As the cost of installing solar photovoltaic (PV) panels in Arizona has come down over the past year or so, homeowners and businesses continue to purchase systems at an spiraling rate. The systems are being bought so fast, according to Unisource Energy Corporation, that the figures have exceeded even its highest-demand projections.

The Unisource Energy Corporation is the parent company of Unisource Energy Services in Arizona (UES), a utility that serves more than 230,000 customers in northern and southern Arizona. UES faces the same issue that currently confronts Tucson Electric Power: high demand for solar power systems is fast depleting the funds allocated to its solar rebate program. According to The Province, UES customers purchased enough solar energy systems just in June to account for almost half of the $5.2 million allocated for the utility’s 2010 SunShare solar incentive program.

Faced with such high demand, UES must decide what to do. One option is to simply let the rebate program dry up and wait until next year to start afresh. Another option is to tap funds that have been allocated for performance-based incentives, which pay owners a rate proportional to the electricity generated by their systems. Still another would be to reduce the rebate level for 2010, but it’s unclear such a move would gain the necessary regulatory approval. Other Arizona utilities — namely Arizona Public Service (APS) and Salt River Project (SRP) — have in past months successfully reduced the per-watt rebate level available to their customers.

As it stands, UES is already taking measures to ensure that the utility does not run into the same problem next year. The utility has asked regulators for permission to reduce the up-front incentives for 2011 — from $3.00 per watt to $2.25 per watt for residential customers and from $2.50 to $2.00 per watt for commercial customers. This, says the utility, will reflect the drop in price of solar electric systems and allow the incentive program to help more customers. Note that, according to the utility’s proposal, the total amount of funds available for the 2011 SunShare subsidy — $6.7 million — will not be reduced.

Bottom line: if you’re a UES customer, act fast to take advantage of the SunShare rebate. Get solar today!