I've blogged several times about the challenge that customer installed solar PV as well as companies like Solar City present to traditional electric power utilities. Utilities across North America are evaluating alternative business models, trying different strategies for both encouraging renewable power generation, responding to customer demand for solar power and protecting their revenue base. For example, a small utility Wright-Hennepin Cooperative Electric Assn created its own solar park which customers could buy shares in.
A new twist comes from the Arizona Public Service (APS), the largest power utility in Arizona. APS has proposed a 20 MW utility-owned residential distributed generation (DG) program that will help APS meet Arizona's 2015 renewable energy requirement. Under this program, APS would use third-party local solar vendors to install solar PV on customers' rooftops across APS’s service territory. APS would pay for the installation and own the solar PV panels. APS would rent customers' rooftops and pay customers $30/month rent. This enables customers to participate in solar PV generation with no upfront costs. As APS points out, this makes it possible for everyone to participate in solar PV regardless of their income.
It also represents an alternative to customer installed solar PV and net metering and to companies like Solar City. Most importantly from APS' perspective, APS owns and controls the DG infrastructure. Presumably the solar PV is directly connected to the APS grid without going through a customer meter. Customers remain electric power consumers, not generators, and this should not be expected to reduce APS revenue.