Los Angeles homeowners: your solar rebates may be on the chopping block.
Due to falling solar panel costs and an overstretched solar rebatebudget, the Los Angeles Department of Water and Power (LADWP) hasproposed cutting by 30 percent its solar energy incentive for home and business solar energy installations. That, according toKen Button, owner of the southern California solar power installerVerengo Solar Plus, would add roughly $4,000 for homeowners and $40,000for business owners in up-front costs.
According to the Los Angeles Business Journal, the LADWP Board is scheduled to vote on the proposal next month. Ifapproved, the rebate reduction would take effect immediately and willhave an effect in other areas aside from increasing out-of-pocketexpenses for L.A.-area property owners. The rebate reduction is likelyto scale back demand for solar installations in the area. Consequently,installation companies like Button’s Verengo Solar Plus will have torescind plans to expand its workforce or even layoff current employees.
For its part, LADWP maintains it simply does not have the funds tocontinue offering its Los Angeles solar rebate at the current level.Assuming all pending applications are filled, the utility would have tomore than double the current budget of $31 million to ensure allapplicants receive a rebate. Since money is tight, LADWP says it has nochoice but to reduce the program.
What does this mean? First, it bears noting that the solar rebateavailable in greater Los Angeles is already higher than what’s available from the state’s other big utilities, like Pacific Gas & Electric(PG&E), San Diego Gas & Electric (SDG&E) and SouthernCalifornia Edison (SCE). So, if you’re a L.A. homeowner or businessowner who is interested in installing solar power, consider yourselfrelatively lucky.
Second, when it comes to demand outstripping supply of solar rebates, LADWP is by no means alone in this regard. We have seen the same storyplay out across the country. Most recently, SRP — an Arizona utility —put the kibosh on its solar rebate program until 2011. The reason? Toomany applications for too few dollars.
Finally, the Los Angeles solar rebate tale offers a general lesson:when it comes to installing solar power, it’s advisable to start yourproject early so that you have the best chance of locking in a solarrebate, or other incentive, before funding runs dry. We’ll do our bestto keep you up to date on how the LADWP story pans out.