Starting today, the combined Solar*Rewards incentive for small, customer-owned systems (0.5 – 10 kilowatts) will be paid at $2.01 per watt, from the previous $2.35 per watt. The medium and third-party-owned programs will be adjusted similarly.

Posted by Ann Rascalli

Xcel Energy also filed with the CPUC for approval to change the rebates for participants at the four program levels. For example, upon commission approval Xcel Energy plans to offer a combined incentive of up to $1.25 per watt for small systems.

The changes to the Solar*Rewards program were met with dismay by local solar companies who said the move will severely hurt the industry.

“In one move, Xcel would slash the incentives to such a degree that it would fundamentally destabilize the marketplace,” said Neal Lurie, executive director of the Boulder-based Colorado Solar Industries Association.

“We established Solar*Rewards to stimulate interest in installing solar systems on homes and businesses, and to make sure the technology is part of Colorado’s energy mix,” said David Eves, president and CEO of Public Service Co. of Colorado, an Xcel Energy company.

“The program has been successful in doing that. We’re increasingly optimistic in our ability to meet the goal for customer-sited solar as required in HB 1001, which increased Colorado’s Renewable Energy Standard to 30 percent by 2020.

The changes are prompted by the decline in solar panel costs and increasing subsidization from government programs. Together, these developments have reduced the level of Xcel Energy incentives needed to support customer participation in Solar*Rewards.

The new incentive levels will continue to provide support to the market while investing customer funds prudently, according to Xcel.

The company will accept applications for up to three megawatts of customer-site solar energy between today and the commission’s approval of its filing. By the end of the year, Xcel Energy projects that it will have committed for up to 59 megawatts of customer-site solar, compared to 27.5 megawatts in 2010. Since the program began in March 2006 and through the end of 2010, 76 megawatts of on-site solar energy have been installed, with $178 million paid in incentives.

According to Deutsche Bank, the cost of solar panels has dropped 50 percent from 2008 to 2009. The Colorado Solar Energy Industries Association reports the industry grew by 91 percent last year.

“Just as wind energy is now more competitive, solar energy is moving in that direction too,” Eves said. “Xcel Energy is committed to creating a clean energy future for Colorado at a reasonable cost to our customers.”

Xcel Energy will file a Renewable Energy Standard Plan with the CPUC this spring that outlines the future of Solar*Rewards, consistent with market conditions. This will include a plan for 2012 and beyond, including Solar Gardens.