When Phil Koziel was placing the order for his solar system, he had an advantage that some others don’t.
As a bank manager, Phil is a detail-oriented numbers guy. Those qualities came in handy as he navigated the complex and ever-changing details of lining up the state and federal rebates that paid for 38 percent of his system.
The federal rebate is straightforward and comes in the form of a 30 percent income tax credit. The state rebate is complicated and comes in the form of a declining-scale payment program, which is funded by ratepayers of the state’s investor-owned utilities, such as PG&E.
The more rooftop solar panels that are installed in the state over time, the smaller the rebate becomes. Installations have been brisk in PG&E’s service area, so the rebates are already at the third-lowest level of 10 for PG&E customers, even though the 10-year program is only in its fourth year.
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
When the state rebate system called the California Solar Initiative started in 2007, the residential rebate was $2.50 per watt. Now, the rebate in PG&E’s service area is 35 cents per watt, a rate so low it borders on irrelevant.
“The state rebates used to be the icing on the cake,” said John Ewan, owner of Pacific Energy Co. “Now, they are the ‘Happy Birthday’ on the cake.”
The Koziels had to sign the contracts to install their panels on a Sunday because the state rebate tier was set to go down to a new, lower level the next day.
But the federal rebates coupled with the fact that the price of solar panels has gone down in recent years still makes going solar a good investment, Ewan said.
The tiered state rebates are actually working the way they were intended to, said Ben Higgins, director of governmental affairs with REC Solar. That is to be a launching pad for the solar industry, which should require them less and less as the industry gets established.
“That’s precisely what’s happened to the solar industry — the costs of going solar have fallen rapidly in recent years even as the incentive levels have likewise declined,” Higgins said.