Night Falls on California Commercial Solar Incentives, Some Utilities Out

The commercial solar incentives in California have been so popular that the funds are dwindling, and for two utilities, have run out. Solar is one of the few sectors of the American industry that has picked up speed in this desolate economy but good things have to come to an end sometime.

Two of the three large private California utilities participating in the California Solar Initiative have reported reaching their budgeted incentive caps for non-residential solar installations. In a story in the Solar Home Business Journal, Pacific Gas and Electric Co. and the California Center for Sustainable Energy are putting new non-residential solar applicants on waiting lists. Those on waiting lists are not guaranteed to receive a solar incentive, but may receive one if existing reservations are canceled or more funding is obtained. Cancellations are relatively common, and have accounted for about one-fourth of listed solar reservations in the past.

The California Center for Sustainable Energy, which administers solar incentives for San Diego Gas and Electric Co., has had a waiting list since October. There now are 47 applicants on the waiting list, with planned projects totaling 3.7 megawatts, worth about $3.3 million in potential solar incentives, according to a newsletter distributed by the initiative.

Pacific Gas and Electric, a larger utility, began its incentive waiting list for commercial solar projects submitted after Dec. 23. It already had 42 applicants on a waiting list at the time the initiative’s newsletter was released, totaling 3.6 megawatts of capacity and $2.6 million in potential solar incentives.

Both utility programs have been on Step 8 of the initiative’s solar incentive program for both residential solar and non-residential solar customers. For those choosing the Expected Performance Based Buy down, Step 8 has paid 35 cents a watt for both residential and non-residential commercial customers. For non-residential government or nonprofit applicants, Step 8 has been paying $1.10 per watt, because these applicants are not eligible for a federal tax credit.

For applicants seeking to reserve a Performance-Based Incentive, Step 8 has paid a nickel per kilowatt-hour for residential solar customers as well as for non-residential commercial customers, and 15 cents per kilowatt-hour for government or nonprofit groups installing solar.

Because of the budget depletion, it’s not certain that new non-residential custom applicants to these programs will receive solar incentives. Residential solar incentives are not yet affected and are still being accepted by both utilities. Southern California Edison still is offering incentives for non-residential solar applicants, which also are about to move to Step 8 because Step 7 appears oversubscribed. Residential applicants in the Southern California Edison service area may still be eligible for Step 5 incentives, which pay $1.55 per watt with the buy down or 22 cents per kilowatt-hour for system performance (32 cents per kwh for government or nonprofit customers).

If consumers are able to secure a competitive price for a grid-tied solar electric system in the Southern California Edison service area, the higher incentive may yield a better bargain than is now available to customers of the other two utilities.
To help determine the status of existing reservations, Pacific Gas and Electric is asking applicants in its territory who do not plan to proceed with their projects to notify the utility at solar (at)