CPS Energy paid San Antonians 3 cents a kWh to host third-party rooftop solar

CPS Energy, the largest municipally owned US utility with 765,000 electricity customers, had offered net-metered rooftop solar for seven years and signed about 2,100 customers with 24 megawatts. Its executive Raiford Smith said financing was a bigger barrier than roof suitability: leases need credit checks and long commitments, so participants clustered in wealthy gated communities, which also made grid management harder.

In September 2015 CPS announced a new model. Local solar companies buy panels and place them on roofs, maintain and insure them, and claim the tax credits. CPS commits to buy the output at a competitive price. Homeowners host panels for 20 years and receive a credit of 3 cents per kWh produced, about $30 a month for a typical customer.

The first phase targeted up to 10 megawatts, about 2,000 rooftops and roughly 1.5% of CPS capacity. CPS would screen applicants and place panels only where conditions suit.

Let the utility finance panels via local installers and pay homeowners to host them, so roof owners need no money or credit.

A municipal utility borrows at lower rates than installers or homeowners.

Hosts need no upfront money, no credit check and no long financial commitment.

Spreading panels more evenly eases the grid impact of solar clustered in one area.

The utility keeps the customers instead of losing demand to solar.

Find the real barrier to adoption, which may be financing rather than the product, and let the party with the cheapest capital remove it.

Slate's Daniel Gross reported that more than 2,000 people applied in the first three days, as many as had installed rooftop solar in the previous seven years. He called it the first large-scale program of its kind and noted Arizona's APS had a much smaller pilot. This was early-stage, with no results on actual output or cost yet.