October 1, 2009
Austin Energy Updates Solar Rebate Program

Austin Energy is revamping its highly successful solar rebate program to produce additional energy management benefits and to better leverage available dollars. Changes will help keep solar rebate levels in synch with declining costs of solar photovoltaic technology and enhanced federal tax credits. The goal of Austin Energy is to maintain a rebate that is attractive, but at a level that allows as many customers as possible to participate in the program.

The utility, which has consistently provided one of the largest solar rebates in the nation to help customers pay for solar roof top installations, has reduced its solar rebate from $3.75 to $2.50 per watt effective September 24, 2009. Total rebate dollars will be limited to $15,000 per home installation and $50,000 per site-- as some residential customers build out a home solar system in stages. In addition, installation of key energy efficiency improvements to a home will be a qualifying requirement for future solar rebates. Austin Energy provides rebates or zero percent interest loans on all key home efficiency improvements.

The utility also plans to change how it will assist solar installations by businesses, the apartment community and non-profit customers. The goal is to develop an incentive based on the output of solar installations rather than a rebate based on the size of an installation. New guidelines for businesses will be developed with the goal of implementation by this January.

The combination of an attractive utility rebate, an enhanced federal tax credit and a 50% reduction in the cost of solar panels in recent time has led to a flood of solar rebate applications.

Last year Austin Energy received about 150 solar rebate applications. This year the utility has received more than 400 – a number that exceeds available budget. As a result, rebates are available for all projects that have received an Austin Energy Letter of Intent (LOI), which earmarks funding for approved projects. Other applications must be refiled along with new residential applications. New or refiled residential applications will be accepted beginning November 1, 2009.

Austin Energy has provided more than $18 million in solar rebates since 2004. This has resulted in the installation of more than 900 rooftop solar installations in Austin totaling more than three megawatts of solar capacity. The program has also led to an increase in the number of solar installers in Austin from four to 24.

Austin Energy originally envisioned a solar rebate program of about 10 years in length to help spur solar development. The strategy envisioned by Austin Energy as well as utilities across the country with similar programs is that solar rebates would be reduced and eventually phased out, as the cost of solar becomes competitive with other types of generation costs.