"It opens the opportunity for solar to everybody in the community," said Daniel Froetscher, the company's senior vice president for transmission, distribution and customers.
Under the proposal, consumers would save money by receiving monthly credits, and Arizona Public Service would pay for installation and maintenance. The customers would get a $30 credit each month for the 20 years, or $7,200 over the course of the 20-year program.
The 20 megawatts of power generated by the rooftop-systems panels would flow to the grid, rather than providing power to the individual homes.
The company said its alternative to generating power on customers' rooftops would be to build a large-scale solar plant.
The proposal would cost Arizona Public Service between $57 million and $70 million.
The Arizona Solar Energy Industries Association says the company's proposal would be competition because solar companies' customers aren't subsidized.
"The idea of our members who compete in the free market today having to all of a sudden compete with a regulated monopoly is frightening. How would you like it if the government just stepped in and started competing with your business?" said Corey Garrison, treasurer of the association and CEO of Arizona-based Southface Solar.
Unlike rooftop solar companies that must compete with each other, as a regulated monopoly in its service area, Arizona Public Service earns a guaranteed rate of return off of its assets, which would include the proposed rooftop solar systems.
The company expects the commission to hold a hearing on its proposal this fall.