Rick Stires, a painter who lives in Doney Park, would love to install solar panels on his home. But even with tax credits, the initial price tag in the thousands of dollars is a barrier.

What would be better, he and others propose, is if Arizona followed Germany's model and potentially made many households into small power producers by offering to pay more than the going rate for electricity and spreading the added cost among all ratepayers.

In that country, which is leading the way in the use of solar panels, utilities are required by governments to pay a household up to four times more per unit of electricity than a coal-fired power plant, and sign long-term agreements for purchasing power from residents at these rates.

Homeowners can then take these agreements to the bank to apply for mortgages, using the solar panels as collateral.

These so-called "feed-in tariffs" end up costing the typical German household about $4 per month, according to Audubon Magazine, and were far more effective than initial tax credits and rebates in promoting solar there.

"There's a way for the little guy, the middle class, to get out from under big business," Stires said.

Stires, for example, would like to generate three times more power than he could use and sell some of it back.

But Stires' idea is illegal and unprofitable in Arizona. Homeowners with solar can sell only up to 25 percent more power than they use back to the grid. And the price they are paid is equal to or less than what they pay to receive electricity.

Arizona's utility regulator, the Arizona Corporation Commission, requires state utilities to generate 15 percent of their energy from renewable sources by 2025, and to meet benchmarks along the way.

Of that 15 percent, nearly a third must come from residential or non-utility-owned sources, such as rooftop solar panels on businesses and homes.

Homeowners now mostly opt to get a 1:1 credit for their electricity.

The meter spins backward and the little excess power a homeowner produces from wind turbines and solar panels is credited against whatever electricity bills a house runs up in future months.

Utilities have said that taking any more than 25 percent excess power would create physical difficulties for their facilities to send and then receive large, fluctuating amounts of electricity.

"It's not likely that utilities are set up in a way that they could receive that much power, and there could be technical difficulties with an individual sending three times more electricity than they are using back into the grid," said Kris Mayes, chairwoman of the Arizona Corporation Commission.

Also, small electricity systems don't see some of the efficiencies that large renewable energy installations have, but less energy is also lost in transmission, said Sam Newman, of the Rocky Mountain Institute in Boulder.

Overall, he figures rooftop solar installations can cost $6 to $9 per watt, while very large, utility-scale ones can cost $5 to $7 per watt.

The ACC set the 25 percent rule, figuring that at some much larger number, households generating much more power than they need would be regulated like utilities.

This means there is financial incentive to fit a solar array to what a home requires, and no more, said Jason Campbell, of Architectural and Environmental Associates.

He says feed-in tariffs like those in Germany are an optimal solution.

Banks here, he said, typically don't understand renewable energy installations and commonly don't write loans covering them.

That could change in time, said Mayes, who calls for Arizona to become the solar energy capital of the world.

"The amount of energy that consumers will be able to sell back to the utility will grow over time," she said. "There's no doubt that this is the direction Arizona will head."

Other states — including California, Washington, Oregon and Hawaii — are already eyeing higher fees for small power producers like those in Germany.

One city in Florida has begun, according to the New York Times.

Gainesville, Fla., pays homeowners who install renewables more than twice the going rate for selling power back to the city's utility, at a price locked in for two decades.

The incentives have proved so popular that the city hit its cap for the agreements within a few days of introducing the program.

Cyndy Cole can be reached at 913-8607 or at ccole@azdailysun.com.

Solar systems still good investment

Even without feed-in tariffs, homeowners who invest in solar will still get their money back — if they are patient.

Northern Arizona University researchers recently found that investing in solar under current conditions is financially sound and that a $22,393 residential solar system was cut to $6,239 in price after rebates from Arizona Public Service and state and federal tax credits.

They calculated a 10.6-year payoff for such a system. After that, the power is essentially free, except for occasional maintenance of the system.

The real long-term advantage, they say, is that traditional energy costs are expected to increase while the costs of owning renewables won't.

"Given what has been happening to my other investments recently, the solar system has turned out to be a very good one," said Dean Howard Smith, solar array owner and director of business and policy programs for the Sustainable Energy Solutions Group at NAU.