Arizona utility claims ‘historically low price’ for solar-plus-storage project’s power

May 23, 2017
LinkedIn
Twitter
Reddit
Facebook
Email
Image: Tucson Electric Power.

Arizona utility Tucson Electric Power (TEP) claims that the cost-effectiveness of a new large-scale solar-plus-storage facility under construction will allow it to provide “more solar energy to more customers for less money”.

TEP said that a 100MW solar PV array coupled with a 30MW/120MWh energy storage system will be completed and connected by the end of 2019. The utility said output from the solar farm would be purchased at a “historically low price”. An affiliate of NextEra Energy, which only last month said it will build another 10MW lithium-ion battery energy storage system in Arizona for utility Salt River Project, will construct the system.

According to TEP, the utility will be able to source renewable power for less than three cents per kilowatt-hour from the combined installation for a 20-year period. However, the utility said that the price, which was the only figure quoted in its announcement of the project, excluded the cost of the energy storage system. Nonetheless, TEP said that this was less than half the sum agreed under “similar contracts” in the past few years.

“This new local system combines cost-effective energy production with cutting edge energy storage, helping us provide sustainable, reliable and affordable service to all of our customers for decades to come,” TEP senior director for renewable energy and energy supply Carmine Tilghman said.

This article requires Premium SubscriptionBasic (FREE) Subscription

Try Premium for just $1

  • Full premium access for the first month at only $1
  • Converts to an annual rate after 30 days unless cancelled
  • Cancel anytime during the trial period

Premium Benefits

  • Expert industry analysis and interviews
  • Digital access to PV Tech Power journal
  • Exclusive event discounts

Or get the full Premium subscription right away

Or continue reading this article for free

Announcement feeds into state-wide debate over cost of rooftop solar

While the project announcement appears to be exciting news for Arizona, following on the heels of news of three much smaller utility-scale energy storage systems by TEP, it has a slightly more, potentially, controversial side to it.

Currently there is a dispute over the cost of and compensation for rooftop solar power ongoing in the state. TEP itself has proposed a new rates structure for rooftop solar customers that would cut solar credits and instate time-of-use (ToU) rates earlier this month.

TEP argues that ‘community’ projects such as the 100MW PV + 120MWh storage system could be a more effective way to increase the utility’s share of renewable energy than relying on individual customers choosing to go solar. According to the utility, the plummeting cost of power from large-scale arrays compares unfavourably to rates paid for solar energy added to the grid by rooftop solar customers, which it says have increased in the last few years.

Arizona customers of TEP pay more than four times more for excess rooftop PV power than customers of other utilities, in other jurisdictions, the utility claimed.

“Focusing our resources on the development of cost-effective community scale systems allows us to provide more solar energy to more customers for less money. The best way to help solar grow in our community is by planning and siting systems in an organized, responsible and equitable manner,” TEP’s Carmine Tilghman said.

NextEra Energy Resources senior vice president of development Mike O’Sullivan said the project would create “good-paying jobs and increased tax revenue for the state and the local community”.

24 March 2026
Dallas, Texas
The Energy Storage Summit USA is the only place where you are guaranteed to meet all the most important investors, developers, IPPs, RTOs and ISOs, policymakers, utilities, energy buyers, service providers, consultancies and technology providers in one room, to ensure that your deals get done as efficiently as possible. Book your ticket today to join us in 2026!

Read Next

December 5, 2025
Developer BrightNight and independent power producer (IPP) Cordelio Power have announced financial close of the 200MW/800MWh Greenwater battery energy storage system (BESS) in Washington state, US.
December 4, 2025
RWE Clean Energy has commissioned the Stoneridge Solar PV project in Texas, adding 200MW of solar PV and 100MW/200MWh BESS to its operational portfolio.
Premium
December 4, 2025
A subsidiary of utility Northern Indiana Public Service Company (NIPSCO) has struck a deal with Amazon to construct 3GW of new dispatchable capacity, with the aim of serving the tech company’s planned data center expansion.
December 4, 2025
PJM has awarded 23 battery energy storage system (BESS) resources, totalling 2.2GW, with interconnection agreements (IAs) in its first transition cycle (TC1) of the reformed interconnection process.
December 2, 2025
South Carolina public utility company Santee Cooper has applied for a Certificate of Environmental Compatibility and Public Convenience and Neccessity (CECPCN) with the state’s public service commission (PSC), for its 300MW/1,200MWh battery energy storage system (BESS).