Thoughts on Solar

The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area.  (You can read more detail about all of these incentives on our Solar Financing page.)

Federal Tax Credit

Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit.  Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019. 

The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you.  (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.)  For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility.  Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.

Utility Rebates

Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions.  We have rank ordered the local utilities below, based on the reliability of their rebate program.

Pasadena Water & Power

The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power.  Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.

As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit).  Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system.  Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.

Los Angeles Department of Water and Power

LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.

That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits.  Just don’t hold your breath.

Burbank Water & Power and Glendale Water & Power

These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.

Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year.  Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.

Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15.  In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.

Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.

We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.

Azusa Light & Water

The “Solar Partnership Program” in Azusa is fully subscribed.  There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.

Anaheim

The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.

Southern California Edison

SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated.  Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!

Pasadena Water & Power (PWP) is about to slash its rebates by as much as 55% effective May 1 - the first rebate reduction in three years. Here are the details…

A Model of Stability

We have said it before and we will say it again, our hometown utility gets the highest marks for running the best, hands down, rebate program around.  Their folks are responsive, they have offered a consistent program since we got into this business, and their rebates have been among the highest offered in our service area.  The present rebate rates: $0.85/Watt for residential and small commercial, $1.60/Watt for small non-profit systems have been at that level since 2012 - even while system prices dropped by 25%.  (For large systems > 30 kW, the commercial rebate was 12.9¢/kWh of actual production paid over five years, while the non-profit version was 24.2¢/kWh.)

But all good things must end, including these great rebates - and they will, come May 1.

The Rates They are a Changin’

The new rates are significantly less generous - $0.45/Watt for residential and small commercial, $0.90/Watt for small non-profit.  For larger systems the change is even more dramatic, with the rebate payout now only covering two years of production (instead of five) at the rate of 14.4¢/kWh for commercial and 28.8¢/kWh for non-profit.  (One bit of good news, the threshold for systems to be paid rebates over two years instead of at commissioning is going up from 30 kW to 100 kW.)

Leaving Money on the Table…

So what do these rebate reductions really mean?  Let’s look at a few examples.

Residential project - 5 kW

A typical residential project of 5 kW (AC) that submitted a rebate application before May 1 would secure a rebate worth $4,250 (as opposed to na da in SCE territory).  That same system will only receive a rebate of $2,250 - leaving an even $2,000 on the table.  Ouch!

Non-Profit project - 50 kW

A 50 kW non-profit project would earn, over the next five years, a rebate worth approximately $92,400.  But after May 1, only two years of payments will be made worth just $44,600 - a 52% reduction, leaving $47,850 blowin’ in the wind.  Double ouch!  The one side benefit, since this project is smaller than 100 kW (even though it is over the old, 30 kW threshold) it could qualify for the up-front rebate of approximately $39,200 at the time the system is commissioned - less money overall, but you get it faster.

Commercial project - 150 kW

A commercial project of 150 kW under today’s rebates would earn roughly $148,000 over five years, but for rebate applications submitted after May 1, that rebate drops to just $66,900, a reduction of 54.7% leaving nearly $81,000 waving bye-bye.  Brutal.

So… Don’t Just Sit There!

All is not lost, yet.  We still have a month and if you act RIGHT NOW you can still take advantage of the higher rebate rates!  To lock-in the higher rebate, we need to get your energy usage, do a site evaluation, send you a proposal, have you accept the proposal and sign a contract, and we need to get your rebate application on file before May 1.  (I feel a bit like our friends at KPCC - “we need 67 people to call in the next five minutes to meet this challenge…")  Yeah, that’s a fair amount of work in a short time, but if you jump on this opportunity, we can make it happen and you can save some serious money!  So don’t miss the boat…  Call us, or click on the “Let’s get started” link here to begin.

Solar rebates are rapidly becoming an endangered species, but there are still a handful of refuges out there for the lucky few who reside in those areas. Here is our update on who is offering what as of January, 2015.

Although there are lots of ways to approach this, we figured that the most entertaining would be to rank-order each utility in the Run on Sun service area from best to worst in terms of their rebate program (and we will toss in a handy summary chart at the end).

Pasadena Water & Power (PWP)

Beyond a doubt, the best run solar rebate program in our service area is provided by our hometown utility, Pasadena Water & Power.  The folks at PWP have figured out how to provide generous rebates on a predictable schedule while keeping bureaucratic annoyances to a minimum.  Boy could its neighbors learn a thing or two from PWP!

Here are their numbers as of today:

Residential: $0.85/Watt EPBB; 12.9¢/kWh PBI.
Commercial: $0.85/Watt EPBB; 12.9¢/kWh PBI.
Non-Profit: $1.60/Watt EPBB; 24.2¢/kWh PBI.

Keep in mind, those numbers have been in place for a long time (since 2012!) and we expect them to drop some time this year.

Anaheim

Anaheim is offering some big rebate numbers, but they offer a ridiculously small window of opportunity for snagging them.  Specifically, the window is about to open and you need to submit a rebate application between today, January 15, 2015 and two weeks from today as the window closes on January 29!  After that you are out-of-luck until the next window is set.  For those who can jump on the opportunity, here are the numbers:

Residential: $1.25/Watt EPBB; n/a PBI.
Commercial: $1.10/Watt EPBB; 11.0¢/kWh PBI.
Non-Profit: n/a.

Which brings us to the problem children…

Azusa

Azusa has a rebate program, maybe.  But what it really has as of now is a waiting list.  Good luck with that.

Burbank Water & Power (BWP) and Glendale Water & Power (GWP)

Burbank and Glendale feel like the same city so its not surprising that their local utilities seem to act in lock step.  Both utilities arguably offer rebates, but unlike PWP - their more intelligent neighbor to the East - neither BWP nor GWP can figure out how to keep a rebate program open for more than a few weeks (days?) at a time.  They say they are victims of their own success, but we see it as a sign of bad planning.  (Oh, and don’t get us started about GWP’s alleged Feed-in Tariff program which after a year and a half is yet to have a single application submitted! Genius!)

As for now, all the unfortunate residents of these two communities can do is wait until the new fiscal year in July and hope that some funds will be allocated.

Southern California Edison (SCE)

In SCE territory the party is officially over - there are no more rebate funds available, and despite the Governor’s call for 50% of electricity to come from renewables by 2030, there are no moves a foot to refund the CSI program.  This is unfortunate beyond the lack of funding - with the demise of the CSI rebates, so goes the CSI data since that was only gathered as part of the rebate process.  As a result, we lose a major solar incentive along with a major source of market data for the largest solar market in the country!  More genius!  (Here’s a thought - since SCE still requires us to go through the interconnection agreement process - via email - why not collect the data that way?)

Los Angeles Department of Water & Power (LADWP)

LADWP offers a rebate, but they have the most excruciating process ever for getting it.  (Think of that wealthy Uncle who could easily help you out, but is going to make you bow and scrape before he cuts loose with some ducats, and you get the picture.)  Moreover, non-residential rebates are going away in favor of the Feed-in Tariff program, but for small commercial or non-profit customers, that option simply doesn’t pencil out. 

For those residential customers with the patience to outlast the bureaucrats, here’s their rebate:

Residential: $0.40/Watt EPBB; n/a PBI.

Frankly, that’s just not worth the trouble.

In Summary

So here’s the overall results for all of these utilities:

While rebates are going away, the 30% federal tax credit is still in place, and will continue through the end of 2016. Carpe diem!

We have just learned that the City of Burbank will once again be offering rebates for a very limited number of solar installations.  Here are the details.

The total program is limited to projects below 30 kW; larger projects need not apply.

The program will pay rebates to residential customers at $1.28/Watt (CEC-AC) and $0.97/Watt for commercial customers.  There is no carve out for non-profits, however they say that such entities “will be given lottery priority."  Burbank says that is anticipates having enough funding for 50 residential and 10 commercial projects, with the allocation evenly split between the two.  That figures to be around a total of 500 kW, 50 residential at 5 and ten commercial at 25 kW each.  Surely the demand in Burbank is greater than that, so how will they handle the inevitable over-subscription?  Easy - Burbank is holding a lottery.

Throughout the month of July, applications can be delivered to the offices of Burbank Water & Power.  Then, on August 12, 2013, Burbank will hold a lottery and application numbers will be selected at random.  (Not sure how that squares with giving non-profits “lottery priority".) The lucky few winners will be notified by August 16, 2013.  “Winning” applications will have 1 year to complete their installation.

Questions about the program can be addressed to Solar Support Program Managers John Joyce or Alfred Antoun.

Not a great program by any stretch, but at least, for a while, Burbank is back in the game.

We have just learned that Burbank Water and Power (BWP) - which had suspended its solar rebates back in April 2011 - is introducing what might be the most bizarre rebate procedure ever - a rebate lottery!  Here is the text of the announcement in its entirety from the BWP website:

Direction for how the program will accept new applications effective July 1, 2012 will be provided by the Burbank City Council on June 26. Staff is proposing the following:

1. Retain the current policy of dividing the remaining non-Performance Based Incentive (PBI) budget amount evenly between residential and small commercial solar installations. This is projected to provide approximately $60,000 in incentives for each customer category.
2. Lottery applications would be accepted from July 1 through September 1, 2012.
3. On September 4, 2012, BWP would use a lottery system to provide an order of rebate consideration for both residential and commercial (including Not-for-Profit organizations)solar applications. Priority will be given to business accounts that fall under a not-for-profit designation.
4. Applicants will be notified in early September of their lottery number and application status. ”Winners” will be provided one month to meet all previously defined system application requirements through BWP’s online PowerClerk system, including, but not limited to, a signed contract, meter service confirmation, and City permit application approval.
5. Rebates would open at Step 6: $1.28/watt for residential installations and $0.97/watt for commercial installations.

Additional details will be posted on this web site in early July 2012. If you have additional questions please contact the program manager at solarsupport@ci.burbank.ca.us

If this announcement is to be taken at face value, this means that they will be setting up a two-month lottery for the chance to be one of maybe 12 residential projects to get a rebate and only one fo 2-4 small commercial projects.  Seriously?  All this Sturm und Drang for a grand total of 16 rebates?  With no way for a BWP customer to know in advance whether they will be one of the lucky “winners"?

We sent an email to the address above asking for some clarification, but as of this publication we have not received a reply.  If you think this “lottery” is as silly as we do, please send an email to solarsupport@ci.burbank.ca.us - maybe they will be more willing to respond to you!