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Xcel Cuts Solar Payments to Business

Utility Xcel Energy is lowering the payments it makes to businesses that plan to generate solar energy under its Solar*Rewards program.

Effective yesterday, Solar*Rewards incentives for small customer-owned systems (0.5to 10 kW) will be paid at $2.01 per watt, down from $2.35 per watt. The medium and third-party owned programs will be adjusted similarly.

Applications already approved will be paid at the previously agreed upon amounts.

Xcel also filed yesterday with the Colorado Public Utilities Commission for approval to change the rebates for participants at the four program levels. Xcel Energy plans to offer a combined incentive of up to $1.25 per watt for small systems.

Xcel said it was making the changes due to a drop in the cost of solar panels, and higher subsidy levels from government programs.

According to Deutsche Bank, the cost of solar panels has dropped 50 percent from 2008 to 2009. The Colorado Solar Energy Industries Association reports the industry grew by 91 percent last year.

“Just as wind energy is now more competitive, solar energy is moving in that direction too,” said David Eves, president and CEO of Xcel subsidiary Public Service Co. of Colorado. “Xcel Energy is committed to creating a clean energy future for Colorado at a reasonable cost to our customers.”

By the end of the year, Xcel Energy expects that it will have committed for up to 59 megawatts of customer-site solar, compared to 27.5 megawatts in 2010. Since the program began in March 2006 and through the end of 2010, 76 megawatts of on-site solar energy have been installed, with $178 million paid in incentives.

“We’re increasingly optimistic in our ability to meet the goal for customer-sited solar as required in HB 1001, which increased Colorado’s Renewable Energy Standard to 30 percent by 2020,” Eves said. “We look forward to the industry’s continued progress so that it can ultimately become self-supporting.”

Feed-in tariffs (FITs) are responsible for 75 percent of all solar photovoltaic (PV) and 45 percent of all wind development worldwide, according to a report from the National Renewable Energy Laboratory (NREL),

Minneapolis-based Xcel has 3.3 million electricity and 1.8 million natural gas customers in eight western and Midwestern states. Last May it said it was on track to cut CO2 emissions 15 percent by 2020.

Rapid recent falls in solar and wind price are likely to spur adoption, Reuters has reported. The price of solar panels, or modules, is expected to fall another 10-25 percent in 2011.

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