Xcel Energy, the largest provider of electricity in Colorado has been at the center of a solar renaissance largly through no fault of their own. If you get Xcel electricity then you were able to get a deep discount on a solar electric system that would be the envy of your non Xcel customer friends at almost half of the sticker price, until last week at least. Xcel has decided to unceremoniously pull the plug on the Solar*Rewards rebate program to the surprise of hundreds of solar companies that grew from the rebate frenzy.
I have not been the biggest fan of this system as I have always contended that efficiency is above all the soundest investment that has the added bonus of comfort and health. Alas the consumer has spoken and they want solar panels at good prices. Along comes the first voter approved amendment in the country for renewable energy, and part of Amendment 37 is a distributed energy resource as a percentage of the total renewable profile, subsidized by rate paying customers of publicly traded companies under the direction of the Public Utilities Commission. Whew.
The result is cheap solar for those who can afford it which is subsidized by all rate payers. This actually is a good thing, public policy approved by voters to tax themselves to provide renewable energy for themselves (if they happen to live in a for profit service provider area) is a very forward thinking step. The result is huge demand and a flourishing and competitive market of solar providers. The solar trade group CoSIEA has hundreds of members which have seen a real demand for solar energy with growth nearly doubling in the last year. If you don’t like subsidies I would suggest you protest your gasoline supplier as your bear your outrageousness on the small companies that we are speaking of. This is a bold step in developing a viable clean energy future that we all ultimately will benefit from.
That growth has been in large part due to the financial stability of a rebate program mixed with reduced equipment costs, a competitive landscape and strong demand. This four legged chair just had a leg cut off by Xcel Energy and previously by Black Hills Energy. Xcel’s news release claims that the price of solar equipment is now competitive, and with the government subsidizing solar and Xcel fulfilling their obligation of Amendment 37 they are happy to abandon this program because of its success at creating a marketplace.
Now as I mentioned I am not a big fan of subsidizing solar energy without a comprehensive energy efficiency effort. Nor do I like seeing solar electric get moving while solar thermal stands at the side of the track waving goodbye, but the train has long left the station. With the sudden drop in support the train very well may be going off the cliff. When Black Hills dropped their rebate program installs almost disappeared. CoSIEA is estimating about half of the 5300 jobs in solar will be lost in short order. We just lost another leg of our proverbial chair (sorry about the mixed metaphors by the way.)
"We look forward to the industry's continued progress so that it can ultimately become self-supporting," Xcel Colorado president David Eves said in a statement.This was a believable notion as Xcel had a schedule of slowly stepping down their rebates in an orderly and timely manner with the consensus of solar companies. By cutting off the rebate program immediately and stripping all credits to the bone Xcel (and Mr. Eves?) is really saying to me “We are tired of dealing with you pesky small solar companies and distributed energy is such pain so we’ll try to run you out of business even though it really cost us very little.”
This is the only reasonable conclusion I can have at Xcel’s behavior after their touting of themselves as such a green corporation. They are well aware of the instability it will cause for solar companies who have tight margins and high overhead. Most planned projects will have to be put on hold and renegotiated, many of them undoubtedly being cancelled. The market is also very young and has not given the industry much time to ramp up supply with demand. Xcel says they have met their requirements and is proud of the work they did but I am not so sure they are not meeting the expectations of the electorate (and their customers) who clearly wants a thriving renewable energy marketplace. A two legged chair is not what the public wants.
So that is the background. Will the industry fall apart like it did in the eighties? Will Xcel back off like they did when they made other unpopular decisions that quickly drew the wrath of consumers (like a surcharge for solar owners) or will the PUC come in to settle things down? One thing is for sure, Xcel will not be burdened with the reputation of being a “green” utility.
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