It’s getting clear that utilities are girding for a major fight with rooftop solar advocates and installers over net metering, the practice whereby state utility commission allow homeowners to sell excess power back to the grid. Sun rich Arizona is proving to be an early battleground.

Utility Arizona Public Service (APS) had 900 rooftop solar systems to deal with in 2009. Today that number is over 18,000 and is increasing at the rate of about 500 per month.  Specifically the utility is arguing, like many other utilities, that net metering, and rooftop solar in general, is unfair to non-solar customers with estimated costs shifts the utility pegs at $800 to $1000 per year.

APS is in the process of introducing a number of proposals to adjust the net metering formulas that apply to rooftop solar customers. Under current net metering formulas, a ratepayer would save about $133.92 per month while two proposals from APS would cut that to $75.70 and $35.00. One proposal actually doesn’t want to pay customers for power but provide a type of credit system.

The utilities have no choice but to pair back net metering programs. But even as they do so, it won’t change the fact that utilities could become distribution and transmission providers and not generators of power as more folks generate their own power. And who knows, if energy storage technology improves over the next decade, utilities’ value as distributors and transmission infrastructure players could come under threat as well.