12 Jan 2011

greenHILLhome: Funding for Solar in DC Gets Cloudy

uploaded to flickr.com by onlinewoman

Several months ago I wrote about the basics of solar energy on the Hill, the options for funding and the benefits of the Capitol Hill Energy Co-op.  In 2010, more than 40 Co-op members completed installations on their Hill homes and another 20 signed contracts for installations in 2011.  Fifteen other co-ops were formed in neighborhoods throughout DC, and together then formed DC Solar United Neighborhoods or DC SUN.  DC SUN has united to promote solar energy education and to lobby the Office of the Mayor for increased funding and support to photovoltaic projects.  With the city budget needing some serious trimming, though, total funding for the DC Rebate program is in jeopardy.  That doesn’t mean residential projects won’t get funded, but it may mean smaller rebates in the coming months.

Mike Barrette, Solar Project Director for the Capitol Hill Energy Cooperative, gave me an update on the DC Department of the Environment (DDOE) funding status and how it relates to the overall city budget.  The original Renewable Energy Incentive Program (REIP) set aside $8 million over four years (2009-2012) to provide rebates to DC residents.  A homeowner who wants to receive a rebate for a solar energy project goes through the application project and then, due to a yearly rebate cap of $2 million, either receives a rebate as a percentage of the project construction cost or sits in a queue and waits for funding to come available in a following year.  In the current fiscal year 168 projects receive rebate grants, while another 300 are on the waiting list for funds.

Fiscal year 2011 wasn’t so kind to DC, and now the City Council is trying to trim spending and balance the city’s budget.  As of January 5, DDOE reports $618,695 left in the REIP for the fiscal year that has not be awarded to residential solar projects.  The Council has voted to eliminate this funding in its efforts to balance the budget.  The money for the program, however, comes from a “trust fund” set up with electricity ratepayer surcharges.  If the money was collected for the intent of funding the solar energy program, how can the Council “take” the yet-to-be-granted money?  And does that mean that the $2 million slated for fiscal year 2012 is also available for “trimming?”

While the prices of solar panels have dropped considerably in the past few years, the overall cost of a residential photovoltaic system still can run between $20,000 and $35,000.  Losing the DC rebate and with the potential for reductions in federal rebates and incentives, payback for solar energy systems may slow from up to four years to up to eight years.  DDOE has agreed to administer the REIP through 2012, but if the funding is cut moving forward each project awarded a grant may receive less money in the coming year than in years past.

If you are interested in installing a solar energy system on your home, you should seriously consider starting the application process for the REIP grant and getting placed on the waiting list.  The REIP was always run as a first-come, first-served program with a constant waiting list, but with less funding available it would be best to get on that list soon.  Should the funds be depleted before your position on the wait list, you can always remove yourself from the list and proceed with the installation if the economics of the project still work for your household.

For more information, join the DC SUN list serve via the Capitol Hill Energy Co-op website.  You can also contact your City Council representative to ask whether he or she supports the REIP.

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6 responses to “greenHILLhome: Funding for Solar in DC Gets Cloudy”

  1. crockpot says:

    Quite honestly, DC shouldn’t spend anymore funds on this program. I wanted to explore the issue so I received multiple quotes. Essentially, a 4kw system is about $28,000 installed. Between DC’s subsidy (~approx 12k) the fed tax credit and the Pepco power subsidy that $28k system would have ended up costing me about $2k. The amount of power generated would have saved me about $1k per year in power costs. So my ROI was approx 2 years. The system itself if it had zero problems would pay for itself in… 25 years. Given all the installs on the Hill are using pressure treated lumber to span the roof, which will not last 25 years, there will be major maintenance issues as well.

    Its a boondoggle, and I couldn’t see wasting taxpayers money so I could get a 28k system for 2k.

  2. Hey dummy says:

    There is no Pepco subsidy.

  3. no dummy says:

    Pepco does an upfront SREC purchase of clean energy so while not technically a subsidy they forward fund the purchase to a tune of over $5k… so yes, about 20% of the cost of the project is paid upfront by Pepco, the bulk of the remainder split between DC and Fed Tax credits/grants.

  4. whoa_now says:

    Not Pepco- Pepco (as do many other power utility across the country) has to buy a percentage of their energy from renewable sources. Pepco does this by buying renewable energy credits (AKA SRECS). An aggregator will buy your SRECs and then bundle them and sell them to the highest bidder- Be it Pepco or some other major utility. I guess Pepco can buy directly from one resident (it wouldn’t make sense), but it is NOT a subsidy. They are required by law to buy a certain percentage of power from renewable sources.

    As for wasting tax payers money-every producer of energy-coal, gas, nuke, solar, wind, etc receives some subsidy from the government. I’d rather have my tax dollars go to peeps putting up solar panels, than peeps digging for “clean” coal. I currently am one the list.

    This money (2 million per year) was a surcharge (on pepco powerbill)to everyone in the district for the REIP program under the promise to use it for renewable energy-not for anything else. Frankly I think a law suit may be in the works.

  5. Kevin says:

    @crockpot, I think your analysis is way off, from what I’ve heard from people who’ve had the install done, the systems pay for themselves in 10 years or less. The fact is, this money was earmarked for this purpose and shouldn’t be touched by DC gov’t. It creates jobs and if done right has very little maintenance. The pressure treated lumber if installed right will last a very long time since the water drains right off of it.

  6. crockpot says:

    Kevin, I have the quote and the projected energy savings. It is well over 20 years to ROI for the complete system and that is assuming there is zero maintenance. The pressure treated lumber… I have a roof deck and the pressure treated lumber was a wreck after two years due to the extreme environment of being on a roof. It was sound from a structural standpoint, but in no way would I expect 25+ years out of treated lumber as the foundation of what amounts to an industrial application.

    To each their own, but solar has still not reached the point of economic viability at the residential level. It’s akin to taking out a 30 year loan on a boat… someone is going to take a bath at the end. In this case, the taxpayer.

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