SOLAR TODAY - May 2011 - Innovative Design

advances
| incentives and regulations
Reprieve for Colorado’s PV Incentives
The Colorado Public Utility Commission on March 18 approved a
compromise plan to revive the popular Solar Rewards program for
grid-connected photovoltaic (PV) systems. The plan was negotiated
by Xcel Energy and the state’s solar installer community, led by the Colorado
Solar Energy Industries Association (CoSEIA).
Under the new plan, effective March 23, up-front rebates for small
customer-owned systems will drop to $1.75 per watt for the first 4 megawatts,
and taper off to zero as further megawatt targets are met. Meanwhile,
performance-based payments will ramp up from 4 cents per kilowatt-hour
to 14 cents.
For third-party power purchase agreements and larger systems, up-front
rebates end immediately. Performance-based payments begin at 16 cents
per kilowatt-hour for small customer-owned systems and 15 cents for larger
systems, both scaling back to 11 cents as megawatt targets are met.
The plan will help to pay for 60 megawatts of new distributed PV capacity.
The original Solar Rewards program has installed 70 megawatts.
The agreement ends a five-week moratorium on solar incentives that
stalled all new-system sales. And the new performance-based system will
be revisited within a year, as Xcel Energy in May is due to submit a plan for
complying with its 2013 renewable energy targets.
The negotiated plan is “a short-term band-aid solution,” said Blake Jones,
president of Namasté Solar in Boulder. “We’re happy it’s back up and running,
and we think there will be an initial surge of sales as customers who
were waiting for an outcome take up their projects again. Then it will be
very interesting to see how the performance-based incentive works as the
market develops.”
Jones believes that the performance-based incentive system will reward
installers and customers who take installation quality and long-term maintenance
very seriously. Because of the fall-off in up-front price support, established
credit and stable financing relationships will be more critical. This
may be to the advantage of solar-leasing vendors. The new system may help
to sell high-end high-efficiency modules, and may also have implications for
the real estate market: A home seller passes the power-production income
stream to the new owner.
Meanwhile, uncertainty in Colorado’s PV market — recently one of
the strongest in the country, thanks in part to the state’s 30 percent renewable
electricity standard — has installers re-evaluating their commitments.
Namasté laid off 12 employees in Colorado, and Jones says the company has
“re-allocated” some resources toward projects in half a dozen other states.
Meanwhile, CoSEIA is circulating a petition to reboot the incentive
program abruptly terminated in October by Black Hills Energy, the utility
serving Southeastern Colorado. — Seth Masia
16 May 2011 SOLAR TODAY solartoday.org Copyright © 2011 by the American Solar Energy Society Inc. All rights reserved.