Frequently asked questions about SRP's commercial solar electric program
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SRP requires that all customers that will interconnect their solar electric system to SRP's electrical distribution system sign an agreement that outlines the interconnection rules and requirements.
You can use the sun to produce energy. By installing a solar electric system, you will also be helping to protect the environment because you will be using a clean renewable energy to power your business.
Arizona currently offers a tax credit equivalent to 10% of the system cost, capped at $25,000 per business, regardless of the number of energy devices installed. The federal tax credit is 30% of the cost. These credits are obtained through your annual tax process. SRP recommends that you contact your tax professional with any further questions on these tax credits and whether you are eligible to take advantage of them.
Prior to installing a solar electric system, please consider the following:
- Contractor selection. As with any business improvement project, its ultimate success is dependent on choosing the right contractor. Get advice to help you make an educated choice.
- System type. There are different types of systems and costs can vary widely among contractors. You should research the system types available so that you ultimately select the best type for your business.
- Maintenance. Solar electric systems will require ongoing maintenance, so know the system's recommended maintenance schedule and take these costs into consideration when selecting your system type.
- Panel location. You should consider factors that will impact the sun's ability to shine on the panels including shading from obstructions (such as trees), the tilt angle of the panels and the direction the panels are facing. For example, southern exposure may produce more energy, but western exposure may produce later in the day. Systems with multiple tilts or orientations can hinder production.
- Mounting. The method of mounting for some systems could impact roof warranties and insurance policies.
First, you need to consider how much of your total electricity usage you would like to be produced from a solar electric system. It is a good idea to have a 12-month usage history and an idea of how much money you have budgeted for a solar electric system and your remaining electricity bill. A solar contractor can help you select a system that will meet your needs and our program requirements.
Typically, solar electric systems produce 1,700 kilowatt-hours (kWh) per year per kilowatt (kW) rating of the system. For example, a 50 kW system can produce up to 85,000 kWh per year. System output will ultimately vary depending on the type of components installed and the system's orientation in relation to the sun.
The typical roof space required for a solar electric system is approximately 100 square feet per kW-DC rating of the system. For example, a 50 kW system will require 5,000 square feet of unobstructed roof space. The amount of roof space required may vary depending on the type of solar panel installed and its tilt angle. Additionally, new fire code regulations in some jurisdictions require specific easements for safe passage of fire fighters in the event of a fire at the home.
Because your business is connected to SRP's electric grid, you will continue to receive energy from SRP when there is no sunlight or when the energy generated by your solar electric system is not enough to offset your energy usage.
With proper maintenance, most systems should last at least 20 years. Your contractor should provide you with a comprehensive maintenance plan based on the manufacturer's recommendation for your system type.
At a minimum, your solar electric system must have the following warranties to qualify for SRP's solar incentive program:
- Modules. The modules must have a performance warranty from the manufacturer that protects against the electrical output of the unit degrading more than 10% over a 10-year period, and more than 20% over a 20-year period.
- Inverters. Inverters must have a 10-year warranty provided by the equipment manufacturer that protects against defect or component breakdown.
- Installation. The installer must provide a 5-year warranty that protects against defects in the overall installation of the solar electric system that degrades the electrical output of the overall system by more than 15%. In addition, the installer must provide a 2-year warranty that covers roof penetration leaks. These installation warranties also must provide for no-cost repair or replacement of affected components, including any associated labor that is not otherwise provided by the manufacturer, during the warranty period.
Before deciding to enter into a lease contract, you should review the contract in detail to determine if the requirements within the lease match with your expectations, both financially and as they relate to what you hope to get out of your solar electric system. A lease is a legal obligation and long-term contract. Here are some things to consider and ask while reviewing a lease contract:
- How long will you stay at your current location? A solar lease can be a long-term agreement (20 years or more in many cases). Changes such as relocation and financial status may dictate a move within that timeframe. You should understand the financial impacts that will result if you terminate the lease early. Some leases may hold you in default under the contract if you terminate your lease early.
- What if you need to sell or relocate your business within the lease term? You may be committing to lease payments for the term of the lease. If you decide to relocate or sell, you may still be obligated to those lease payments, or other additional expenses, under certain circumstances. The lease should specify your obligations for this situation.
- What are your obligations as they relate to operating and maintaining the system? Lease agreements should specify who is ultimately responsible for operating and maintaining the system. You need to make sure you understand your obligations and the costs associated with those obligations. Ask these important questions:
- If your system needs repair, who pays for it?
- Are you responsible for insurance, and if so, how much will that cost?
- If the system isn't working for some period of time, are you still responsible for the lease payments?
- Does this make financial sense? You need to analyze whether or not you will save money in the long run given the terms of the lease contract. Make sure you take the anticipated system production into consideration along with your most recent 12-month usage history. This should give you an indication of how much money you could save versus the cost of the lease payment, remaining electricity costs and any additional costs realized at the end of the lease term.
- What happens when the lease term ends? You need to understand who is responsible for removing the system if you choose to do so at the end of the lease term. If you do remove the system, you also need to understand who will be responsible for any associated roof repairs.
A properly licensed contractor must install the solar electric system to ensure it complies with all applicable building codes and SRP program requirements. SRP does not install solar electric systems, nor do we promote or partner with individual contractors for business solar installations. The following solar interest groups do provide lists of solar electric contractors that you can contact for more information:
In order to qualify for the incentive, the installer must have the appropriate license from the Arizona Registrar of Contractors. The installer represents the company that is actually installing the system on your business. Installers must have one of the following license types: L-11 or K-11. If the contractor can show that the scope of work associated with their license application includes a solar electric installation component, the following licenses will be accepted: L-05 or K-05.
Please visit the Arizona Registrar of Contractors' website or call them toll free at (888) 271-9286 to verify the validity of the contractor's license.
SRP will install a second meter to monitor the energy production from your solar electric system. This information will be available via a report that is included with your monthly bill.
Commercial solar customers can elect the Standard (E-36), Time-of-Use (E-32), Secondary Large General Service (E-61), Primary Large General Service (E-63), Substation Large General Service (E-65), or Substation Large General Service with Instantaneously Interruptible Load (E-66) price plan depending on which plan is the best fit for you. All other price plans are not compatible with solar, and cannot be used in conjunction with a solar electric system installation.
Yes. You will still get an electric bill from SRP if your business is attached to SRP's electric grid. There will be portions of the day when your system will not be able to produce energy due to lack of sun or when the energy generated by your solar system is not enough to offset your energy usage. In those instances, your business will still receive power from SRP as it did before you installed the solar energy system and you will be billed accordingly.
Customers will sell excess energy production back to SRP under the Buyback Service Rider .
Under the Buyback Service Rider, if the energy produced by the system is greater than the energy used by the customer in a given hour, the excess energy produced is credited to the customer's account. The price applied to the energy credit is determined by taking the hourly indexed energy price and subtracting SRP's costs related to scheduling, system control, and dispatch services.