From the perspective of homeowners and businesses looking to go solar, the bigger the solar rebate the better. From the perspective of the utilities and government agencies that finance those rebates, often the opposite is true.

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.