Incentives for Solar Energy Projects Drive Interest
In an effort to boost solar installations for businesses and homes, SolarCity, a solar provider, and utility Xcel Energy have created two very different programs to increase the use of renewable energy.
SolarCity has received $90 million in new funding from U.S. Bancorp Community Development Corp. (USBCDC) to finance commercial and residential projects in 2010. The financing plans allow companies to add solar without actually paying for the panels themselves.
The new funding will be used to finance SolarCity’s SolarLease and power purchase agreement (PPA) offerings as the company continues to expand into new states. Currently, the solar company operates in five states: Colorado, Texas, Arizona, California and Oregon.
Financing options under the SolarLease program allow customers to make monthly payments with zero money down for their solar installations. SolarCity says customers typically save more on their monthly electricity bills than they pay for their monthly payment. The company offers a solar calculator that enables customers to estimate their solar lease payment and potential electricity savings.
This is USBCDC’s third round of funding for SolarCity, bringing the total to $190 million for solar projects in 2009 and 2010.
Currently, SolarCity, together with other solar providers, are fighting Arizona House Bill 2701 that would allow utilities to use existing nuclear and hydroelectric power to meet the RES requirement, and put solar energy regulation under the domain of both the Arizona Corporation Commission (ACC) and the Arizona State Legislature.
Xcel Energy is offering a different type of incentive program as part of its 2010–2012 Conservation Improvement Program to get Minnesota electricity customers to install rooftop solar panels on their homes and businesses. The utility’s Solar*Rewards program will give customers a one-time payment of $2.25 per installed watt of generating capacity to help offset the cost of installing small or medium rooftop systems, with a capacity of 0.5 kilowatts to 40 kilowatts, reports Nano Patent and Innovations.
As an example, the incentive payment would be $7,875, or about 30 percent of the installation costs for an average size residential installation of 3.5 kilowatts or 3,500 watts, according to Xcel Energy.
Customers may also receive rebates from federal, state and local government agencies. However, late last year, several states had to cut back on rebates when they ran out of funds due to their popularity, which resulted in the creation of some additional incentive programs.
In return for the incentive payment, Xcel will own the Renewable Energy Credits (RECs) produced by the system for 20 years. The utility will also buy any energy that a system produces in excess of the customer’s needs.
Xcel Energy expects to install about 2 megawatts of solar energy each year for the next three years, or approximately 450 installed systems annually, under the Solar*Rewards program.
Other benefits include the addition of more renewable energy to the grid as a result of the excess energy produced, which also further reduces emissions, says Xcel.
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