Wednesday, February 23, 2011

Xcel pulls plug on solar

"This is not just about Colorado – it’s also about stopping a national precedent from being set by two Colorado utilities that have pulled the plug on a growing solar industry". 

Blake Jones, Namaste Solar

Xcel Energy's abrupt cut to the Solar*Rewards program has sparked a wave of protest from distributed solar energy advocates across Colorado.

Xcel cut rebates on residential and commercial solar energy systems from $2.35 to $2.01 per watt on Wed, effective immediately.  The utility is seeking permission from the Colorado Public Utilities Commission (PUC) to slash incentives even further, from $.2.01 per watt to 25 cents per watt. 

Xcel announced a freeze on Solar*Reward applications until the PUC makes a decision on solar rebate reductions.

With no prior warning, the Xcel cuts have put Colorado's solar industry into a tail spin.  The Colorado Solar Energy Industries Association (CoSEIA) is calling for a Rally for Clean Energy Jobs on the West Steps of the state capital in Denver this Friday (details below).

Choking off the competition

In an email to its members, Neal Lurie, CoSEIA Executive Director said the move by Xcel, "has effectively frozen solar sales - with a devastating impact on small businesses and the Colorado economy. We can't let a monopoly choke off competition and curtail clean energy."

On its website, CoSEIA says Xcel is trying to destabilize the market for clean energy, "to protect its own monopoly... without stakeholder input or due process, reducing choices for consumers and putting thousands of jobs at risk".

The move by Xcel comes on the heels of the Pueblo area utility, Black Hills Energy, suspending its solar program last October, also without any advanced notice to the solar industry.

Ratepayer financed 

Both Xcel and Black Hills Energy sited falling solar PV prices and increased demand for small scale solar "outpacing funding" as a reason for cutting back ratepayer financed incentives.

Blake Jones of Namaste Solar, explained in Renewable Energy World, that tiered reductions were already built into the Solar*Rewards system that followed a predetermined schedule (see chart).  The fixed scale allowed industry to plan ahead as utilities adjusted rates according to changes in pricing and demand.   "It's unclear why Xcel...ignore[d] their own previous road map to the detriment of the local solar industry" said Jones.

The Solar*Rewards program is paid for by a 2% renewable energy charge collected from Xcel ratepayers.  The funds go into the Renewable Energy Standard Account (RESA) that utilities access for reimbursement on renewable energy related costs.  RESA provides full cost recovery plus a guaranteed profit to utilities based on a predetermined formula. 

According to a Colorado Energy News report, House Bill 1001, enacted last year to increase Colorado's Renewable Energy Standard to 30% by 2020, provides flexibility to help utilities reach RES requirements, "Similar to how utilities advance funds from year to year to add a new coal-fired plants, power gen companies can advance funds to add more solar".

Jones called the unilateral move by Xcel, "a departure from the expectations of Colorado's voters, explicit in 2004's voter-approved ballot initiative" that requires the RES and solar incentive program to, "contribute to building a sustainable solar industry in Colorado".

Monopoly power

The move raises the question; does Xcel want to use RESA funds to build its own, or purchase investor-owned utility-scale solar power?

"It's difficult to discern how much of [the 59 MW Xcel plans to purchase in 2011] is customer-sited and how much is utility-scale", says Jones.  "The 59 MW likely contains a single 30+ MW utility-scale PV project in [the San Luis Valley] that SunPower and Ibergoa are contracted to install".

HB 1001 allows the PUC to reduce the standard rebate for customer-sited rooftop solar PV, "if the PUC finds that the market no longer requires this level of subsidy".  In addition, the bill "allows a utility to develop and own, as part of its rate base, up to 50% of the DG capacity" at full cost recovery "at the same rate allowed for new coal-fired facilities" (See Section 3-4).

Thousands of jobs in jeopardy

Since its launch in 2006, the program has helped create of over 5,300 local jobs with 400 companies that collectively installed more than 70 MW of customer-sited solar 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 PUC.

According to the Community Power report just release by the Local Clean Energy Alliance, utility-scale central solar stations produce only a fraction of the jobs and local economic benefits that result from customer-sited solar generation.  

"This is an embarrassment to our state that might spoil Colorado's 'New Energy Economy' success story", said 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.



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

More information here

II.  SEND AN EMAIL to the Colorado Public Utilities Commission (PUC) urging them to deny Xcel Energy's request to slash the solar rebate by 88% (to $0.25/watt).

III.  Copy and share your opinion:

Key points to highlight:

· Xcel's 88% cut in the solar rebate from $2/watt to $0.25 threatens to destabilize Colorado's burgeoning customer-based solar industry

· Xcel's proposal could destroy thousands of green jobs causing significant economic harm to the public and state - ask the PUC to require due process with a full vetting of the facts, not an expedited hearing.

· the PUC should reject Xcel's request and require them to keep the original agreement with solar customers while a reasonable, predictable, transparent and independent approach is developed in collaboration with affected stakeholders

· Xcel's proposal goes against the intent of the 2004 voter-approved initiative and threatens to undermine Colorado's Renewable Energy Economy

Please spread the word.....

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