The website “Environmental Leader” reported that Xcel Energy cut their per watt rebate by one dollar – 22% – to $3.50 (US) last October. At the time, the reduction was most noteworthy not for the dollar value, but the swiftness with which Xcel made the cut. According to the website’s report, the reduction occurred just 30 hours after it was announced. Now news comes that Xcel is considering another cut in the rebate.
REC Solar reported that “Xcel plans to reduce the rebate amount for the SolarRewards program in the next 30, 60, or 90 days.” According to the story, the reason for the three options was to avoid the onslaught of applications that Xcel received when they announced the short turn around in cutting their rebate back in October.
Per watt costs to purchase and install a photovoltaic systems in Colorado ranged between $7.50 and $8 per watt at the end of last year. At those prices, the current rebate amounts to a bit more than 40% of the overall cost. However, Real Goods Solar, which “solarizes” house in Colorado and California, claimed that the adjustment is aimed at keeping the rebate in line with its original price targets. “The rebate has been designed to offset 50% of the system cost. Due to falling panel pricing over the last 8 months, the average price of a solar system has decreased from $7.50/W to $6.50/W.” Real Goods Solar goes on to state that “A similar decrease was used to justify the last rebate decrease.”
Regardless of the reasoning behind the cut, the fact that Xcel is considering a reduction serves as a disincentive to both residential and commercial customers. Without the financial incentives to reduce the cost of photovoltaic systems, the upfront cost causes these systems to be prohibitively expensive for most homeowners. Combined with federal tax rebates though, Xcel’s SolarRewards programs still offers consumers a distinct economic incentive.
[image source: Flickr.com]
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