The new year is well underway (Happy New Year!), and so it is timely to revisit the question of financial incentives to Go Solar in the Run on Sun service area. (You can read more detail about all of these incentives on our Solar Financing page.)
Beyond a doubt, the most significant incentive for going solar is the 30% federal tax credit. Previously set to expire at the end of this year, the federal solar tax credit was extended late last year, continuing at the present 30% through 2019.
The credit applies to solar installations in every utility’s territory, so no matter where you live in the U.S., this credit applies to you. (NB: this is a tax credit, not an income deduction, so you need the tax “appetite” to take full advantage of this incentive - check with your tax advisor.) For residential clients, the basis for the credit is the full cost of your solar project, less any rebate that you might receive from the utility. Commercial clients, who must declare any rebate as income, do not need to deduct their rebate from the system cost when calculating the basis.
Once common everywhere, utility rebates are going the way of the dodo—with one or two notable exceptions. We have rank ordered the local utilities below, based on the reliability of their rebate program.
The big winner, again and by far, is the solar rebate program operated by our own Pasadena Water and Power. Year in and year out, PWP offers rebates to its customers in a transparent and consistent manner - something that cannot be said of any of its neighboring utilities.
As of this writing, PWP is offering a rebate of $0.45/Watt for both residential and commercial customers, and a rebate of $0.90/Watt to non-profit customers (who cannot take advantage of the federal tax credit). Alternatively, PWP also offers a performance-based incentive that is paid out over two years based on the actual production of the system. Residential and commercial customers are paid 14.4¢/kWh, whereas non-profit customers are paid 28.8¢/kWh.
LADWP offers a rebate, if you have the stamina to receive it. Vexed with the most bureaucratic process to be found this side of Orwell’s 1984 dystopia, applying for and receiving a rebate from DWP often feels like a reward for a life well spent.
That said, LADWP is currently offering rebates of $0.30/Watt to residential customers, $0.40/Watt to commercial, and $1.15/Watt to non-profits. Just don’t hold your breath.
These two municipal utilities often feel like one and the same given their similar approach to rebates - which is to say, now you see ‘em, no you don’t.
Unlike their neighbor to the east, neither BWP nor GWP is able to maintain a rebate program throughout the year. Instead, both open their rebate windows on or about July 1st (i.e., the start of their fiscal year) and then hand out money until it is gone, at which time the window slams shut until the following July 1.
Burbank’s program operates under a lottery, which last year opened on July 1 and was exhausted by August 15. In addition, BWP imposes restrictions on the azimuth and pitch of rebated systems, despite their being no technical justification for doing so.
Glendale’s program is even less transparent, and the installation/rebate process is outlined in a 23-step ode to inefficiency.
We will revisit both of these program in mid-June to provide what guidance we can to the residents of these two cities.
The “Solar Partnership Program” in Azusa is fully subscribed. There is a wait list that solar-hopeful customers can get on in the hope that at some point there will be rebate funds available - with no guarantees that there ever will be.
The Anaheim Solar Incentive Program was fully subscribed as of October 1, 2015 and is now closed, with no published plans to revise the program in the future.
SCE’s rebates, which were part of the larger, California Solar Initiative, have expired and no new funds are anticipated. Of course, SCE customers still have the highest electricity rates around, which provides its own—albeit perverse—incentive to Go Solar!
Solar rebates are rapidly becoming an endangered species, but there are still a handful of refuges out there for the lucky few who reside in those areas. Here is our update on who is offering what as of January, 2015.
Although there are lots of ways to approach this, we figured that the most entertaining would be to rank-order each utility in the Run on Sun service area from best to worst in terms of their rebate program (and we will toss in a handy summary chart at the end).
Beyond a doubt, the best run solar rebate program in our service area is provided by our hometown utility, Pasadena Water & Power. The folks at PWP have figured out how to provide generous rebates on a predictable schedule while keeping bureaucratic annoyances to a minimum. Boy could its neighbors learn a thing or two from PWP!
Here are their numbers as of today:
Residential: $0.85/Watt EPBB; 12.9¢/kWh PBI.
Commercial: $0.85/Watt EPBB; 12.9¢/kWh PBI.
Non-Profit: $1.60/Watt EPBB; 24.2¢/kWh PBI.
Keep in mind, those numbers have been in place for a long time (since 2012!) and we expect them to drop some time this year.
Anaheim is offering some big rebate numbers, but they offer a ridiculously small window of opportunity for snagging them. Specifically, the window is about to open and you need to submit a rebate application between today, January 15, 2015 and two weeks from today as the window closes on January 29! After that you are out-of-luck until the next window is set. For those who can jump on the opportunity, here are the numbers:
Residential: $1.25/Watt EPBB; n/a PBI.
Commercial: $1.10/Watt EPBB; 11.0¢/kWh PBI.
Which brings us to the problem children…
Azusa has a rebate program, maybe. But what it really has as of now is a waiting list. Good luck with that.
Burbank and Glendale feel like the same city so its not surprising that their local utilities seem to act in lock step. Both utilities arguably offer rebates, but unlike PWP - their more intelligent neighbor to the East - neither BWP nor GWP can figure out how to keep a rebate program open for more than a few weeks (days?) at a time. They say they are victims of their own success, but we see it as a sign of bad planning. (Oh, and don’t get us started about GWP’s alleged Feed-in Tariff program which after a year and a half is yet to have a single application submitted! Genius!)
As for now, all the unfortunate residents of these two communities can do is wait until the new fiscal year in July and hope that some funds will be allocated.
In SCE territory the party is officially over - there are no more rebate funds available, and despite the Governor’s call for 50% of electricity to come from renewables by 2030, there are no moves a foot to refund the CSI program. This is unfortunate beyond the lack of funding - with the demise of the CSI rebates, so goes the CSI data since that was only gathered as part of the rebate process. As a result, we lose a major solar incentive along with a major source of market data for the largest solar market in the country! More genius! (Here’s a thought - since SCE still requires us to go through the interconnection agreement process - via email - why not collect the data that way?)
LADWP offers a rebate, but they have the most excruciating process ever for getting it. (Think of that wealthy Uncle who could easily help you out, but is going to make you bow and scrape before he cuts loose with some ducats, and you get the picture.) Moreover, non-residential rebates are going away in favor of the Feed-in Tariff program, but for small commercial or non-profit customers, that option simply doesn’t pencil out.
For those residential customers with the patience to outlast the bureaucrats, here’s their rebate:
Residential: $0.40/Watt EPBB; n/a PBI.
Frankly, that’s just not worth the trouble.
So here’s the overall results for all of these utilities:
While rebates are going away, the 30% federal tax credit is still in place, and will continue through the end of 2016. Carpe diem!
Solar rebates are fleeting in many locations—now you see them, now you don’t. Case in point, Burbank Water and Power (as is the case with its cousin in Glendale) is notorious for offering, and then taking away solar rebates. We monitor BWP’s website for new developments, and we have now learned that they will be holding a lottery for possible rebate funds next July. No additional details were made available; presumably they will be posted sometime in June.
Given that development, we decided to update our overall rebate status. Here is how things stand generally in the Run on Sun service area as of this date:
|Utility||EPBB ($/Watt)||PBI (¢/kWh)|
|(Click to see website)||Residential||Commercial||Non-Profit||Residential||Commercial||Non-Profit|
|Anaheim||Unavailable until June, 2014||Unavailable until June, 2014|
|Azusa||Wait List||Wait List|
|Burbank (BWP)||Lottery in July, 2014||Lottery in July, 2014 (30 kW or less)|
|Glendale (GWP)||Unavailable until 7/1/2014||Unavailable until 7/1/2014|
|Los Angeles (LADWP)||$0.40||$0.70||$1.45||Not used|
|SoCal Edison (SCE)||$0.20||$0.25||$0.90||2.5¢||3.2¢||11.4¢|
Here are a couple of very important qualifications to what appears in that table:
This is a moving target; watch this space.
As expected, the Glendale City Council yesterday voted to approve a Feed-in Tariff program patterned after programs that have failed. Here’s our final report, for now.
One clear tell that the FiT proposed by GWP was a non-issue: no other solar company bothered to comment on it before the City Council. As for the City Council itself, another tell - two of the five Councilmembers were participating via Skype and phone - but they both bailed after voting on the City’s budget but before the FiT came up for a vote.
Which left only me.
For the second week in a row, I was the only speaker to address the FiT. I pointed out to the Council the failure of the programs in Anaheim and Riverside - the models for the GWP program - to yield a single solar installation in more than two years. I reminded them of what we were told by the woman in Anaheim - that there is a difference between designing a program to meet the letter of the law and designing a program that works. I acknowledged that they were going to pass the ordinance, because they had been told that they had no choice - they were stuck with buying a pig in a poke. I encouraged them to revisit the issue in three months. If GWP was correct, and their program was destined for greatness, we would certainly know by then - but if I was right, perhaps it would be proper to revisit this program and try to design one that would actually work.
That argument received some traction with the Council - and I have already set the reminder for three months from now to revisit this with the Council. (Ironically, if you are speaking about something that is not on the agenda, they give you 5 minutes to speak, but for actual business before the Council, they only give you two. So when I return in September I will actually be able to layout my case in some detail!)
Once again, Councilmember Ontero picked up on what I said and asked Staff whether they had, indeed, designed a program that could only meet the letter of the law but not actually accomplish anything. And again, GWP’s Chief Assistant General Manager, Steve Lins responded but did not actually answer the question. Instead he brought up LADWP’s Ratepayer Advocate as complaining that LADWP was overpaying (an old argument that was rejected twice - by the LADWP Board and by the LA City Council).
Beyond that, Mr. Lins insisted that my complaints were that “my project” didn’t pencil out and that was why I was complaining. Of course Mr. Lins knows nothing about my motivations so his speculation was unjustified. For the record (since Council rules did not afford me an opportunity to respond), Run on Sun did not have a client that we were representing here - we were simply advocating for sound public policy in support of solar.
So the program is now adopted and we will wait and see how this plays out.
Glendale Water and Power has started holding public workshops on its proposed rate increase - though still remaining mum about their mandated Feed-in Tariff program. Here’s an update.
As we reported before, GWP is poised to impose a rate increase over the next five years in excess of 24%. The first two of six scheduled public meetings to discuss the rate increase were held on Wednesday and Thursday and GWP posted their presentation materials from those meetings online. Here are some of the highlights from those materials:
Of course, in any systemwide rate increase like this, some customers will fare better than others. So who are the winners and losers? This chart is pretty definitive:
In each and every year of this five-year rate increase, residential customers are seeing higher rate increases than any other class of customer in Glendale! They aren’t looking at a 24% rate increase, their rate increase is 26.4% or 5.28%/year. In contrast, small commercial customers who do not exceed the threshold for demand charges (i.e., peak demand less than 30 kW) are seeing the smallest increases. (GWP’s spokesperson asserted that this result is mandated by Proposition 26.)
Unfortunately, there is nothing in the presentation about the reinstitution of GWP’s solar rebate program, and the GWP website simply advises customers to “check back again after July 2013." Of course, it would be more useful if GWP published its plans for that program - along with the FiT - and allowed the public time to comment and possibly improve the program.
At present, that doesn’t seem to be happening in Glendale.
So electric customers of GWP are going to see their rates increase substantially - albeit from a relatively low base at present - and the most effective tool that they could have to counter those increases, adding solar, remains in limbo.