The Rebate Tide

Rebates and tax incentives have been flowing like a tide. High tide for the solar industry in Colorado has just happened. Everybody wants it, and heck the price can be reduced up to half with rebates. The payback is not great but those panels look pretty cool on a roof. Although it’s complicated in Colorado, basically voter amendment 37 requires the private power service providers allow for a small percentage of a renewable portfolio for roof mounted solar power. They got permission to raise everybody’s rate and use that money to subsidize the solar panels. This effectively lets the wealthier solar lovers get half off and forces poorer rate payers to help pick up the tab. Furthermore a clean energy portfolio is out of sequence with what is generally considered a better initial investment, demand side control. None the less the amendment got the job done, solar on roofs.

Now the tide is rolling back as the private energy suppliers have fulfilled their mandate and a lot of solar companies will be left high and dry. The smart ones will expand their offerings by either cutting cost (by potentially doing shoddy work) or expanding their portfolio to include energy conservation, hence lowering the amount of solar needed. Another model has emerged that allows renting solar. This concept started in Africa and the Middle East in the nineties where companies rented a panel and battery to a family to provide basic power. Soon you can rent panels for your grid tied home in Colorado. This solves the lower income solar problem with proper government support, but still cannot address the problem of demand.

The next rebate tide is coming and this time energy audits and insulation will be in it. How will this market develop? Will the emerging green building companies flourish? And most importantly will we finally start to take the consumption of energy seriously? While I remain a bit skeptical I know we are pointing in the proper direction. A real change will require energy prices to reflect their true cost via a tax or cap or simply supply and demand. If the green building industry is properly mature by then we will be ready to lead the effort in adapting to a new energy economy.