Referring to Xcel Energy as a solar company is slightly off-target, since the company is actually a major U.S. gas and electric utility serving eight states from Minnesota to New Mexico. Everything else hits a direct bull’s eye, and a very sensitive one at that, with a persistent recession creating a solar glut on the international marketplace that has brought solar component prices down by about half, and caused an equal loss in the stock prices of the companies themselves.
Nor are incentive cuts big news anymore. In Los Angeles, in November of 2010, the Department of Water and Power, or LADWP, cut its incentives (also known as rebates, or subsidies) by a third. Before that, it was Arizona utility Salt River Project, which in October cut its incentive program, reportedly to preserve the life of the program itself.
The damage to the nation’s solar pocketbook can be calculated. The damage to consumer confidence in incentive programs is immeasurable. In spite of that, and perhaps riding the previous wave of aplomb, the U.S. actually became a net exporter of solar in 2010, with 158 megawatts of Western solar coming online since 2005.
Xcel Energy defends its reductions by pointing out the industry declines I mention above. Seems to me that’s bass-ackwards thinking: when things are going badly, pull out all the stops. Only when they are going well is it time to cut back – a bit of Keynesian economic logic that seems to have escaped the utility entirely.
Xcel is also recommending that state regulators approve further cutbacks in its incentive program, a move that has the Colorado branch of the Solar Energy Industries Association calling the reductions a killing blow (or words to that effect).
That may be a bit fanciful, but the cuts – from $2.35 to $2.01 per watt immediately, and as much as $1.25 per watt later – are deep. Blood is bound to flow. Fortunately, customers already approved for incentives will still get the higher rate.
Xcel Colorado President David Eves is recorded as saying that such cuts will position solar to become self-supporting. But isn’t it odd that coal, oil and gas (propped up to the tune of $3.6 billion this year) haven’t yet managed to become self-sustaining, even after a century of adoption? Or is that just Republican-think and I’m not smart enough to understand it?
Photo Credit: Mike Weston via Flickr CC