A bit ago, we reported that Salt River Project (SRP) — an Arizona utility — couldn’t keep up with demand for its solar rebate program, and therefore decided to suspend rebates until 2011. The abrupt suspension of solar rebates in other parts of the country has, not surprisingly, put many solar project plans on ice. Without knowing what size rebate will be available for future solar installations, system owners and solar installers alike aren’t able to accurately estimate out-of-pocket solar costs.

To address this issue, SRP has recently announced an interim funding level to ensure that folks go forward with their commercial and residential solar energy system projects:

At this time, the number of applications received by SRP for its EarthWise Residential Solar Electric Program has surpassed the 4.5 megawatt (MW) cap that was established for all installations through April 30, 2011. As a result, SRP is temporarily suspending the $2.15 per watt incentive level.

During the interim time period from now until May 1, 2011 when the new budget and incentive levels will be announced, SRP has set aside funding for 1 MW of residential solar electric installations at an incentive level of $1 per watt, up to 5 kilowatts. This will allow customers to move forward with a project should they decide to do so now, or they may wait until the next fiscal year when the incentive could be higher than $1 per watt. Progress towards the 1 MW goal is reflected in the reservation status bar on the right of the page.

What does this mean for you, the Arizona homeowner (and SRP customer) who is interested in installing solar panels? It means that there are two roads to go by:

(1) Proceed now with your solar home energy installation. Take the $1/watt rebate, which would, assuming you do a 5-kilowatt system (kW) or bigger, would total $5,000. Take the 30 percent federal tax credit and the $1,000 Arizona state solar energy tax credit. Start saving on your monthly electric bill and rest easy that you’re taking advantage of what is still a perfectly decent solar rebate offer.

(2) Wait and see what 2011 brings. There’s a chance the newly announced rebate level will be above the $1.00/watt interim rate. But according to SRP’s representatives, the solar rebate rate for 2011 will likely not be the same when the PV incentive restarts May. It is highly unlikely — we’d say impossible — that it will revert to the $2.15/watt rate that was in place earlier in 2010.

So that’s it. It bears noting that SRP’s solar hot water rebate is still in effect. And, if you’re not an SRP customer, remember that APS, TEP and Arizona’s other main utilities offer solar energy rebate programs of their own. The cooler winter months are a great time to do a solar installation — you can get the system in place so that when the scorching days of summer return, you’ll be well prepared to cut your monthly electric bills.

SRP says it  will relay information about rebate rates on its website between March and April 2011,  check-in with SRP and GetSolar,  as we will pass along  information when it rolls in.

Since 2004, SRP’s EarthWise solar rebate program has been a continual success, having helped 163 commercial customers in SRP’s metropolitan Phoenix service area install solar photovoltaic (PV) and/or solar hot water systems. Hundreds of residential customers have also benefited from the program.

The most recent Arizona commercial solar installation aided by EarthWise was completed at the end of October, when IKEA in Tempe, AZ installed the largest commercial system in the SRP service area. The furniture company’s 75,000 square-foot system will produce about one million kilowatt-hours of solar energy each year — enough to power about 90 average American homes annually.

Prior to the program’s temporary suspension, SRP’s 2010 EartWise program offered a rebate of $2.15/watt for residential PV systems and commercial PVsystems of 30 kilowatts (kW) or smaller. Commercial systems between 30 kW and 300 kW were eligible for a production-based incentive of $0.147/kilowatt-hour (kWh) for 20 years or $0.188/kWh for 10 years.