Dim solar outlook looms - Rebate Funds dwindling [Fresno Bee]
Industry fears that $50m in state rebates may run out by the year's end.
source: Robert Rodriguez The Fresno Bee 2003.8.14

California's bright solar industry could grow cloudy if a state-funded rebate program runs out of money sooner than expected.

The rebates -- which pay up to half the cost of a residential solar energy system -- were due to expire in 2006. But the state's high utility rates, a hot summer and an increasing awareness of solar power triggered a rise in rebate requests and a dwindling of funds in recent months.

"We have seen more applications in the last three months than we have seen in the last three years," said Claudia Chandler, assistant executive director for the California Energy Commission. "The response has been phenomenal."

A recent commission report showed that the agency received more than 3,300 applications for rebates in the second quarter of 2003, compared with 1,000 applications in the previous quarter.

Almost 70% of those requests came in after June, and 1,900 came in during the last week of that month.

To date, more than $82 million in rebates have been issued and more than 5,300 alternative-energy systems have been installed, a vast majority of which are solar. An estimated $50 million remains in the state's rebate program.

At the current rate, that amount could be depleted by the end of the year. Solar system installers worry that without the state's help, the $300 million-a-year industry could stall, or worse, dry up.

"For some people, it's not going to be worth investing in solar without the rebate," said David Brown, sales director for Solahart All Valley of Clovis. "Sales are going to stop, and that doesn't make any sense."

Brown was recently overseeing the installation of a massive 324-solar-panel system in the Selma area that will shave 80% off homeowner Harry Stepanian's utility bill.

Stepanian will use the system to produce energy for two homes on his family's farm. And he agreed that without the rebate funds, he couldn't afford the system. They paid for about half the cost.

"The reason I got this was because I was tired of paying high prices," said Stepanian, who would not comment on the overall price. "I was paying over 300% more per home this year than last year."

State officials say the idea of the rebate program was to create enough interest in renewable energy so that the cost of a system would eventually drop to an affordable level. That's hasn't quite happened. The average residential solar energy system still costs between $8,000 to $9,000, with rebates and other tax credits.

"We are not quite there to be on our own as an industry," said Mark Luft, sales manager for Unlimited Energy in Fresno. "But as soon as we get over that hill, and solar becomes more mainstream, the prices will drop."

Luft and others in the industry want to see the rebates extended. Chandler said that is not beyond the realm of possibility.

"We could look at reallocating funds from other areas, but that would not be done without an open public workshop involving all aspects of the renewable energy community," Chandler said. "The fact is we are doing everything possible to ensure there are funds available through 2006." Chandler also did not rule out the possibility of going to the Legislature for additional funding.