Jun. 17--For a program meant to bring solar power to a million rooftops in the state, the new California Solar Initiative isn't bringing a lot of sunshine to Tommie Nellon's life.

In fact, he's worried it could cast a cloud over the state's solar industry. Unlimited Energy, Nellon's Fresno-based solar company, "should be booked up through this year" with solar installation jobs, he said. "But now I'm not -- and it's all because of this new rebate program." The state's new solar incentive program that went into effect Jan. 1 has complicated the way solar installers calculate and receive the state rebates, Nellon said, and that has made it harder to give accurate quotes. "It's kind of hard to sell a system if you don't know what the rebate is going to be," he said. What's worse, Pacific Gas & Electric Co., Southern California Edison and the other utilities now responsible for paying solar rebates have been slow in sending out checks, he said.

Of the approximately 2,400 rebates applied for so far this year across C lifornia, only a handful have been paid out, according to state estimates. Officials were unable to give specific numbers for the central San Joaquin Valley. Customers don't have to worry about that, since solar installers discount the prices they charge homeowners to reflect the rebate they're waiting to receive, Nellon said. At worst, customers may have to wait longer to have their new solar panels hooked nto the electricity grid. But, given that those rebates make up one-quarter to one-third of the cost of installing a solar system, continued lack of payment could start causing cash-flow problems for some solar installers as the year rolls on, Nellon said.

"Unless sales pick up, I may have to lay off some people," Nellon said of his 28-employee company. "It's a major problem for me." Nellon's concerns are being echoed throughout the state's solar industry. While many solar installers support the new program's goals of making solar systems more efficient and effective, they also agree that it has stalled residential sales across the state. "The program is only a few months old, and I want to give it that grace period to get it right," said Sue Kateley, executive director of the California Solar Energy Industries Association, a trade group representing about 200 solar-related companies.

Kateley praised the California Solar Initiative's new rules, which require solar installers to verify that their systems are delivering the power they're supposed to deliver. "We're going to know these systems perform," she said, and that will be good for the reputation of the industry. "On the other hand, it probably would have been better if we had had more time to kick tires on how we developed these forms and calculators" used to gauge the rebates due each project, she said. "They are complicated, in a 'you couldn't have done it wo se if you tried' kind of way." The problem, Nellon explained, is that the value of rebates under the new rules can change from house to house, depending on the slope of the roof, the shade from nearby trees, and even the ZIP code of the home.

Depending on the combination of these factors, the rebates available to solar installers can change from a high of $2.50 a watt for a residential project to about $2.40 a watt, he said. That 10-cent difference "is a big deal when you're looking at installing thousands of watts on a house," he said. Harlan Ode, president of Sharpe Solar Energy Systems Inc. in Bakersfield, said the confusion "made all the salespeople in the solar industry back way off, until they could figure out how this works. "In theory it was a good idea, but it just didn't play out that way at all. If the intent was to get [customers] to want to install solar, it's done the opposite of that." Ode said that if the state can refine its program, it would help in the long run, "but certainly for this year, overall installations are going to be down considerably." Ode estimated his company's sales so far this year are half what they were in the same period last year.

Other solar installers have cited even steeper declines. Right now it's hard to calculate just what effect the new program has had, said Polly Shaw, team leader for the California Solar Initiative program at the California Public Utility Commission, which took over the state solar program Jan. 1. That's because the state's former solar program was run by a different agency, the California Energy Commission, and the two agencies haven't finished merging their data on solar applications and installations, she said. Still, Shaw agreed that this year has seen a slowdown in customer demand for residential solar installations, even while demand for commercial and other nonresidential solar projects has continued to climb.

"We're finding that many of the large installers in the residential market have been quick to understand the changes" under the new rules, Shaw said. "But some of the smaller installers may not have been as aware of the transition. It is true that many f these requirements have caught them off guard." And that, she said, probably is playing a part in the utilities' sluggish processing. She said only 18 confirmed payments have been made so far. Of course, "there are any number of reasons," Shaw said. First, the extra work involved with the new program has slowed the process for solar installers and the state and utility officials, she said.

Second, many solar installers rushed to apply for rebates late last year under the state's old program, she said. The California Energy Commission received about 6,000 such applications in December alone and "they're still processing many of those," Shaw said. In fact, during the first three months of 2007, about 9,800 solar installations were completed in California, a 50% increase from the same period in 2006, according to data collected by Environment California, a Sacramento-based nonprofit advocacy group

That indicates that solar installers still are working on projects they booked last year, said Bernadette Del Chiaro, clean energy advocate for the group. "If you look at the overall market for California, we're still growing," she said. Still, many solar installers are concerned. "There's mass grumbling in the solar industry right now," said Dale Julin, the owner of Santa Cruz-based solar installation company Stardate Solar. "There's a sense that the powers that be are slowing it down." In a May meeting with state and utility officials, many solar installers were shocked to hear that PG&E hadn't sent out a single rebate check applied for so far in 2007, Julin said.

The utilities involved in the program have made progress since then, Del Chiaro said, but they still "need to work out the kinks and get the rebates flowing to the installers. PG&E and the other utilities fought to get to administer this program. Now th y've got a lot to prove." Sara Birmingham, PG&E's California Solar Initiative manager, said PG&E has received about 1,600 rebate applications. Out of those, only about 100 have been completed to the point that PG&E may legally approve the rebate payment, she said -- and out of t at number, PG&E has made rebate payments to 18 projects worth a total of $175,000, she said.

That is a fraction of the $950 million PG&E expects to pay out over the next 10 years of the program, but it's a good start, she said. Kateley, of the California Solar Energy Industries Association, said rebates were not always quick to arrive in solar installers' mailboxes under former solar programs, either. "I'm sure the first rebate checks out of the chute will be the slowest," she said. "But I'm sure they'll get it straightened out." In at least one case, the state already has fixed a glitch in the initiative, said Gregg Fisher, the central San Joaquin Valley sales manager for San Luis Obispo-based REC Solar Inc.

Earlier this month, the state passed a law that allowed homeowners to opt out of electricity-pricing plans contained in the state's new solar initiative, which actually made solar power less affordable for some homeowners, he said. The problem, mainly affecting customers in Southern California, had been blamed as a factor in slowing solar sales this year, he said. "Now that that's lifted, I think the [California Solar Initiative] program is going to hold contractors more accountable," Fisher said. "Even though it's created more work for us, even though the sales timeline is much longer, I think it's ultimately go ng to be good for the industry." The reporter can be reached at jeffstjohn@fresnobee.com or (559) 441-6637.