Solar industry leaders and Xcel Energy reached an agreement Tuesdaythat will allow the utility to fund another $97 million in incentivesfor home and small-business solar installations over the next year.
The money should fund, on a sliding scale, 60 megawatts of new solarinstallations, said Xcel spokeswoman Michele Aguayo. The incentive willpay $1.79 per watt for the first tier applicants, stepping downgradually to nothing after 20 megawatts for residential projects.Small-business installations will make up the rest of the total 60megawatts, Aguayo said.
The agreement came less than a month after the utility suspended its Solar Rewards program altogether in late February.
“It was one of our main objectives, to get to this agreementquickly,” Aguayo said. “Having everybody focused on it really helped.”
Xcel’s suspension of the Solar Rewards program in February has drawn ire, protest and unrest from the solar industries community, which said the loss of the incentive program could cost Colorado more than 3,000 jobs.
The utility suspended the program after it was inundated withapplications upon announcing in mid-February that it would reduce its$2.35 per watt payout to $2.01 after accepting applications for another 3 megawatts at the earlier, higher rate. The utility receivedapplications for all 3 megawatts within 24 hours of the announcement,Aguayo said.
It then suspended its program altogether while seeking permission from the utilities commission to cut payouts down to $1.25 per watt.
The new plan represents a compromise between the solar industry and the utility, Aguayo said.
“This gives us a roadmap,” Aguayo said. “It allows us to move forward in a predictable and hopefully judicious way.”
While the payouts are reduced, the program now has a structure sothat those interested in installing solar and those in the solarindustry will know what to expect.
“They’ll know that if they’re hesitant, there might be less money,” Aguayo said.
The $97 million should carry the program through the rest of 2011,Aguayo said. The 60 megawatts of new projects that this money will fundis in addition to the 43 megawatts that the utility is already committed to pay for, Aguayo said.
“That $97 million is within what we have felt Xcel and the ratepayers can handle,” Aguayo said.
The utility is allowed to collect up to an extra 2 percent on utility bills from the general public to fund renewable energy projects. Aguayo said the solar program had gotten so popular the fund couldn’t keep up.
“This is a lot of solar,” she said.
Altogether, the program will be committed to 103 megawatts of solarinstallation, which is as big as some of the largest public lands solarprojects underway in the Southwest.
Even with diminishing returns from the Solar Rewards program, Aguayosaid she expects to see applications pour in and would not be at allsurprised if all 60 megawatts are claimed before the end of theyear-long program commitment.
“I think we’re still going to see those people who are committed tosolar applying,” she said. “People who are committed to it are reallycommitted to it.”
The utilities commission still has to rule on the program proposalbefore it can be implemented and the Solar Rewards program can get backonline. That decision is slated for this Friday, March 18.