In an effort to comply with the voter-approved Amendment 37 initiative
last November in Colorado, which requires investor-owned utilities to use
or fund a small percentage of solar energy, Xcel Energy made an interim
filing with state regulators that would allow a new program to begin in on
Jan. 1, 2006.
A program start date of Jan. 1, 2006 would be particularly helpful for
Colorado residents interested in going solar since a separate federal tax
credit of 30 percent (up to $2000) comes into effect at the same date.
This was part of the Federal Energy Policy Act of 2005, otherwise known as
the energy bill, which passed last summer.
The filing with the Colorado Public Utilities Commission (CPUC) sets forth
the amount Xcel Energy would charge all customers per month to fund the
state's mandated Renewable Energy Standard (RES). It also establishes the
rebate amount as required by Amendment 37 that will be paid to those who
take part in the solar program.
The CPUC has until March 31, 2006, to establish rules and regulations for
the RES in Colorado, including solar power development.
"We need to begin the installation of solar resources as quickly as
possible if Xcel Energy is to meet the mandates approved by Colorado
voters," said Fred Stoffel, Xcel Energy vice president for policy
development.
Xcel Energy would charge customers an additional 1 percent of their
monthly electricity bill to support the renewable energy mandates, through
a proposed electricity "rider" known as the Renewable Energy Standard
Adjustment (RESA). The Colorado General Assembly approved a charge up to
this amount earlier this year.
Based on projected electricity bills as of Jan. 1, 2006, typical
residential customers would pay an estimated 59 cents a month and typical
small-business customers would pay an estimated $1.14 a month to support
renewable energy activity. Larger business and industrial customers also
would pay 1 percent of their total monthly bill. In total, Xcel Energy
would collect an estimated $22 million a year through RESA to support the
mandates.
A second component of the filing addresses in part the total solar payment
for customers who install photovoltaic systems. The total solar payment
would be $4.50 per watt.
In its filing, Xcel Energy first seeks to rebate customers $2 per watt
installed on customer premises, up to 10,000 watts (or 10 kW). Also as
part of the program, the company would purchase Renewable Energy Credits (RECs)
generated by the customer's system, for $2.50 per watt. These credits then
would be counted toward the company's RES requirements.
A common size for residential photovoltaic systems in Colorado is 2-3 kW,
and payments to customers at this size would be in the $9,000 to $13,500
range. This would cover approximately half of the installation cost, since
typical photovoltaic systems are priced at $8,000 to $10,000 per kW.
Under the initial program, customers may install up to a 10-kW system on
their premises, for a recovery of up to $45,000. For installations larger
than 10 kW, a future program is planned to provide for a competitive
solicitation, or bidding process.
California rebates for solar have ensured the continued growth and success
of the industry in that state. Currently, almost 80 percent of solar
market is located in the sunny state, but other state policies have
sparked new growth in other areas of the country. New Jersey, for example,
now offers solar rebates and these policies have made that state the
strongest market for solar in the east. These new rebates in Colorado
could do the same.
C. F. Pittenger
Simplicitysolar@bresnan.net
Grand Junction, Co