Wiser Capital Blog

October 3, 2014 | No comments yet

Incentives for Solar Dry up in California

Southern California Edison (SCE) announced via email that they would begin a wait list for their non-residential rebate program. What does this mean? It means that the California Solar Initiative rebate program is pretty much out of money for most home and business owners.

We should note that in San Diego the California Center for Sustainable Energy (CSE), , has about 2MW of capacity left and rebates for new homes and affordable housing are still available, but these represent just a small fraction of the original allocation.

While the rebates are gone, the industry isn’t going anywhere. Back in 2007 when the program began, California set a big goal of installing 1,940 MW of new solar electricity by 2016. They wanted to do this by bringing the market to scale and driving down costs. On both accounts this was a huge success. According to the Go Solar California website, California has 243,249 projects installed totally 2,289MW. This is equivalent in size to two nuclear power plants and it was installed two years before the legislature had hoped. When the program began cost per installed watt of solar was in the $7.00-$8.00 range. Today we see solar going for half of that price.

It is likely that the end of rebates will barely register in the history of solar in California. Pacific Gas and Electric (PG&E) ran out of rebate money in 2013 and yet they still see a healthy number of installations. This is because the cost of electricity from the utilities keeps going up while the cost of solar keeps going down.

Electric utilities are facing tough times with fluctuating fuel costs, drought impacting their cheapest supplies, long over-due upgrades to transmission and distribution systems, and disasters like the San Bruno explosion and San Onofre Nuclear Generating station. Solar on the other hand has seen equipment costs drop by 50% over the last 5 years. In addition, new financing structures have allowed home and business owners to get solar at little to no money down. Now the tech industry is diving into solar to reduce soft costs like sales, permitting, financing, and underwriting.

The CSI rebate program will definitely be missed. In addition to the economic incentives, it has served as a repository for solar data across the state, one that is unmatched in its depth and breadth of information. There are national programs that are trying to pick up the torch, like NREL’s Open PV Project, but without an incentive like CSI, few installers, developers, or system owners are likely to take the time to input this data.

Overall, CSI helped make solar an everyday reality for thousands across the state. More importantly though, it gave the solar industry the boost it needed to move beyond a couple of guys with a truck to multimillion dollar companies that are shaping the US economy (see the IPOs of SolarCity and Vivant).

Megan Birney is the Director of Strategic Affairs for Wiser Capital. She handles account management, platform implementation, business development, partnership initiatives and outreach.

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