Utility companies throughout Colorado offer customers incentives to encourage the installation of photovoltaic solar electric generating systems.
Typically, such systems consist of linked arrays of solar cells which produce electricity from sunlight. When the array is linked to the regional electrical grid, the customer becomes a producer of electricity, as well as a consumer, receiving credit for surplus power produced during daylight hours.
A 4.18 kilowatt installation, consisting of 22 190-watt solar electric modules, has a gross installed cost of $30,650, according to Springs-based Rocky Mountain Solar. Such an array, if sited with little or no shading, orientation nearly true south, and tilt close to ideal, will produce enough electricity to supply the needs of a typical Colorado residence.
But the amount of credit awarded to consumers varies greatly among utility providers.
The two largest investor-owned utilities in Colorado, Aquila and Xcel Energy, which together provide electrical service to hundreds of thousands of customers, offer what appear to be exceptionally generous solar rebates.
Aquila and Xcel offer rebates of $4.50 per watt, which, combined with federal tax credits, lower the net cost of a PV solar system to $9,840.
But Colorado Springs Utilities’ rebates are substantially less. CSU pays customers $3.75 per watt, and bases its wattage calculations on AC output, rather than DC, as do Aquila and Xcel. This increases the net cost of a 4.18 kilowatt system to $15,281, a difference of $5,441.
Why the disparity? According to Debora Mathus, who heads the CSU solar rebate program, it comes down to different regulatory environments.
She said that Aquila and Xcel, which are private companies, are both subject to state legislative mandates, requiring them to produce 20 percent of their electricity from renewable sources by 2020. This has led to substantial investments in wind, solar and biomass projects by both energy giants. Turning customers into small-scale clean energy producers makes sense for them, Mathus said, even though the power produced is expensive and intermittent.
As a municipal utility, CSU need only generate 10 percent of its energy from renewables. That goal has largely been met, thanks to substantial hydroelectric capacity and to wind energy purchases.
Mathus characterized CSU’s rebate program, budgeted at only $300,000 annually, as essentially a pilot program.
“We want to support and encourage the technology, and we think our rebate level is appropriate,” she said. “We plan to reduce it incrementally, as the cost of these systems drop, and the technology matures.”
Mathus also said that large-scale adoption of PV solar systems would necessitate substantial investments by CSU, for which ratepayers would have to pay.
“If a whole neighborhood installed net-metered PV systems, we might have to upgrade our local distribution systems to accommodate them,” she said.
But while CSU is scarcely a player in solar, photovoltaics are booming elsewhere in Colorado, thanks largely to state mandates.
Earlier this month, Maryland developer SunEdison threw the switch on its newly-constructed Alamosa Photovoltaic Solar Plant in the San Luis Valley. The plant is operating at about 44 percent of its eventual capacity of 8.2 megawatts, which it expects to reach by year’s end.
It would then be the largest photovoltaic generator in the country, producing enough electricity to supply 1,500 homes.
All the facility’s power will be purchased by Xcel Energy as part of a multi-year contract.
Xcel spokesman Tom Henley said that the company is committed to home and business based solar generation.
“Between March of 2006 and July of this year, we had 1,800 applications, and so far we’ve paid out $15.8 million to 1,100 Colorado customers to install solar,” he said. “We’ve added 4.6 megawatts of new solar capacity, and we’ll fund as much as we can garner and get on the system. We’ve got to get renewables to 20 percent, so we’ve got a long way to go. Our 2011 goal is 25 megawatts, and that’s just a start.”
To put the different approaches in perspective, if CSU’s program were funded at the same level until 2011, and fully subscribed, it would add 400 kilowatts of PV solar electric generation capacity. That’s 1.6 percent of Xcel’s goal of 25 megawatts.
But, Henley warns, the systems aren’t for everyone.
“They can still take as much as 20 years to pay back, so they’re not big moneymakers,” he said. “But it’s a way of generating clean energy, and doing something beneficial.”