Xcel announced last week the solar rewards program incentives have dropped one more tier – from 9 cents/kwh to 8 cents. This is for customer-owned solar electric systems. Third party (lease option) systems are now at 5 cents /kwh. If you look at an average sized system, this drop in incentive amounts to about $750 to $1000 over the 10 year incentive payout. The sum of incentive payments over 10 years still amounts to $6,000 to $10,000. With the cost of modules at an all-time low, it is a great time to invest in solar.
Senate Bill 252 is a real break-though for the solar industry and rural Colorado. For years, RECs have been reluctant to offer any solar incentives for their members, although they have been required by law to allow customers with small (<10 kw) renewable systems to connect to their electric grid and use net metering. With Senate Bill 252, rural electric cooperatives (RECs) and their suppliers will have to increase their renewable portfolio and offer customers some incentives to install solar.
All Xcel rebates in the small category (<10 kW) are now production based incentives (PBI). Customer-owned systems can receive $.13 per kWh for 10 years. Although there are no upfront rebates available, the PBI is a significant incentive if you look at a 10 year timeline. In addition to saving about $.12 per kwh for your generated energy, Xcel sends you a check for the same generated energy at $.13 per kWh. A typical payback is 8 years.
Xcel Energy has requested another rate increase through the Public Utilities commission (PUC). The $240M hike includes $53M to cover carrying costs for excess capacity.
Black Hills Energy recently received $23M in rate increases to recoup costs associated with additional generation construction.
The story behind the capacity increase begins in 2004 when Xcel told Black Hills they would not extend the contract for 300 MW of generation. Xcel energy predicted they would need an additional 1000 MW of capacity by 2010 and could not spare any generation. Since then, the forecast has been cut to 292 MW. Meanwhile, Black Hills built two gas fired plants at the Pueblo Airport of 180 MW and 200 MW, costing them $227M and $260M. The PUC allowed the $23M hike to Black Hills to help recoup the total generation construction cost of $487M and additional transmission costs.
Now Xcel wants ratepayers to pay for the excess generation due to their planning miscalculation.
I received a notice of change of electric rates from Xcel Energy that states the request is for $141.9M. The interim request is $100M or about $2.70 per month for the average residential customer. The new charge will be included in the GRSA line of our bills.
The Xcel Energy rebate is now at $1.00 per watt, and the Renewable Energy Credit (REC) is 9 cents per kWh. A 5 kW system will receive a $5000 upfront rebate, and about $675 per year for 10 years ($56.25 per month) if the system output is 7500 kWh per year. (based on optimum installation orientation and performance)
The Governor’s Energy Office (GEO) closed down the Recharge Colorado rebate program as part of the state office. Now the Recharge Colorado program is a non-profit organization that continues to assist renewable customers through rebates and technical assistance. see www.rechargecolorado.org
Xcel attempted to stop the renewable energy rebate program (SolarRewards*) in March. PUC directed Xcel to continue the program with a new payout structure. Solar electric customers now receive a production based incentive (PBI) for ten years at 4 cents / kWh instead of the REC up-front payment of $.35 per watt. The rebate portion was also reduced to $1.50 per watt.
Now Xcel is adding another fee to our bills above the 2% RESA charge! The “fair share RESA” charge is based on PV Solar System Size. We will pay $1.03 for systems up to 5 kW, $2.05 for 5 to 10 kW systems.
What will Xcel try next to discourage renewable energy?
February 16th – a day to remember for all Xcel customers and the solar energy industry. Xcel Energy announced they have filed with the Public Utilities Commission to reduce the current rebates for new solar installations. The current residential rebate of $2.35 per watt (<10kw) includes a rebate of $2.00 and a REC (credit) of $.35. Their proposed total rebate is $1.25 which includes a rebate of $.25 and REC of $1.00. In the interim, before the PUC commission decides, Xcel set the REC at 1 cent and rebate at $2.00. However, Xcel froze all new applications, so the interim is moot.
What frustrates the solar industry most is the action of Xcel to abruptly stop the program when a plan was in place to reduce rebate payments gradually as the renewable energy standard goal was met. The REC component is scheduled to drop to zero as the total residential capacity reached about 100 MW. Renewable Energy Standard Adjustment (RESA) income from a 2% rider on Xcel customer billing provided the funds to continue the Solar Rebate program. We voted to continue supporting renewable energy.
This action will cause a storm before the PUC meeting in May, and most likely the rebates will be restored to some degree, but the damage to the solar industry has been done!
Black Hills Energy suspended its solar rebate program citing internal problems with the administration of the program. In the past Black Hills was criticized by the PUC for lacking specifics in their compliance reports.
I hope that Black Hills Energy somehow gets back on track with the essential solar program. I suggest some program management training for utility employees or have Black Hills Energy subcontract the work to an independent consultant.
Xcel Energy applied for a Certificate of Public Convenience and Necessity (CPCN) as suggested in my blog a few months ago. Xcel is attempting to recoup SmartGrid costs that are now about three times the original budget estimate (the original budget was $15.3M, and costs are estimated at $44.8M). A rate increase was requested in 2009. Approval of the CPCN is necessary to move on the rate increase for SmartGrid.
I think it is time to stop throwing good money after bad. Xcel has shown they cannot deliver on the promise of SmartGrid. Only 43% of the meters in Boulder are converted to the Landis and Gyr (L&G) Focus meter, and customers have found that real-time energy data is not readily available through the Xcel “My Account” website.
Xcel officials claim the extent of the costs could not be fully known before contruction began on the first large scale test of its kind! However, they could have asked or performed some due diligence.
Let’s hope the PUC catches on.
The REC portion of the renewable energy rebate is now at 55 cents per watt. That places the total rebate and REC for small PV systems at $2.55. With only 1 MW in this tier, it will fill quickly.
The Solar Program for Xcel is very particular with program applications. If your application or deposit forms have the slightest deviations from their format, they will reject your application and make you start the process over. Be sure to dot all i’s and cross your T’s. I have had a deposit returned because the Xcel logo did not appear on the deposit form, although all information was correct. This caused a two week delay in the application, which kicked my application into the next tier – losing a couple thousand dollars for my customers.
Please be diligent.. The Solar Program can be very frustrating.