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Success is Bittersweet for State Solar Incentives

Connecticut Solar

Residential solar power is growing fast, too fast for many state incentive programs. A recent New York Times article profiled Connecticut’s once lucrative and now bankrupt solar rebate program. Connecticut has been lauded for having one of the premier solar incentive programs in the nation. That, as it turns out, could be the program’s downfall; and they are not alone.

Connecticut’s solar rebate program has been immensely successful in getting solar installed. Since the start of 2005, over $20 million was handed out for 815 residential solar installations. For the current round of funding, which runs from mid-2008 through mid-2010, $8.5 million was allocated. But residents are ahead of the curve and a 300 percent growth in applications has left that money spent before 2008 could even end.

Other states are running into the same problem. State website after website has large disclaimers explaining that funding is spent and to please sign up on the waiting list. Oftentimes funds are committed before the next term is supposed to start.

Florida, for example, with a very generous set of incentive programs, ran out of funds for 2008-2009 by Independence Day of ‘08.

New Jersey also has had funding problems. Their Clean Energy Rebate Program had a three-year budget of $273 million (including residential and commercial systems) and could not keep up. The state began refusing applications and has since switched their focus to renewable energy credits (RECs).

The list goes on and continues to get longer. It is obvious that funding approaching the billions of dollars will be needed to satisfy consumer lust for clean, free energy. Most states cannot handle allocations of that size, especially within the confines of the current economic depression. Many are looking to actually pare down their success by lowering incentive rates to spread money around a bit more. Others are hoping for some federal intervention when the Obama administration steps into the Oval Office.

Renewed federal incentives will help in 2009 and beyond. The removal of the $2,000 cap on residential systems should allow states to lessen their rebates without discouraging installations too much. All states will probably do whatever possible to revamp, revise, and retain some sort of solar incentives as many are relying on the influx of green-collar jobs that a healthy clean energy industry brings in.

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Posted on January 21st in Solar Politics by Dan.

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2 Responses to “Success is Bittersweet for State Solar Incentives”

  1. Dan Chance Says:
    January 22nd, 2009 at 4:23 pm

    I saw this coming when I first read about the incentives but it is still discouraging to see it happening just as this industry is trying to get on its feet. Is there no way to make these systems economically viable without large rebates?

  2. Dan Says:
    January 23rd, 2009 at 11:18 am

    I think the best way to make solar affordable is through research and development of more efficient, more easily produced panels and equipment. I also think we are on the threshold of that right now with nano solar cells, organic solar cells and other third generation innovations.

    In the meantime, the renewed federal tax credits and a green-friendly Obama administration will hopefully pick up the slack for those struggling states. The next few years will likely tell all…

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