On March 31, 2016, GTM ran an article by David Burton titled “Navigant Consulting’s Report on Residential Solar Misconstrues Value of Tax Attributes.” The Navigant report critiqued by Mr. Burton was submitted as testimony in the UNS Electric rate case by my company, Arizona Public Service (APS).
Mr. Burton’s criticisms warrant a response, since his comments appear to be intended to undermine the validity of the Navigant report. However, first it is helpful to go over the key findings of the report — particularly since Mr. Burton only mentioned them in passing.
Navigant’s report provides an analysis of project returns for solar third-party-owned (TPO) providers — solar leasing companies such as SolarCity, Sunrun, and Vivint Solar — and their project investors in utility service territories across Arizona and California. Navigant “calculated total project return independent of the breakdown of possible recipients of the project return (i.e., whether an equity investor, a tax equity investor, or the third-party provider itself is the recipient of the project return on invested capital).”
Navigant’s analysis concluded that TPO solar providers and their project investors can adjust to some proposed changes in utility rate structures, while maintaining acceptable project returns.