Solar installers and Xcel Energy Inc. have reached an agreement to restart Xcel Energy’s Solar*Rewards Program, which was suspended in February due to cost concerns. Solar*Rewards pays homeowners and companies who have made and will make solar installments, such as turbines and solar panels, a rebate depending on the amount of energy produced.
The re-evaluated rebate will now pay its customers $1.09 per watt for 5 megawatts of power, whereas the former rebate called for a $1.79 per watt rebate, according to Xcel Energy’s website.
“The agreement maintains the economic benefits of this aspect of the renewable energy standard, while protecting the environment and consumers,” said TJ Deora, director, Governor’s Energy Office, in a press release.
Since the beginning of the rebate program, which was started to put more renewable energy on Xcel Energy’s grid in 2006, the utilities company has spent $177.5 million. Some customers will also receive a separate payment for renewable energy credits produced by the renewable energy system they have installed, helping with the cost of installing these expensive turbines and solar panels.
When Colorado’s Amendment 37 was approved by voters in 2004, the renewable energy standard (RES) called for Colorado investor-owned utility companies serving more than 40,000 customers, such as Xcel Energy, to purchase 30% of its energy from renewable sources by 2020, according to the Database of State Incentives for Renewables and Efficiency (DSIRE) website. The RES law, which originally set the standard at 20 percent, approved Bill Ritter’s proposed 10 percent increase as the new standard in March 2010.
With an ambitious goal that is set to be accomplished by 2020, the decision to amend the Solar*Rewards Program will prove successful. It is projected that with Xcel Energy’s new plans for its rebate program, the company is expected to pay $97 million in 2011, which is a 44 percent increase from what Xcel Energy paid in 2010, according to the new Solar*Rewards Program document.
“We… favor the switch to performance-based incentives for all installation levels as a way to reduce annual costs of the program.” Carrie Hitt, president of the Solar Alliance, announced in a press release.
The new incentives for the solar rebates through Xcel Energy’s program are based on performance of the solar installations to alleviate financial woes and get the company stable enough to provide more renewable energy opportunities to Colorado businesses and homes.
There have been 2,200 approved renewable energy systems to be installed on Colorado homes and business this year, which is 14 percent decrease from the number of approved systems in 2010, although Xcel Energy expects many more to be installed throughout the year, according to the Solar*Rewards Program document.