Usually, the decided upon rebate level ends up somewhere between these two parties’ preferences.

That appears to be the case with the Los Angeles Department of Water and Power (DWP), which on Tuesday announced it will in September relaunch its solar energy rebate program at a new, lower level. Back in April, the utility suspended the program, citing record demand and dwindling coffers.

Once reopened, DWP’s solar incentive program will offer residential rebates at a rate of $2.00 to $2.20 per watt — a reduction of around 45 percent from the previous level of $3.25 per watt.

Not surprisingly, solar companies aren’t exactly thrilled:

“Los Angeles should be a leader in residential solar and even at current program levels the city is far behind most every other comparable city,” said Ethan Sprague, director of government affairs at SunRun, a home solar company that provides solar leases in Los Angeles. “The new proposal will put LA farther behind, taking away from homeowners the chance to improve their bottom line with savings from solar.”

Compared to what’s available in the vast majority of the country, a $2.00 per watt solar rebate is incredibly generous. So Sprague’s comments may strike some of you as misplaced. There is an underlying logic, however: some folks argue a more generous rebate is required to sufficiently spur demand, mainly because electricity rates in DWP service territory are lower than the state average. Apparently, SunRun’s energy analyst have crunched the numbers and decided that $2.00 a watt won’t cut it.

Still, two dollars per watt is better than zero dollars per watt.

Photo courtesy of LADWP.

a

To help things along further, Boston last week launched a program to encourage residents to install solar photovoltaic (PV) systems.

“Solar panels provide up to 90 percent of the annual electric usage and in days like today, with the longest period of daylight, the meter is running backwards, selling power back to the grid and to me that’s incredible,” said Mayor Thomas M. Menino.

The Boston Herald has more:

The mayor joined Katharine Kilbourn and Scott Shear who recently installed 22 solar panels on the south-facing roof of their 1860s farm house in Jamaica Plain. A comparable system costs about $25,000. But with the federal tax credit of $7,500, the state clean energy credit of $5,000 and the city’s rebate of $3,000, the initial costs can be cut by as much as 62 percent. In addition, the excess electricity is sold back to the power company.

“We are taking what has been a five-and-one-half year payback and reducing it to less than four years,” said James Hunt, the city’s chief of environment and energy. “This is one of the most cost-effective things that all residents can do.”

Boston’s program is being made possible thanks to a $140,000 grant from the American Recovery and Reinvestment Act, which authorized the creation of the Energy Efficiency and Conservation Block Grant for small residential solar PV installations. Assuming each Boston applicant gets the maximum allowable solar rebate of $3,000, the program will have enough funding for about 45 projects. Don’t expect the funds to last too long, in other words…

For more information on the Boston solar rebate program, visit www.renewboston.org.

Photo credit: Renew Boston

a

“We expect the available funding to be claimed very quickly so we encourage interested customers to start researching projects and meeting with contractors as soon as possible. I believe similar programs from TECO and Progress were fully claimed in less than two days,” said FPL spokeswoman Jackie Anderson, according to The Palm Beach Post.

Starting June 21, FPL customers looking to install a solar photovoltaic (PV) system or a solar water heating system can apply to receive rebates according to the following schedule:

Residential Solar PV: The residential solar PV program will provide an incentive of $2,000 per kW of the rated direct-current (DC) output of a PV system up to a maximum of $20,000. FPL estimates rebates will be available for about 400 customers depending on the size of the systems installed.

Business Solar PV: The business PV program will provide a variable incentive depending on the output of the system. The rebate will be up to $50,000 per site during the life of the program and will be calculated as: $2 per DC watt nameplate rating of the solar panel up to the first 10 kW; $1.50 per DC watt nameplate rating of the solar panel from 10 kW up to 25 kW and $1 per DC watt nameplate rating of the solar panel greater than 25 kW. Businesses with multiple locations can receive a maximum combined rebate of up to $150,000 per funding year. FPL estimates rebates will be available for about 80 customers depending on the size of the systems installed.

Residential Solar Water Heating: FPL’s residential solar water heating program will provide $1,000 per installed solar water heater. A solar water heater can cut a family’s water heating costs by up to 85 percent, according to the Florida Solar Energy Center (FSEC).  FPL estimates rebates will be available for about 4,500 customers depending on the size of the systems installed.

Business Solar Water Heating: Business customers will be eligible for a variable rebate based on the size of the system installed that will equal $30 per 1,000 BTUh/day of the maximum rated output of the installed system. The maximum incentive during the life of the program is $50,000 per site. Businesses with multiple locations can receive a maximum combined rebate of up to $150,000 per funding year. FPL estimates rebates will be available for about 50 customers depending on the size of the systems installed.

In addition to the FPL solar rebate, Florida homeowners can also avail themselves of a federal tax credit worth 30 percent of the entire installed cost of their system. If you’re thinking about going solar, we encourage you to get a solar home energy quote ASAP, as these funds are likely to go like hotcakes.

Customers of Progress Energy should review its SunSense rebate program.

a

As of May 1, SRP customers who install a residential solar photovoltaic (PV) energy system will be eligible to receive a rebate worth $1.35 per watt (solar panels are sized in watts). The rebate will be capped at 5 kilowatts (kW), which means that a homeowner who installs a system that’s 5-kilowatts or bigger in size could receive $6,750 in incentives.

Here is SRP’s explanation of how it has restructured the program:

SRP has set aside funding for a total of 4.5 megawatts (MW) of residential solar electric installations through April 30, 2012. The incentive level is offered at $1.35 per watt, up to 5 kilowatts (kW) for the first 2 MW of installations and adjusts to $1.20 per watt for another 1.5 MW of installations, ending at $1 per watt for the remaining 1 MW of installations.

In addition to solar rebates offered by SRP and other utilities, like APS and Tucson Electric Power, Arizona residents can also take advantage of a $1,000 state tax credit, as well as a 30-percent federal tax credit. Together, these various incentives help reduce solar installation costs.

Homeowners who install solar panels enjoy significantly lower electricity bills for many years after first going solar. That 5-kW solar array mentioned above, for example, could reduce monthly electricity costs by about $720 per year, according to SRP.

a

The Michigan utility today announced that its popular SolarCurrents rebate program has become fully subscribed.

“The SolarCurrents program demonstrated that financial incentives can spur significant growth and interest in an emerging renewable technology,” said Trevor Lauer, DTE Energy vice president, Marketing & Renewables. “We are proud of the role this program has played in helping Michigan’s solar industry transition to become a viable and growing industry within our state.”

…

DTE Energy customers can still install solar energy systems – and work with the utility to connect them to their electric system. But DTE Energy will no longer provide financial incentives that were part of the initial pilot program.

Well isn’t that convenient?

Until the program stopped accepting applications on Thursday, buyers of residential solar energy systems had been eligible to receive a rebate of $2.40 per watt of installed solar photovoltaic (PV) power. An owner of a new 7,000-watt (7-kilowatt) system, for instance, would have received $16,800 in incentives. While a federal tax credit worth 30 percent of system costs is available to all Americans, regardless of their state of residence, local incentives have been needed to spur meaningful demand for solar PV systems.

DTE Energy has a stated goal of adding about 1,200 megawatts (MW) of renewable energy — mostly wind — to its energy portfolio by 2015. Fifteen MWs are to come from DTE-owned solar energy systems, while five MWs are to come from customer-owned systems.

The closing of the SolarCurrents program will undoubtedly have a chilling effect on the local solar energy market. As we’ve seen in other states in recent years, incentive programs that are poorly structured or are limited by funding and/or time horizon can make for a painful boom-bust cycle. They can also frustrate homeowners who learn about cancelled rebate programs just as they’re beginning to get interested in solar.

Bottom line: solar rebates almost always go fast. So if there’s a local rebate or other incentive available in your area, be sure to get a free solar home quote and submit your application ASAP!

a

(For more info on SRP’s solar incentive programs, see here and here.)

As it turns out, this isn’t the only way the utility is increasing the number of residential solar energy systems within its service territory.

SRP has installed solar panels atop 30 group homes in the East Valley area of greater Phoenix, at sites in Mesa, Tempe, Queen Creek and Ahwatukee. Each system is 5-kilowatts in size (about average for residential solar) and is expected to save $700 a year on annual electricity costs.

As the Phoenix Business Journal relays,

[h]alf of the money comes through the American Recovery and Reinvestment Act with the other half matched by SRP. The utility received a grant from the Income Qualified Residential Solar Electric Program of the Energy Office of the Arizona Commerce Authority, which coordinated the stimulus money.

…
“We are proud to be a part of a program that assists nonprofits in lowering their overhead costs while offsetting their electricity usage with clean energy from the sun,” said SRP Manager of Sustainable Initiatives and Technologies Lori Singleton.

Photo courtesy of Salt River Project.

a

The numbers tell all: some 2,000 rebate applications remain unprocessed, representing more than $110 million in demand for a round of rebate funds that’s capped at $30 million for 2011. It seems people in L.A. really love solar power and how much money solar panels can shave off monthly electric bills. This is good news.

The bad news is that no one knows how things will pan out. According to DWP’s website,

the demand for rebates has far exceeded our current budget for the program, restricting our ability to pay out rebates in a timely manner as well as contributing to safety problems. This record demand requires LADWP to review and revise the program to better serve its program participants. LADWP has stopped accepting new reservation requests for at least 90 days, effective at 11:59 p.m. Friday, April 8, 2011, while we revise the program to better serve participants and reflect current solar PV market conditions.

Under the California Solar Initiative, homeowners and businesses across the state are eligible to receive incentives to help offset the cost of installing solar panels. DWP, a public utility, for some time offered a rebate that was higher than the state average. A more generous rebate was necessary, some folks argued, due to the lower electricity rates in DWP service territory.

Details aside, the bottom line is that LADWP customers interested in installing a solar home energy system will have to wait and see how things shake out. In recent years, we’ve seen similar scenarios — where demand for solar incentives outstrips supply — play out across the country in places like California, Arizona, New Jersey, Florida and Massachusetts.

When it comes to securing rebates for your solar power project, the early bird gets the worm. As of earlier this year, for example, some Arizona solar rebates for 2011 were already nearly half gone. So if you’re thinking about installing solar, you’d be wise to get a solar home quote sooner rather than later.

a

After a month or so of negotiations, the parties involved — Colorado officials, solar industry participants and Xcel Energy — have reached an agreement to resume the utility’s Solar*Rewards solar incentive program:

The settlement calls for resuming the program at $1.79 per watt, for 4 megawatts of power, with the levels gradually dropping to 14 cents per watt as more solar power from small-scale systems is added to Xcel’s electricity grid — possibly as soon as next year, according to the announcement.

From the start of $1.79 cents per watt, the agreement calls for dropping rebates to $1.09 per watt for 5 megawatts of power, then 61 cents for 5 megawatts of power, to 14 cents for 6 megawatts of power.

It appears the incentive will be offered over time, as opposed to as an upfront rebate. We’ll be sure to relay more details as they emerge. Details aside, this is great news. As the biggest investor-owned utility (IOU) operating in Colorado, Xcel Energy serves over a million Colorado residents. The reactivation of the utility’s solar rebate means that more homeowners will be able to enjoy clean, predictably priced electricity from their solar energy systems.

a

Sunshine is probably not the first thing that comes to mind when you think about New Jersey, for instance. But the Garden State is the country’s second-biggest solar market, after California. How is this possible?

If you’re thinking about installing solar panels on your home or business, it’s helpful to think in terms of three broad categories: sunlight, electricity prices and incentives, like solar rebates and tax credits.

(1) Sunlight. Photovoltaic (PV) solar panels generate electricity whenever they’re exposed to sunlight. So, unless we’re talking about Alaska during the winter months, chances are good there’s enough sunshine in your part of the country to power a solar array.

>> See: How Solar Home Energy Works

Of course, all else equal, the more sun, the better. Just take a look at the sunshine numbers for Phoenix, Arizona, courtesy of the National Renewable Energy Lab (NREL) PVWatts Viewer:

It’s clear that Arizona is blessed with sunshine. In a typical year, Phoenix receives 6.17 kilowatt-hours (kWh) per square meter. Don’t worry about the details. All this means is that Phoenix gets about 30 percent more annual sunlight — or “insolation” — than Atlantic City, which receives 4.7 kWh/square meter in an average year.

>> The amount of sunlight hitting your property may be impacted by trees, the angle of your roof and other site-specific factors. For more info, read: What Makes a Roof Good For Solar?

You may be saying “duh,” at this point — you don’t need a degree in meteorological science to know that Arizona is sunnier than New Jersey! But bear with me. My aim here is to show that a good amount of accurate data goes into the solar design and installation process. This means you’ll know how much your solar home energy system will produce, year over year.

(2) Electricity prices.

Notice something besides annual sunlight that’s different between Phoenix and Atlantic City? You got it: “ELEC RATE.” Simply put, electricity costs more in New Jersey than it does in Arizona. All else equal, the higher the per-kWh price for electricity, the better.

To take an example, let’s assume Pat and Kelly each buy a solar home energy system. For sake of simplicity, let’s say each system cost $1,000 (in reality, PV systems cost much more than this) and that they both will produce 5,000 kWhs per year. The only thing that differentiates the two solar buyers is that Pat pays five cents per kWh ($0.05/kWh), while Kelly pays ten cents per kWh ($0.10/kWh).

Q: Who made the better investment?

A: Kelly.

Let’s take a quick look at the math. Pat’s system produces 5,000 kWh per year, saving $250/year in electricity costs (5,000 kWh/year x $0.05/kWh = $250). Kelly, meanwhile, saves $500/year (5,000 kWh/year x $0.10/kWh = $500). Saving $500 annually, it will take Kelly just two years to recoup the initial outlay of $1,000; it’ll take Pat twice as long to do the same.

Granted, this is a vast oversimplification. But generally speaking, if you’re paying a high rate for your electricity, you stand to benefit from installing solar panels.

(3) Incentives.

What do both Arizona and New Jersey have in common? Residents in both states are eligible to participate in a solar incentive program. Arizona homeowners and businesses can receive solar rebate via their utility, like Arizona Public Service. Owners of solar panels in New Jersey, meanwhile, can sell the solar renewable energy credits (SRECs) associated with their system’s output.

>> GetSolar Map of State Solar Rebates and Incentives

Also, don’t forget that, at the federal level, homeowners are able to take advantage of a solar tax credit worth 30 percent of installed system costs. And businesses that install a commercial solar energy system in 2011 may receive a solar grant, also worth 30 percent of system costs.

As it stands currently, incentives — like solar rebates and tax credits — matter. Consider the fact that Ontario, Canada — which neither has particularly high electricity prices nor receives exceptional amounts of sunlight – is one of the fastest-growing solar energy markets in North America.

To sum up: if you live in an absurdly sunny place, with sky-high electricity rates and TONS of solar rebates and tax credits, you shouldn’t even think twice about installing solar panels. These kinds of places are admittedly few and far between. Instead, we find most people who are interested in solar power face a somewhat unique mix of sun, electricity costs and incentives. The best way to see what mix is in your area is to get a free solar quote.

a

Here’s the deal. In 2006, the state’s public utilities commission launched the California Solar Initiative (CSI), a multi-year program aimed at providing more than $3 billion in incentives to solar-energy projects through 2016. The program was broken up into ten “steps,” each representing a certain amount solar power (in megawatts, or MW). According to the program structure, as more solar gets installed, the incentive level is reduced. Like this:

In which step are we? That depends on your utility. Residential customers of California’s other investor-owned utilities — Pacific Gas & Electric (PG&E) and San Diego Gas & Electric (SDG&E) — are in Step 8, which means they are entitled to receive a solar rebate of $0.35 for each watt of solar panels they install. By comparison, customers of SCE (which is in Step 6) are entitled to a rebate of $1.10 per watt — more than three times as much as what’s available to their neighbors in SDG&E and PG&E territory! Check out the following chart, courtesy of Go Solar California:

While installing solar panels can still make great sense with the lower rebate from PG&E and SDG&E, I can’t emphasize enough what a good opportunity SCE’s solar rebate presents to homeowners who are thinking about installing solar panels. Think about it this way: if you installed a typical solar home energy system of 5-kW in SDG&E or PG&E territory, you’d be eligible for a solar rebate of roughly $1,750. That same system installed on the home of a SCE customer could receive a rebate of $5,500.

Finally, remember that back in the day (2006-07), all these rebates were $2.50 or more per watt. Solar incentive levels are a moving target in California — the sooner you get moving on your solar energy project, the better. (This goes for everyone!)

a