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A proposal in Arizona could change the way solar energy is sold.

Typically, solar energy companies install solar panels, or matrices, at a given site and the owner (company or owner) buys or leases the installation program, use electricity, and sell the surplus to the local or regional company that supplies power to the facility.

In Scottsdale, Foster City, Calif.-based SolarCity Corp. wants to install panels solar roofs on two schools, essentially, for free, and allow the district could buy the electricity generated.

This regional service has Public Salt River Project (SRP) in arms. Arizona Public Service Company, the regional (and other larger customers and 600,000 MW 3998) has raised no objection, although both will be forced to testify before the Arizona Corporation Commission, the Arizona equivalent of a public utility commission.

The schools in question are Coronado and Desert Mountain high schools. At issue is: can a manufacturer of solar cells function as a utility? Supporters of the proposal see it as a great incentive for solar energy, releasing the owners of the initial costs of installing solar panels sometimes huge. Opponents argue it would allow manufacturers of solar panels to sell electricity without the supervision of the state-regulators, leading to conflicts pricing of electricity and abuse.

Turning to the issue of solar energy start-up costs, some have noted that, while the people and even companies can offset these incentives with any number of federal, regional and local government buildings and schools are not eligible for many of them, especially since these properties are financed with tax-exempt private activity bonds and federal, state or local grant financing (Article 48 of the tax credit for investment).

SolarCity argues that these constraints are slowing the growth of solar energy, and many educators and officials public agree. Equally important, SolarCity, and installer and the registered owner can take advantage of these incentives, which means that no loss and reflected in the way of cheaper installation costs across the board as profits cut cost of solar panels.

That benefit alone, at a time in continuous recession, it's tempting. Under SolarCity, schools could save 4.7 million U.S. dollars in energy in the next 15 years by adopting the process.

SolarCity is not the first to make this proposal, either. In October 2008, Solar Alliance, a state based support group for Designers solar manufacturers, installers and financiers, asked the Corporation Commission to approve similar proposals. In fact, third party property by agreement power purchase agreement (PPAs) were discussed as an option in the Energy Eshone blog.

Arizona Corporation Commission has yet to return to them, because the decision process challenges paradigms of value to many that there are no parallels or precedents to draw on.

This is especially true as customers still be connected to the local utility for electricity needs beyond the capacity of individual solar systems. It also weighs much measurement equation are Arizona's renewable energy mandate, requiring utilities to get 15 percent of its energy from renewable sources solar and wind by 2025.

SolarCity has so far refuted by saying that SRP challenge, since it is not a monopoly, it is unnecessary Corporation Commission regulation.

As President of the Corporation Commission Kris Mayes said, the entire solar community (and nation) is awaiting a resolution of these issues difficult. Tom Alston, Solar Alliance leader in Arizona, confirms that, and notes that more than half of recent applications for solar installations in the state have coordinated through a service agreement for solar energy as offered SolarCity.

Clearly, if the proposal is rejected, solar energy will suffer a huge defeat on sunny Arizona.Â

CBS Phoenix Channel 5 news segment on Covance

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