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US solar power surge drains funding for PV rebates

15 Jul 2010

A dramatic surge in solar power system sales has depleted the rebate funds available from UniSource Energy Services (UES) to subsidise the installation of photovoltaic (PV) arrays at local homes and businesses, according to the company.

The surge has also prompted UES’ sister company, Tucson Electric Power (TEP), to propose new, lower subsidies for residential customers who install PV arrays

UES said its customers are on track to install 500 solar power systems in 2010, exceeding the total number of systems completed over the previous seven years combined.

Rebate requests received in June alone under the federal rebate programme introduced earlier this year, however, consumed nearly half of the company’s $5.2m budget for up-front incentives in 2010.

‘Interest in solar power systems has exceeded even our most optimistic projections, giving us a real boost toward achieving our renewable energy goals,’ said David Hutchens, vice president of energy efficiency and resource planning for UniSource Energy, the parent company of UES.

New requests for incentives are being placed on a waiting list until the Arizona Corporation Commission (ACC) determines how the company should proceed.

UES said it could wait until new resources are available next year to restore up-front rebates by tapping funds now preserved for performance-based incentives or raise additional resources through customer surcharges.

Increased demand for UES SunShare subsidies has been driven in part by reduced costs for solar power systems, the company said. The prices of installed PV systems in Arizona have dropped to about $5 per watt from nearly $12 per watt in 2006, while UES’ incentives have remained unchanged.

The pace of rebate reservations also quickened after Phoenix-based utility Arizona Public Service reduced its PV incentive levels to $1.95 per watt in April, encouraging PV installers to step up their marketing efforts elsewhere.

TEP experienced a similar surge in recent rebate applications that exhausted its 2010 funding for up-front commercial system rebates and prompted a request for lower residential incentives.

UES has asked the ACC to make $6.7m available in 2011 for up-front incentives that would be reduced to reflect higher demand and lower PV prices.

Residential customers would be eligible for rebates of $2.25 per watt, down from $3 per watt, while up-front incentives for commercial systems would be reduced from $2.50 to $2 per watt. The ACC is set to review this proposal later this year.

Arizona’s Renewable Energy Standard calls on electric utilities to increase their use of renewable energy each year until it represents 15 per cent of their power in 2025.

Copyright © 2010 NewNet

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One Response to “US solar power surge drains funding for PV rebates”

  1. I worry also that the solar rebates will be eliminated for residential customers. I really hope not.

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