Dec 26, 2008 8:22 pm US/Eastern
Homeowners Tapping Into State Solar Panel Fund
Steve LeBlanc, Associated Press Writer
BOSTON (AP) ―
Homeowners and businesses are tapping a state fund designed to encourage them to install solar panels at a far quicker pace than officials first anticipated.
In less than a year, the
Commonwealth Solar program granted nearly $15 million in rebates out of an initial $17 million block of funding that was supposed to last until next April.
Energy Resources Commissioner Phil Giudice said a second $17 million block of funding has already been approved. He also said the state is cutting the size of the rebates in half to make sure they can be offered to more homeowners as demand for alternative, and cheaper, forms of energy grows.
"It's moving at a good clip and we're excited," Giudice said. "The money we have for this project is precious."
Under the program launched last January, homeowners and businesses can apply for a partial rebate to help defray the cost of installing the panels.
Initially the program offered a $2 per watt rebate. For an average 3 kilowatt system that might cost about $21,000 to install, the rebate translated into a savings of about $6,000.
To help ensure more homeowners have access to the fund, the state is lowering the rebate to $1 per watt -- or about $3,000 for the same 3 kilowatt system. The lower rebates take effect Jan. 1.
At the same time, however, the federal government has expanded and increased its existing solar energy tax credits.
Under the system, homeowners who install solar panels are eligible for tax credits for up to 30 percent of the installation costs.
There had been a cap of $2,000 on the tax credit, but that has been lifted, more than offsetting the reduction in the state rebate, according to Giudice.
So far, about 325 Massachusetts homeowners have received a rebate under the Commonwealth Solar program and others are still under consideration.
Girish Rao is one of those homeowners. The 40-year-old Andover resident said he was always interested in solar power for his house, but could not afford the 2.8 kilowatt system out of his own pocket.
After combining a rebate from the state, a federal tax credit and a separate state tax credit, Rao said he was able to knock the cost of the $21,000 system almost in half.
"That made it completely affordable," Rao said.
He said the panels generate enough power during the summer months that he pays nothing and even sells some of the electricity back to the grid -- enough so that during the cold, dark months of the year he pays about $20 or $30 per month in electricity.
In all, he's cut his electricity bill by about 85 percent, Rao said, enough to pay back his investment in about nine years.
"I come from a city in India where electricity was very high so we learned to conserve at a very young age," he said.
The money for the Commonwealth Solar program comes from Massachusetts Renewable Energy Trust, which is funded through a small surcharge on electricity bills that amounts to about $25 million annually.
The program always anticipated spending about $17 million a year for four years on the program.
Already the program has spent about $15 million, with another $3 million or so in requests -- prompting the governing board of the trust to release the second $17 million installment. The four installments will total $68 million through 2011.
Of the nearly $15 million already disbursed, about $4.5 million went to homeowners, $3.3 million went to public buildings and $6.7 million was spent on commercial properties. All told the program has led to the production of 4.6 megawatts of renewable energy capacity through rebates awarded to 421 homeowners, businesses and institutions across Massachusetts.
Giudice said the money is helping "prime the pump" for a solar industry in Massachusetts, in part by helping encourage companies that make and install the panels to stay and grow here.
"These funds are bringing down the cost of getting energy from the sun," he said. "And it's only the beginning."
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
Click to enlarge
Stumble It!
