Record Pace of Solar Rebate Program Participation Exhausts Program Budget, Reflecting Lower Solar Technology Costs
|LOS ANGELES – Facing a record demand for solar rebates, growing safety concerns, and some apparent misinformation to LADWP customers by some solar PV installers, the Los Angeles Department of Water and Power (LADWP) placed a temporary hold on accepting new applications for its Solar Incentive Program, effective at 11:59 p.m. on Friday, April 8, 2011, for a minimum of 90 days. During this period, LADWP will review and revise the program, which has seen the number of applications grow each month to over 2,000 applications currently in process. In addition more and more solar photovoltaic (PV) systems are being turned on without proper inspection, creating a safety hazard.
The temporary hold on accepting new applications is necessary to revise the program guidelines to better serve LADWP customers and align with current solar PV market conditions. With one of the highest solar photovoltaic (PV) incentive rates in California, generous federal tax benefits and rapidly dropping solar panel prices, the number of solar rebate applications continues to grow each month and has exhausted funding for the next four years at the budget levels established for the program at its outset in 2007.
“It is clearly time to pause and review our program incentive levels. Our rebate levels, while reduced from levels paid in prior years, is about double the minimum level required by SB 1. We fully support and want more renewable energy and we want to foster solar technology, but not at undue expense to our customers who pay for this important program,” said Ronald O. Nichols, LADWP General Manager. “We need to be smart about how we provide incentives and that starts with ensuring we are doing so in a fiscally responsible manner. This suspension will allow us time to determine the proper rebate level and align it with the current solar PV market. During the review, we will honor all applications we have received and processed, but we will reset the rebate at a lower level when the program is resumed. This approach will ensure we get the most solar bang for our buck, while continuing to provide a strong incentive for our customers to go solar.”
As of April 1, 2011, the LADWP Solar Incentive Program had confirmed requests for $112 million in solar rebates, but only $30 million is budgeted annually for the program. The State of California program guidelines established by Senate Bill 1 in 2006 require that it be suspended when the amount of confirmed and unpaid rebate reservations exceeds the availability of funds to honor those reservations in a timely manner.
“Our solar incentive rebate application clearly indicates that customers need approval of their applications to be assured of receiving LADWP’s rebate, and that inspections are required prior to energizing their systems. Some customers have informed us that the contractors who installed the rooftop PV systems have indicated there is no need to delay installation while LADWP reviews their applications”, said Aram Benyamin, Senior Assistant General Manager for Power for LADWP. The LADWP program, similar to other SB 1 programs of other utilities, provides for payment upon installation and final inspection. “The result is some customers are apparently misinformed by their installation contractors, have paid in some cases tens of thousands of dollars for PV systems that were installed without confirmation by LADWP, counter to the rules of the program, only to find that they have long waits for rebates due to the deluge of applications”, Benyamin explained. “We cannot continue to allow this to happen.”
LADWP has taken steps to address the safety issue by mailing safety notices to all customers with pending solar installations, posting a safety advisory on the Web at www.ladwp.com/solar, and contacting solar contractors and vendors directly about the problem.
Solar Rebate Program Review
SB 1 Program Status of Other CA Public & Private Utilities
To read additional background information on the LADWP Solar Incentive Program, please click here.