Archive for August, 2010
Affordable Solar Electric via Feed-in Tariffs?
The National Renewable Energy Lab (NREL) reports that feed-in tariffs are responsible for 75% of solar photovoltaic and 45% of wind projects worldwide. Feed-in tariffs (FITs) require utilities to pay per kilowatt-hour to purchase electricity from renewable energy generators. They enable stable and reliable pricing, and small generators and large plants have an equal opportunity to compete. Countries in Europe, especially Germany, France, and Spain, have used feed-in tariffs to greatly increase renewable energy production because of their increased cost-effectiveness. For example, California receives 70% more sunlight for producing solar energy than Germany does, though the latter installs 15 times as many solar electric systems per year due to the effective use of FITs.
Generally, green markets in the United States lack strong federal support, and instead, progressive states like California create markets and regulations that eventually spread to the rest of the country. Though many states have established FITs before, institutional resistance, too high or too low pricing, and bureaucracy have rendered them virtually ineffective. California is again taking the lead and has recently proposed to launch a new variation of the tariff. In California, investor-owned utilities will be required to purchase electrical energy from renewable generators that are 1MW-20MW in size.
New York recently pushed a bill for FITs on Long Island, but it did not pass. The Long Island Power Authority (LIPA) already awards large rebates (up to half of system cost!), and the 25% New York State and 30% federal tax credits have already made solar systems incredibly cost-effective. We can only hope that pushes for cost-effectiveness like the FIT can get the United States on par with our European friends.
Long Island Power Authority Reduces Solar Rebates Once Again
When I first came to EmPower Solar as a lowly intern in June of 2009 (don’t worry, now I’m full time, with a degree), the Long Island Power Authority (LIPA) was paying solar system owners $3.50 per watt of electric power capacity installed as part of its Solar Pioneer Program. That means the utility could literally pay you $35,000 – half the total cost – for a typical 10kw residential system. This is not including federal and state tax credits, which can further reduce the cost to owners.
I came back to EmPower full time upon completing my degree earlier this summer, when rebates were down to $2.00. After a few weeks, we got word that the rebates were going down even further, and might even dry up for the rest of the year! Luckily that didn’t happen, but rebates have officially been lowered to $1.75 per watt for up to 10kw or $17,500.
What does this mean for homeowners who want to go solar? Well, fortunately system costs have gone down as well. It’s a typical effect of supply and demand: demand for solar panels have skyrocketed in the past few years nationwide, so industry kicked up production and took advantage of economies of scale. It’s still a great time to go solar, as rebates tend to stay somewhat proportional to system cost. But it is likely that utility rebate funding will indeed dry up in the near future. This is a tribute to the success of the program – and the awesome fact that Long Islanders are supporting the clean energy mission – but the money won’t be available forever. If you are at all considering going solar, now is the time. Solar panels are cost effective anyway, but you don’t want to miss the chance to have LIPA pay a large chunk of your system cost and reduce the payback by a few years. Given the speed at which rebates have been dropping, there is no predicting how long they’ll last.
See for yourself a rebate update on LIPA’s Solar Pioneer Rebate Block Guidelines Site website. If you follow some links to the rebate block graph, you can see the rate at which the rebates are being dispersed.
Energy Stimulus Money Slow to Spend, But Making Strides for Solar on Long Island and New York State
Of the $3.2 billion that the economic stimulus package of 2009 allocated towards energy efficiency and conservation, only 8.4% had been spent as of the beginning of this month. An Audit Report was released by the Department of Energy last week examining the status of funds granted to the Energy Efficiency and Conservation Block Grant Program under the Recovery and Reinvestment Act. The DOE disbursed most of the available funds for projects that would increase energy efficiency and reduce energy use and fossil fuel emissions. However, after a year only $269.7 million had been spent, producing or saving just 2,265 jobs.
Why the delays in spending? Low levels of spending and job creation were clearly not the desired outcome of this program. But the one-year analysis found impediments to implementation including administrative and regulatory issues at the federal, state, and local levels. A shortage of Department staff and abundance of federal controls have made it difficult for local governments to spend money as planned. More details on these issues can be found in the status report.
The Department of Energy had the chance to respond to this audit and argued that the program was more successful than made to appear by this report; much of the money has actually been committed to projects so there is promise of spending in the near future.
What does this mean for solar? Although most stimulus grants for renewable energy technologies are given through other areas, like the State Energy Program leg of the Recovery Act, the Energy Efficiency and Conservation Block includes solar power on government buildings. According to the New York State Energy Research and Development Authority (NYSERDA) and Governor Paterson back in March 2010, $24 million of this block funding was awarded for clean energy projects in small municipalities across New York state. Plans for this money included both solar photovoltaic and thermal systems on various facilities including fire stations, libraries, and town halls. Here is the breakdown of funds for Long Island:
It’s great to see that New York municipalities are on board and in many cases leading the mission of spreading solar energy and efficiency!
Act Now – LIPA Rebate Funds are Running Out!
If you are at all considering going solar, you don’t want to miss out on the fleeting opportunity to have up to 35% of your solar electric system paid for by LIPA.
The current rebate is $2.00/watt (up to 10KW) for a residential solar electric system. That means LIPA will potentially pay up to $20,000 of the system cost! However, it is possible that the LIPA Rebate will run out in the next two weeks and there are no guarantees that rebates will be available in the future.
The chart below was taken from the LIPA webpage:
This graph shows that as of August 6, 2010 the Solar Pioneer Rebate (which is the Residential program) is almost gone. There are only 200 KW left for the year – that’s only 20 residential systems for all LIPA customers! Just to give you some more insight, in the last three weeks the block went from 500KW to 800KW. Within the next couple of weeks, the Solar Electric Rebate will likely disappear for the rest of the year.
If you would like to proceed with a solar electric system, there’s no time to waste if you want to secure these rebates. Please call our Sales Manager, Joe Cordes, at your earliest convenience at 516-286-1477 and we can get you started. We will have to submit your Rebate Application before they close the program for new applicants!
Invest with confidence. Act now.