Solar Industry Opposes Cutting Incentives

Cuts Could ‘Devastate’ Solar Industry

Members of Colorado's solar industry say plans by Xcel Energy to cut incentives for solar arrays will devastate the industry.

“This basically pulls the rug out from underneath the solar industry,” said Nick Perugini, a commercial solar adviser for Bella Energy. “Xcel’s kind of struck the fatal blow to the solar industry in Colorado. The solar industry is currently relying on incentives.”

Utility customers who install small solar arrays on their property receive two types of incentives -- a rebate and renewable energy credit -- for a combined $2.35 per watt. Xcel Energy said Wednesday the combined incentives will drop to $2.01 per watt.

Xcel has filed paperwork with state regulators seeking to further slash the incentive to $1.25 per watt. Xcel officials say the cost of solar panels is decreasing and the number of government subsidies for solar installations is increasing.

But the Public Utilties Commission could take up to seven months to rule on that request, a PUC spokesman said.

"Solar Rewards was established to encourage customer adoption of on-site solar and to make sure the technology is included in Colorado's energy mix. The program has been successful and we want to continue to offering it to our customers," Xcel said in a release. "Since the program began in March 2006 and through the end of 2010 ... we've distributed $178 million in rebates to customers. The solar industry continues to grow, and the technology is becoming more affordable. As the cost of on-site solar drops, we need to be able to adjust the incentives accordingly. Customers pay for Solar Rewards through a two percent charge on their electric bills. We are responsible for ensuring these funds are used wisely."

Xcel spokeswoman Michelle Aguayo told 7NEWS that incentives and subsidies had been accounting for 75 percent of customer costs, rather than the 50 percent goal sought when the program began, adding that the solar industry had been getting the vast majority of customer-funded renewable energy incentive funds.

“This is a very healthy industry. We believe that that health will continue,” Aguayo said.

A meeting Thursday with solar companies was held downtown but Xcel reps said it was a private business meeting and the media was not allowed to attend.

Neal Lurie of the Colorado Solar Energy Industries Association contends the move would jeopardize renewable energy's gains in the state.

Solar companies said that the slash in incentives would lead to job loss, with 5,300 people now in direct solar industry jobs.

"If Xcel is successful in their requests to the PUC, Colorado's 100-plus solar installers are sure to be out of business before the end of 2011," said Greg Koss, owner of Adobe Solar in Golden.

“We see this as the result of really good work from our solar industry to help bring costs down," said T.J. Deora, director of the governor's energy office. "This is simply an acknowledgment of the success in the industry. Conceptually this rebate cut is appropriate and reasonable. I think we’ll have to study the proposal as a whole. It also may be a pretty severe drop-off in incentive. But the magnitude and the timing of that reduction is a question. We have to balance making sure we have a strong, vibrant, growing photovoltaic industry with the other things Xcel is concerned about.”

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