(Photo by Martin Abegglen - CC BY 2.0)

Arizona earns one of the top spots in rooftop solar energy because of its sunny skies and incentives offered by utility companies.

Arizona power companies, solar supporters and customers are holding their breath as the first in a series of rate cases kicks off this week. While the Tucson-based UNS Electric is a small utility, what regulators decide could have big implications.

About 1,300 UNS customers have solar panels hooked up to the grid, but just about everyone with a stake in the solar industry has their hands in this case. The utility is proposing to essentially cut in half what solar customers are reimbursed for the excess power they generate, while also adding a new charge for everyone. This so-called "demand charge" will be tied to the peak hour when a customer uses the most energy.

UNS spokesperson Joseph Barrios said this will incentivize customers to reexamine their energy use. 

"Well, if I change how I consume energy, maybe, I don’t turn on all my appliances as soon as I get home. That lowers their demand and in the long run lowers their costs and our costs,” Barrios said.

Not so, according to Court Rich with The Alliance For Solar Choice.

“It is the most anti-consumer way to charge for power,” he said.

“It’s hopelessly complicated, impossible to react to and there’s a reason utilities don’t have demand charges for residential customers, and solar customers are no different,” Rich said.

Under the UNS proposal, the average customer would pay about $6.50 more a month.

The case, however, is expected to set a precedent for other rate decisions, including for the state’s largest utility provider Arizona Public Service.