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ASPEN — A surge in the number of Roaring Fork Valley homeowners installing solar photovoltaic systems this year has created an unanticipated problem.
Two special funds used to offer rebates to homeowners who install the sun-powered systems have already been drained just five months into the year. Holy Cross Energy has allocated almost $1.1 million in solar rebates. The Community Office for Resource Efficiency, better known as CORE, blew through its $200,000 budget.
“We spent our rebates in the first four months of the year,” said CORE interim director Nathan Ratledge.
CORE started informing solar installers six weeks ago that its $200,000 fund for rebates was running short. The Aspen-based organization gives a $2 rebate per watt for solar photovoltaic (PV) systems installed, with a cap of $6,000 per project. It is still giving rebates, but reduced the cap to $1,500 for the remainder of the year.
“This just totally caught us off guard,” Ratledge said. “Everybody's looking at it as a good problem to have.”
The problem can be viewed as the glass being half full or half empty. On the one hand, the surge in solar rebates shows valley residents have embraced renewable energy.
But without rebates to offset the substantial cost of installing solar PV systems, the momentum might be lost, according to two Carbondale contractors who install the systems.
Ed Cortez, owner of El Sol, fears fewer people will turn to clean energy without the financial incentive to install systems. The interest among homeowners has been high.
“I'm getting calls up the yazoo,” he said. But he anticipates that will slow now that the financial incentive is fading.
Scott Ely, who started Sunsense in 1990 and has steered the firm through steady growth, said the loss of the incentive is already impacting the decisions of some people who are interested in the systems.
“The phone's not ringing as frequently from Holy Cross territory,” he said.
Holy Cross Energy, which provides electricity to the majority of Roaring Fork Valley residents, has over the past few years offered $1.1 million annually in rebates for customers who installed renewable energy projects. The program has grown dramatically since it was created in 2004. No photovoltaic systems were installed that year, but last year there were 55 projects reaping $569,000 in rebates.
This year, slightly more than $1 million was allocated to 92 projects by the end of May, according to Steve Casey, who oversees the green programs for Holy Cross. “It's been astounding to us,” he said.
Like CORE, Holy Cross gives a solar rebate of $2 per kilowatt, with a cap of $20,000 per project. (The city of Aspen, Eagle County and Xcel Energy also offer rebates for solar PV projects in the valley.) Most projects consist of a few solar panels installed on a rooftop or next to a house. The power produced by the panels offsets some or, in a few cases, all of the power consumed by the household.
Casey said the average size of projects that received rebates from Holy Cross in 2008 was 5.2 kilowatts.
The surge in interest in solar projects this year was spurred by changes in the federal tax code. The federal government allows a tax credit equal to 30 percent of a solar PV installation cost, minus any rebates, Ely said. The cap on the size of tax credit was removed this year — providing greater incentive.
Some homeowners waited until 2009 to install projects because they knew the tax code change was coming. Holy Cross Energy officials knew that would affect the solar rebates, but they didn't anticipated draining their fund by the end of May, said CEO Del Worley.
“Yeah, it's a success,” he said. “We figured if it picked up, if the pot ran out, the solar installers would want more.”
Currently, the utility devotes 2 percent of total revenues to its “We Care” green programs, ranging from the solar rebates to free energy audits for residential customers. The solar rebates absorb about half of those funds. There is only a limited ability to adjust that amount, Worley said.
“At some point, there's got to be a finite pot,” he said.
CORE's Ratledge said there are no plans to shift more funds into the organization's solar rebate program.
Ely said Holy Cross has been “progressive” on green issues and it wasn't his place to critique how they handle their solar rebate program. But the reality is, solar PV is an incentive-driven market, so rebates are important.
“Not having any rebates [from Holy Cross] until 2010 is quite a blow,” he said.
Holy Cross is starting a waiting list for its solar rebates. All homeowners seeking a solar rebate must fill out a pre-application. If some of those projects don't get built, people on the waiting list could still get their rebate.
Worley and Casey anticipated that the Holy Cross board of directors will discuss the rapid use of the rebate fund this year and determine if changes should be made.
“In the coming months, we will be evaluating this conundrum we find ourselves in right now,” Casey said.
scondon@aspentimes.com
Two special funds used to offer rebates to homeowners who install the sun-powered systems have already been drained just five months into the year. Holy Cross Energy has allocated almost $1.1 million in solar rebates. The Community Office for Resource Efficiency, better known as CORE, blew through its $200,000 budget.
“We spent our rebates in the first four months of the year,” said CORE interim director Nathan Ratledge.
CORE started informing solar installers six weeks ago that its $200,000 fund for rebates was running short. The Aspen-based organization gives a $2 rebate per watt for solar photovoltaic (PV) systems installed, with a cap of $6,000 per project. It is still giving rebates, but reduced the cap to $1,500 for the remainder of the year.
“This just totally caught us off guard,” Ratledge said. “Everybody's looking at it as a good problem to have.”
The problem can be viewed as the glass being half full or half empty. On the one hand, the surge in solar rebates shows valley residents have embraced renewable energy.
But without rebates to offset the substantial cost of installing solar PV systems, the momentum might be lost, according to two Carbondale contractors who install the systems.
Ed Cortez, owner of El Sol, fears fewer people will turn to clean energy without the financial incentive to install systems. The interest among homeowners has been high.
“I'm getting calls up the yazoo,” he said. But he anticipates that will slow now that the financial incentive is fading.
Scott Ely, who started Sunsense in 1990 and has steered the firm through steady growth, said the loss of the incentive is already impacting the decisions of some people who are interested in the systems.
“The phone's not ringing as frequently from Holy Cross territory,” he said.
Holy Cross Energy, which provides electricity to the majority of Roaring Fork Valley residents, has over the past few years offered $1.1 million annually in rebates for customers who installed renewable energy projects. The program has grown dramatically since it was created in 2004. No photovoltaic systems were installed that year, but last year there were 55 projects reaping $569,000 in rebates.
This year, slightly more than $1 million was allocated to 92 projects by the end of May, according to Steve Casey, who oversees the green programs for Holy Cross. “It's been astounding to us,” he said.
Like CORE, Holy Cross gives a solar rebate of $2 per kilowatt, with a cap of $20,000 per project. (The city of Aspen, Eagle County and Xcel Energy also offer rebates for solar PV projects in the valley.) Most projects consist of a few solar panels installed on a rooftop or next to a house. The power produced by the panels offsets some or, in a few cases, all of the power consumed by the household.
Casey said the average size of projects that received rebates from Holy Cross in 2008 was 5.2 kilowatts.
The surge in interest in solar projects this year was spurred by changes in the federal tax code. The federal government allows a tax credit equal to 30 percent of a solar PV installation cost, minus any rebates, Ely said. The cap on the size of tax credit was removed this year — providing greater incentive.
Some homeowners waited until 2009 to install projects because they knew the tax code change was coming. Holy Cross Energy officials knew that would affect the solar rebates, but they didn't anticipated draining their fund by the end of May, said CEO Del Worley.
“Yeah, it's a success,” he said. “We figured if it picked up, if the pot ran out, the solar installers would want more.”
Currently, the utility devotes 2 percent of total revenues to its “We Care” green programs, ranging from the solar rebates to free energy audits for residential customers. The solar rebates absorb about half of those funds. There is only a limited ability to adjust that amount, Worley said.
“At some point, there's got to be a finite pot,” he said.
CORE's Ratledge said there are no plans to shift more funds into the organization's solar rebate program.
Ely said Holy Cross has been “progressive” on green issues and it wasn't his place to critique how they handle their solar rebate program. But the reality is, solar PV is an incentive-driven market, so rebates are important.
“Not having any rebates [from Holy Cross] until 2010 is quite a blow,” he said.
Holy Cross is starting a waiting list for its solar rebates. All homeowners seeking a solar rebate must fill out a pre-application. If some of those projects don't get built, people on the waiting list could still get their rebate.
Worley and Casey anticipated that the Holy Cross board of directors will discuss the rapid use of the rebate fund this year and determine if changes should be made.
“In the coming months, we will be evaluating this conundrum we find ourselves in right now,” Casey said.
scondon@aspentimes.com
