Friday, February 18, 2011

Xcel Energy slashes Solar Rewards

Xcel Energy dealt an enormous setback to local solar this week by reducing the ratepayer financed Solar* Rewards program by 47%.    Xcel cited lower cost solar panels and increased demand when it announced that it would reduce payouts for its Solar Rewards Program in Colorado on Wednesday.

Effective almost immediately, the program will be reduced to $2.01 per kilowatt hour of installed solar from the previous $2.35, according to the Xcel press release.  Xcel is allowed to collect 2% of energy premiums annually from consumers through the Renewable Energy Standard Account (RESA) to reinvest in renewable energy.  According to an Xcel spokesperson, "We need to watch how we’re investing consumer money and diversify our energy portfolio.”

Since the program started in March 2006 to the end of 2010, 76 megawatts (MW) of residential solar energy have been installed under the program at a cost of $176 million.

By comparison, San Luis Valley industrial solar developers estimate the cost of constructing 200 MW of centralized solar generation would range between $500 million and $1 billion.   In addition,  RESA costs to ratepayers are expected to be an additional $200-500 million, for the recently approved new Xcel high voltage powerline needed to export solar energy from the remote, southern Colorado Valley.
Blake Jones of Namaste Solar, explained in Colorado Energy News, that as solar PV costs fell, Xcel reduced its incentives proportionately according to a tiered schedule that allowed solar customers to plan.  This system maintained market stability.  "It's unclear why Xcel...ignore[d] their own previous road map to the detriment of the local solar industry" said Jones.

Since its launch in 2006, the program resulted in the creation of over 5,300 local solar jobs with 400 companies that collectively installed more than 70 MW of customer-sited PV systems.  Jones predicted that "over 50-75% of these jobs will be lost by the end of the year", if Xcel's actions are approved by the CPUC.

"This is an embarrassment to our state that might spoil Colorado's 'New Energy Economy' success story", stated Jones.  "Xcel's regrettable and surprising act demonstrates the urgent need for a reformed incentive program that will help build a sustainable solar industry, and in Colorado's case, I strongly believe that this requires that the incentive program be independent from Xcel Energy and Black Hills Energy's control" Jones concluded.

Neal Lurie, executive director of the Colorado Solar Energy Industries Association, called the move "unjust, anti-competitive, and bad for the Colorado economy" in a press release. “The people have already voted to make solar job creation and clean energy development a priority in our state - and we need to stand up for our right to a level playing field and stable marketplace,” said Lurie.  

A massive protest is being organized on Fri, Feb. 25th in Denver.  See the letter from Colorado Solar Energy Industry Alliance below, for details.    
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Another important step we can take to restore Community Power is to support HB-1228As explained in the previous post, the bill directs the office of economic development to commission a study on the potential benefits of distributed renewable energy for job creation and retention in Colorado, to be completed in late 2011.  Let your State legislators know that Coloradans want green jobs and local clean energy in time for the hearing on HB 1228 in the House Agricultural, Livestock and Natural Resources Committee this Wed, Feb 23rd.  Please go to the "Support 1228" website and add your name today!  

Yesterday afternoon Xcel Energy announced it has suspended its solar program.

Xcel is no longer accepting Solar*Rewards applications until after a PUC decision on incentive levels, expected this spring - effectively freezing solar sales throughout the region.

It's clear that Xcel is trying to disrupt the solar marketplace and flex its monopoly muscle to reduce choices for consumers. Worse yet, it comes on the heels of Black Hills Energy stopping its solar program.

This is unjust, anti-competitive, and bad for the Colorado economy.

We the people have already voted to make solar job creation and clean energy development a priority in our state - and we need to stand up for our right to a level playing field and stable marketplace.

COSEIA and partner organizations are planning a huge rally to protest these unjust actions - and to highlight a new path forward.

Friday, February 25, 12pm
Colorado State Capitol - West Steps
200 E. Colfax Avenue
Denver, Co 80203

We look forward to working together to send a clear message that the people of Colorado want clean energy jobs.

Best regards,
Neal Lurie
Executive Director, COSEIA

More on the story:

Feb 18, 2011- Colorado Energy News: GEO Weighs in on Xcel's Solar Incentives Cut

Feb 17, 2011 - The Denver Post: Xcel cuts solar incentive: Solar-energy execs are in an uproar as the utility asks for further reductions

Clean Energy Authority: Solar Rewards program's payout reduced 

Colorado Energy News: Xcel Energy Cuts Solar Incentives - Effective Immediately

Northern Colorado Business News: Xcel's incentive reduction could impact solar investment

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