Local utility the Long Island Power Authority (LIPA) just reduced rebate levels offered through its Solar Entrepreneur Program, and a new performance-based structure for all rebates is in the wings.
The solar energy market on Long Island has long been dependent on LIPA’s rebate incentive programs to make solar energy affordable to homeowners and others. LIPA rebates jumpstarted the local move to solar starting in 2001 with the Solar Pioneer Program for homeowners and, soon thereafter, with the Solar Entrepreneur Program for small businesses, municipalities, schools and non-profits.
LIPA’s popular solar energy programs encourage the installation of photovoltaics (PV, for short, or solar-electricity) by cutting ratepayers’ long-term utility costs, while also incrementally reducing carbon emissions and the drain on the power grid.
“If it hadn’t been for LIPA’s solar incentives, I doubt very much that we’d see so many homes and businesses make the switch to solar energy,” said Dan Sabia, president of Built Well Solar Corp., a long-time Long Island solar installer. Today, more than 4,300 PV systems have been installed on the rooftops of homes, businesses, schools, not-for-profit and municipal buildings through these programs, according to LIPA.
Two other factors have made solar energy more affordable since then — lower prices charged by manufacturers for solar modules and attractive solar energy tax credits, a federal one at 30% of cost and a New York State one at 25% of cost capped at $5,000. These factors no doubt contributed to LIPA’s decision to reduce rebate levels for both programs over the years. For example, in contrast to a $6.00 per watt rebate that launched the program over a decade ago, today’s Solar Pioneer rebates are currently the lesser of $1.75 per watt or half of system cost for homeowners up to a maximum of 10 kilowatts or $17,500, a level that has remained for more than a year now.
Equivalent reductions took place on the Solar Entrepreneur side over the years, although larger system sizes were eligible because these entities obviously have greater kilowatt hour usage levels. Until very recently, rebates for small businesses offered through LIPA’s Solar Entrepreneur Program were offered at the lesser of $1.75 per watt or 50% of cost for solar-electric systems up to a maximum 50 kW system size. This meant as much as $87,500 was provided by LIPA as an incentive for a commercial location to install a PV system on their roof or property.
Starting this week, however, these rebates were reduced to the lesser of $1.50 per watt or 50% of cost for solar-electric systems up to $75,000 for a maximum 50 kW system size. That means a small business now has to come up with as much as an extra $12,500 to pay for solar-electricity system under the reduced rebate plan.
Rebates for municipalities, schools and non-profits, traditionally the highest offered since these non-taxpayers cannot take advantage of the tax credits, were also just reduced. These went from $2.50 per watt up to $125,000 for the maximum 50 kilowatt PV system to just $2.00 per watt up to $100,000 for the maximum 50 kilowatt PV system, calling for up to an extra $25,000 out of pocket.
Meanwhile, the even bigger news is that LIPA will soon revamp both rebate programs. “LIPA’s Solar Pioneer and Solar Entrepreneur Programs transition from a capacity-based incentive to an expected performance-based buydown (EPBB) incentive design is now forecasted to take place somewhere in the second quarter of 2012,” LIPA’s Manager of Renewable Programs Robert Boerner said.
Details about the structure and eligibility process have yet to be announced, but the idea is to reward those homes and other sites with ideal solar-producing conditions with greater rebate dollars than those with marginal conditions.