The Free Market Fights Back in Arizona

As solar power takes off in Arizona, local utility companies loathe losing their share of the market

When photo-voltaic (solar panel) technology was first commercially made in the 1950's, Western Electric charged a cool $1500 per watt of energy for a cell that heralded an efficiency of 2%. It wasn't until the 1990s that solar power took off (related: Germany's 100,000 Roofs program), with much skepticism and opposition. Governments around the world took their respective routes in promoting the energy through subsidies, feed-in tariffs, and in the horrendous case of Solyndra, corporate backing.

Today, photo-voltaic technology looks to be the future of renewables as scientists make great strides in increasing its efficiency. From 2012 to 2013, the installation cost per watt dropped 25%. Germany, despite having the amount of solar potential as Anchorage Alaska, was able to get their over 50% of their total national energy demand from solar panels on a sunny day in May 2012.

Cloudy central Europe has made solar an integral component of their energy picture.

Today, individual rooftop solar systems in Arizona are capable of not only entirely satisfying their energy demands, but selling some energy BACK to the local grid. In the case of Arizona, the new "customer" is the Arizona Public Service (APS). This can be done through a process called net metering. As the idea gains popularity in some 40 states, critics cry out, saying that these rebate programs undermine the free market's ability to fix our energy needs.

APS, in order to preserve their funds, cut their net metered rates 3000%. Their newest plan is to charge its customers some $50 to $100 more per month to have access to the grid. Customers by the hundreds attended a town hall meeting voicing their concerns and pleas to keep the costs down and the rebates up. Some customers proposed organized attempts to remove themselves from the APS grid entirely, a move that ultimately hurts the utility's bottom line.

At current rates, the average Phoenix resident pays $1.40/month to fund the net metering program.

As the debate unfolds, I'll be keeping you updated on the APS decision and its impacts on U.S. Energy