If you’re an Xcel customer and thinking about Solar Energy, now is the time to act…before the incentives decline more substantially! Yesterday morning Xcel Energy re-opened the door for solar energy in Colorado. After more than a month of negotiations since the original program was shut down without notice, the Colorado Public Utilities Commission (PUC) ruled to accept a negotiated settlement last Friday afternoon, and yesterday morning the new program was officially kicked off. The incentives under the new program aren’t as aggressive as they were before, but the return on investment (ROI) calculations are similar, with break-even points for most residential Arise Energy clients at about 10-11 years. (Commercial clients see a much quicker ROI due to unique aspects of how commercial systems can be written off, and other incentives for which they may be able to qualify.)
The new Xcel program includes two incentive components: (a) an up-front cash rebate of $1.75/watt, and (b) a performance based incentive (PBI) of $0.04/kWh of production for the first ten years of system operation. The PBI is expected to show up as a credit on Xcel customer monthly bills. This change in residential incentive (and the incentives now available) are the first step toward reaching a point where the revised program will ultimately deliver all incentives over time — e.g. all will be performance based, with none being paid up-front.
This first “step” in the program will be funded by Xcel for a total of 3 megawatts (3MW), after which the program will “step” down to the next tranche of incentives, which will include a smaller ($1.00/Watt) up-front rebate and a larger PBI. With each following step in the program, the combination of rebate and PBI components will be changed, with an increasingly larger portion being paid out as performance based incentives and a smaller amount paid via up-front rebate. With each new “step” the total incentive payout is also expected to decline by about 10%. This is a steeper decline slope than we were on with the old program.
Xcel clients seeking to invest in renewable energy to lock in their energy rates for the next 30-40 years and reduce their carbon footprints will find that the sooner they act the better the cash flow looks. Further, once this initial step in the new program is complete and Xcel steps to the next tranche of incentive funding, the rebate component will drop by 43 percent!
Please feel free to call us if you have any questions about the new program, and to explore how we might be able to assist you in designing a renewable energy solution for your property.