The Long Island Power Authority (LIPA) on Monday announced cuts in the rebates offered under its Solar Pioneer Program. The changes pertain to only those New Yorkers who reside within LIPA territory — all others fall under the purview of the New York State Energy Research and Development Authority (NYSERDA). Here’s a quick look at the reductions LIPA has made to its solar rebate program:

• The rebate level is now at $1.75/watt
• There will be two (2) 500kW blocks for the Solar Pioneer Program. The first block will be effective August 16, 2010, after 5PM and all applications submitted after this date and time will be at $1.75/watt. Once the 500 kW block is used up, no future applications will be approved. On October 1, 2010, an additional 500 kW block will be made available for the program at $1.75/watt. Once this block is used up, no future applications will be approved.

Why have these changes be made? We’ll let LIPA speak for itself:

While LIPA has increased its investment in its solar programs, the declining cost of installation, unprecedented demand for solar systems and continued federal, state and local tax incentives provide LIPA the opportunity to once again adjust its rebate structure to keep it in line with the ever changing solar market. Since 2000, solar customers have seen a decline in the amount of investment needed to participate in solar energy.

What does this mean? It’s common for solar incentive programs to ratchet down over time. The logic here is that, as the cost of solar panel systems comes down, fewer incentive dollars are needed to encourage adoption. Prior to Monday’s announcement, LIPA’s rebate level was $2.00 per watt. While the difference of that extra $0.25 per watt does add up — a 5 kilowatt system that was previously eligible for a rebate of $10,000, for instance, would now be eligible for a rebate of $8,750 — LIPA’s solar rebate remains a higher than many on offer in other parts of the country.