Jon Harrington: Good news for solar energy in Colorado
The Solar*Rewards Program by Xcel Energy will be reinstated this month at a reduced up-front rebate and an extended performance based renewable energy credit (REC). The rebate program compromise was agreed upon by PSCo and the solar energy industry. The Public Utilities Commission heard a full day of testimony, mostly supporting the agreement hammered out between Xcel, Colorado Solar Energy Industries Association (COSEIA) and The Solar Alliance.
In deliberation, the three PUC members agreed to the settlement “with reservations.”
This has been a long, dry period for solar sales in Colorado. On Feb. 16, Xcel Energy abruptly halted the successful Solar*Rewards program. At that time, Xcel proposed the PUC approve dropping the rebate from $2 per watt of installed solar power to $0.25 per watt. They shut down their rebate program at that time to await a decision by the PUC, and asked they rule in an expedited decision so the much lower incentive based program be initiated by May of 2011.
In answer to the action by Xcel, COSEIA filed a request that Xcel reinstate the Solar*Rewards Program immediately. “COSEIA believes such conduct evinces bad faith and a breach of the public trust in the administration of the Solar*Rewards program and may be in violation of the statutory prohibition against discrimination,” claimed COSEIA’s attorney. “By taking the extraordinary step of closing its Solar*Rewards program to new applications, the company has brought the market for small (less than 100 kW) residential and commercial solar installations to a dead standstill.”
Xcel claimed the Solar*Rewards program was too successful. The solar industry had far exceeded the expectations of the Xcel Solar*Rewards program management. Because the program is funded by a 2 percent charge to Xcel customers, the rate of rebate applications has exceeded the funding available, so Xcel needed to borrow to pay the rebates. Claimed COSEIA: “Rather than rewarding the solar industry for its ability to install more solar projects at decreasing incentive rates, however, PSCo’s (XCEL) approach is to punish the industry for its success.”
The PUC in a hearing on March 4 turned the issue back to the interested parties to hammer out a compromise. The proposed compromise plans to reinstate the Solar*Rewards program in this month, with an original rebate offer for small-party-owned systems of $1.75 – paid up-front – per watt, and $0.04 per kWh paid over 10 years. This will ratchet down quite rapidly to more performance-based incentives, meaning the price per kWh will increase as the up-front rebate drops from $1.75 to $1.00 to $0.50 to $0.00.
In the public comments, Dr. Schechter of the Colorado Office of Consumer Affairs stated that the proposed agreement was “in the public’s best interest.”
Johnathon Koehn, regional sustainability coordinator for the City of Boulder, was concerned about the process, specifically Xcel’s abrupt curtailment of the rebate program. “The customer and the citizen perceive that there has been a loss of credibility in the rewards program,” said Koehn. “The movement to performance-based REC payments will make solar installation only for the rich, and make solar installers become financiers.”
After a nearly full day of testimony, the PUC ruled in favor of the compromise and a final document will be signed on Monday.
Jon Harrington is co-owner of Alpine Earth Center in Silverthorne.
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