State extends solar rebate system
California’s solar rebate program has been extended for 10 years, and coupled with a new federal tax break, it could make alternative sun energy systems more attractive for consumers.
Earlier this month, the California Public Utility Commission created the California Solar Initiative, a $2.9 billion rebate program that consolidates several rebates already being used. The rebates will be for systems as small as those for heating water to major agricultural and commercial institutions.
At Sierra Solar Systems in Grass Valley, Systems Engineer Jonathan Hill said the new rebate could bring “roughly one-third off the entire costs” of installing a home system, which is “$10,000 and up, and for an average PG&E customer, close to $20,000.”
Solar systems are attractive to those who can afford up-front costs because years of free power can result after a system is paid for. They also stop fossil-fuel pollution, which is the state’s gain on getting them installed.
The new program is not quite as good as a state rebate plan several years ago that took about one-half off the costs. However, for the tax years 2006 and 2007, the IRS is offering an income tax credit for solar installation that would be 30 percent of the system after rebate cost, with a $2,000 cap for a home. There would be no cap for a commercial system.
The new state rebate program “Is the second largest incentive program in the world, next to Germany’s,” said Martin Webb, owner of Plan It Solar in Penn Valley. “Now we can count on long-term funding; the current solar rebate program is only for one or two years.”
Webb said he and other solar installers hope the new rebate program will cause factories and facilities to open or expand in California to meet the demand. If fully expended, the rebates would help power the equivalent of 1 million new residential solar systems, according to Vote Solar, a San Francisco environmental organization that deals in sun energy and lobbied for the initiative.
“With this initiative, California becomes a leading player in the solar industry,” said Bob Hambrecht of the WR Hambrecht and Company investing firm in San Francisco. “Currently, solar energy is a $6 billion global industry and is expected to grow dramatically to $30 billion by the end of the decade” because of the initiative.
The program and tax credit seemingly pencil out best during the next two years when the credit is available. For 2006, solar system installers will get $2.80 per watt with the state rebate, but that will drop 10 percent per year as the program continues.
To pay for original and dwindling rebates, state consumers will be charged on their power bills. An average consumer will pay about $12 per year on electricity bills and $1.40 annually on gas bills, according to the state Public Utilities Commission.
The program sets aside about 10 percent of the money for low-income customers and affordable housing installations. Another 5 percent will go for solar research and demonstration projects.
To contact senior staff writer Dave Moller, e-mail email@example.com or call 477-4237.
How to go solar
There are several solar system installing companies listed under “Solar” in the yellow pages of the Grass Valley-Nevada City SBC phone book.
You can also learn about solar at the 6:30 p.m. Feb. 17 potluck and program meeting of the Sierra Club at the Seaman’s Lodge in Nevada City’s Pioneer Park. Woody Hastings will speak about current tax credits and rebates for solar consumers.
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