Solar Energy purchasers will see lower subsidies

Under a new agreement awaiting approval by the Colorado Public Utilities Commission (CPUC), solar purchasers would see upfront rebates for the purchase of solar units reduced or eliminated. The agreement, if approved, will only be in place until mid-2012 when CPUC is expected to put in place another new plan.

“This agreement gives the solar industry the predictability we need,” said Carrie Hitt, president of Solar Alliance. “We continue to strongly support a program structure of transparent incentive steps, which decline as solar capacity targets are hit. We also favor the switch to performance-based incentives for all installation levels as a way to reduce annual costs of the program.”

The agreement made between Public Service Company of Colorado, the staff of the Colorado Public Utilities Commission, the Colorado Office of Consumer Counsel, the Governor’s Energy Office, Western Resource Advocates, the Colorado Renewable Energy Society, Solar Alliance and the Colorado Solar Energy Industries Association (CoSEIA), would set Xcel’s rebate program investment at $97.3 million for the Solar Rewards Program and Solar Farms program in 2011.

The settlement will eliminate upfront rebates for all but small customer-owned solar systems. It would instead provide customers with 20-year-rebates in the form of Renewable Energy Credits (REC) valued between 16 cents and 11 cents per watt depending on the program.

For individual customers installing a solar array at their homes, Xcel would continue to provide an upfront rebate of $1.75 per watt and a 4 cent REC to be paid out over 10 years for the first 4 megawatts of solar energy it acquires from a customer. After that cap is reached, customers would receive $1 per watt upfront and a 9 cent REC. That amount is cut in half in step three and by the fourth level customers would receive only a performance based REC of 14 cents.

Rebates are paid from a two-percent charge on energy bills in the state, which was approved by voters in 2004. As renewable energy goals are met, customers would receive less in rebates from this pool of money. However, more customers would be able to receive disbursements.

Michelle Aguayo, media relations representative at Xcel Energy, told the Colorado Independent that while customers would see less money returned to them in the form of a rebate, the cost of solar equipment has come down by nearly 50 percent since the program was implemented.

Once the program cap of $97.3 million or 60 MW of acquired solar energy is reached, the program will end.

“A significant aspect of this agreement is that when Solar Rewards is fully subscribed under this settlement—which could be next year given our state’s enthusiasm for solar energy—Xcel Energy will be in compliance with the 2018-2019 renewable energy standard for customer-sited solar,” said Jay Herrmann, Xcel Energy’s vice president of marketing.

During a committee meeting held recently at the State Capitol, solar energy companies argued that Excel was counting money paid out to those who had applied for the solar rewards program and been queued but had not actually received rebates against the cap. The agreement addressed this by requiring Xcel to remove expired applications from the queue; remove from the queue systems that are not actually installed; and, add back cap dollars that were once committed to a system but were not actually spent.

“All parties reached an agreement that continues the success of Solar Rewards. The agreement maintains the economic benefits of this aspect of the renewable energy standard, while protecting the environment and consumers,” said TJ Deora, director, Governor’s Energy Office.

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