News today that Xcel and the solar p-v industry have reached an agreement to keep the rebates going.
Xcel Energy and the solar-installation industry reached an agreement Tuesday that will cap incentives at $97 million over the next 12 months for home and small-business solar panels.
The key element of the Solar Rewards accord is a 56-cent-per-watt cut in solar subsidies and a new sliding scale that will trim the incentives as more megawatts of solar installations are built.
For residential systems, the incentives will start at $1.79 a watt and will step down gradually until they are eliminated after 20 megawatts of new projects. The incentive had been $2.35 a watt when Xcel suspended the program in February.
Small-business systems also will have stepped-down incentives.
The $97 million should cover 60 megawatts of solar installations, on top of the 43 megawatts of projects to which Xcel is already committed, said company spokeswoman Michele Aguayo.
She said the new incentive structure will spread the money over more projects.
Residential systems average between 5 and 10 kilowatts, according to industry data.
Xcel filed with the Colorado Public Utilities Commission last month to cut the subsidy to $1.25 a watt and halted the program pending a commission decision.
Representatives of solar-installation companies, which employ 5,300 people, said Xcel's unilateral action jeopardized their businesses and that up to 3,000 jobs could be lost.
The PUC ordered the sides to negotiate. It will review Tuesday's accord Friday.
"This agreement gives the solar industry the predictability we need," Carrie Hitt, president of the trade group Solar Alliance, said in a statement.
There has been a steady ratcheting down of the incentives from $4.50 per watt in 2009.
A major reason Xcel has sought to trim the incentives is because the price of solar installations has dropped in the past few years by 50 percent, company officials said.
Solar-industry representatives agreed but argued that cuts had to be orderly.
"We continue to strongly support a program structure of transparent incentive steps, which decline as solar capacity targets are hit," Hitt said.
More than 7,100 systems with $178 million in incentives have been installed since 2006.