until the commission sets new rates for many Arizona customers next year.