Los Angeles solar power rebates slashed 32%

This post has been corrected. See the note at the bottom for details.

Rebates for Los Angeles solar panel installations are 32% lower under the newly relaunched Solar Initiative Program, which will start accepting applications next month. The program was put on hold in April as the demand for incentives hovered around $112 million, far outpacing the program's $30-million budget. During the hiatus, the Department of Water and Power was able to catch up with a backlog of applications and identify alternative financing options.

A mixture of bond financing and lower incentives will allow the DWP to double the budget to $60 million. The department's general manager, Ronald O. Nichols, said the lower rebates, which previously covered as much as 45% of the costs for residential buildings are "more in line with market pricing and allow greater participation."

If the program is approved by the DWP board and the City Council, rates for potential costs for large-scale (1,500 kWh/month) users could increase to $4.59 by 2016. The program hinges on what’s called a feed-in tariff, which allows business owners and eventually homeowners to connect to the electricity grid and sell their unused electricity back to the utility at a fixed rate for 20 years, about $0.19 per watt.

"We also want to grow solar at a steady and sustainable pace while being prudent about the cost to all customers who pay for this program through their rates," Nichols said in a news release.

Of nearly 8 million single-family homes statewide, 60,000 have solar panels. Fewer than 2,000 homes in L.A. are solar-powered.

When the rebate program first started in 2007, incentives were $3.25 per watt, or $13,000 for a four-kilowatt system. Under the September relaunch, the rebate will be $2 to $2.20 per watt, depending on how efficient a system is -– a reimbursement of $8,000 to $8,800.

Rebates for commercial buildings went down by 8%, and rebates for government and nonprofit facilities went down by 32%. Although home and business owners will see smaller rebates paid over 11 to 15 years, they have larger federal tax incentives to offset the lower returns, now ranging from $7,000 to $8,000, up from $2,000.

"Our rebates for residential, commercial, government and nonprofit customers will still beat the state incentive levels when you consider that DWP will continue offering a higher incentive to customers who elect to sell their Renewable Energy Credit to LADWP" –- an additional $0.40 per watt, said Lorraine Paskett, DWP senior assistant general manager.