Solar Rebates: Saving the Planet and Your Pockets

By Amelia Walley, AAE Economic Analyst Intern

Solar power is clean and sustainable, and though its costs have dropped substantially over the past years, it is still too expensive for some to make the leap. By reducing the initial cost barrier of switching to solar, solar rebates are a great way to incentivize customers to install solar photovoltaic systems.

​In order to open the market to a wider array of customers and income levels, rebates have been a successful way to reduce the initial cost barrier. 

Customers save money not just in the installation but in future energy bills, earning a sizable return on investment over time. Energy companies hold onto Renewable Energy Credits and make progress toward their clean energy goals. Together, we create local jobs, and best of all, we work toward a greener future by drastically reducing carbon emissions, one solar panel at a time.

Get the rundown in this helpful infographic

​Duke Energy in North Carolina and CPS Energy of San Antonio, Texas, are two examples of how solar rebate programs can succeed. Reviewed below, these programs could serve as a model for what one in New Orleans may look like.
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​CPS ENERGY SOLAR REBATE PROGRAM

In 2007, CPS Energy, the country’s largest municipally owned utility, began offering solar rebates to its customers. This program was heavily expanded in 2009 as part of their 12-year, $850 million Save for Tomorrow Energy Plan (STEP).

Each year, the incentives have changed to adapt to the needs of its customers, and in 2019, CPS announced that it would be offering a flat rebate as opposed to the per-watt rebates it had offered in years past. CPS allocated $15 million for these solar rebates in 2019. The first $9 million would pay a flat $2,500 per project, with a $500 bonus for using locally-produced panels; the next $5 million would pay $1,500 per project, with the same bonus for locally-produced panels. The remaining $1 million was set aside for commercial projects and paid $0.60 per watt, plus an extra $0.10 for locally-produced panels. This $1 million was fully allocated earlier in the year.

​CPS’s annual reports show that solar activity has been strong. At the end of 2018, 13,680 total customer-installed solar PV systems had been installed since the introduction of their rebate in 2007. In 2018, CPS reported a gross energy savings of 34,222,890 kWh from its residential solar rebate, and 6,654,482 kWh through its commercial solar rebate. CPS does not offer rebates to customers who are leasing systems, and only systems larger than 1kW are eligible for rebate. ​
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Frequently Asked Questions

As a CPS Energy customer, how do I get the rebate?

First, complete the program application. Next, provide all required pre-construction documentation. Request a commissioning test. Upon successful inspection, submit your rebate application. 

How much can I get back?

• For the first $9 million: $2,500 flat rebate, $500 bonus for using locally-produced panels
• For the next $5 million: $1,500 flat rebate, $500 bonus for using locally-produced panels
• $1 million for commercial projects: $0.60 per watt, $0.10 bonus for locally-produced panels

Who retains any Renewable Energy Credits earned?

CPS will retain all Renewable Energy Credits and other environmental attributes (other than tax credits) from power generated by the system.

Are leased systems eligible?

No, only systems owned by rebate applicants are eligible for rebate.

​​Who is the best installer?

CPS as a municipal entity cannot recommend a particular installer, but they do have a list of installers who have obtained their NAPCEP certification and have registered with them. Note that all PV systems must be priced at $4.00 per DC watt or lower to be eligible for rebate.

Is there an early termination fee?

The contract for this rebate specifies a five-year commitment to CPS. Customers who do not maintain the operational efficiency of or remove their system from CPS Energy’s grid before are subject to refunding a prorated portion of their rebate.

How was this program created?

The program in its current form is part of their Save for Tomorrow Energy Plan (STEP).

How much does the program cost?

The program was extended for another $15 million in 2018. Since its beginning in 2007, around $129 million has been spent on the program. 

How successful has the program been?

As of late 2018, 13,680 solar PV systems have been installed by CPS customers totaling over 110 MW of capacity. CPS expects to fund another 6,200 installations in 2019.

​DUKE ENERGY SOLAR REBATE PROGRAM

​Upon the North Carolina Utilities Commission’s approval in April 2018, Duke Energy began offering a one-time rebate in July 2018 to customers installing solar photovoltaic systems on their homes and businesses as part of a five year, $62 million program included in the state’s 2017 Competitive Energy Solutions for North Carolina law (H.B. 589). The $10 million allocated for 2018 rebates ran out in less than two weeks, and in 2019, the $10 million set aside for homeowner rebates was used up in two days, helping to install over 1,300 new residential projects. Due to such a high volume of interest in the program, Duke now has a waiting list.

​When the program began in July 2018, Duke had only around 6,000 rooftop installations. As of January 2019, that number had jumped to 8,700 (that’s 2,700 new systems in six months). Duke’s rebate is paid out on a per-watt basis, with $0.60 per watt paid to residential customers up to 10 kW-AC, $0.50 per watt to commercial and $0.75 per watt to nonprofit projects, each up to 100 kW-AC, under a ten-year commitment to interconnection with Duke’s grid. Both owned and leased systems are eligible as long as rebates are applied for within 90 days of system installation.
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Frequently Asked Questions

As a Duke Energy customer, how do I get the rebate?

First, submit an interconnection request. Then, submit a rebate application with your project ID within 90 days of its installation. 

How much can I get back? 

• Residential: $0.60 per watt, up to 10kW-AC ($6,000 max)
• Commercial: $0.50 per watt, up to 100kW-AC ($50,000 max)
• Nonprofit: $0.75 per watt, up to 100kW-AC ($75,000 max)

Is there an early termination fee?

Yes. The contract period for this rider is 10 years. If the system is removed or becomes inoperable, or if electric service is terminated or discontinued under the prescribed rate schedule, before the 10 years have been completed, the customer will be subject to an early termination fee.

How is kW-AC defined for the rebate payment?

kW AC Nameplate Capacity is defined as the manufacturer’s nameplate rated kW AC output capability of the inverter.

Who retains any Renewable Energy Credits earned?

Based on current net metering law, any customer receiving service under a time-of-use demand rate schedule will retain their renewable energy credits (RECs).

​For any customer receiving service under a non-time-of-use demand rate schedule, any renewable energy credits (RECs) shall be retained by the company.

Are leased systems eligible?

Both owned and leased systems are eligible as long as rebates are applied for within 90 days of system installation.

How was this program created?

Duke Energy’s solar rebate program was included in the state’s 2017 Competitive Energy Solutions for North Carolina law (H.B. 589).

How much does the program cost?

This is a five-year, $62 million program. The past two years, $10 million has been allocated for the rebate.

How successful has the program been?

In just the first six months of the program, Duke Energy added 2,700 new solar customers.

​BEST PRACTICES

With the introduction of its solar rebate program, Duke Energy and its customers were faced with a negative byproduct: bad actors entering the market. Some companies attracted to the area by the program were found to be engaging in predatory sales tactics, exaggerating the scope of the rebate and misrepresenting where and how solar panels could be installed on homes.

​To combat this phenomenon, the North Carolina Sustainable Energy Association (NCSEA) drafted a “Solar Business Code” which holds solar installers in the association to a professional and ethical standard with risk for expulsion from the association if installers do not conform. ​

NCSEA is also working on a residential consumer guide for those looking to install solar PV systems. The guide will include what sorts of questions to ask when choosing an installer. CPS Energy has fought predatory sales in its area by requiring that systems be priced at $4.00 per watt or less to be eligible for the rebate. Our proposal includes this measure.
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​​WHAT A NEW ORLEANS SOLAR REBATE COULD LOOK LIKE

According to Google’s Project Sunroof, 94% of buildings in New Orleans are solar-viable. If all these installations were implemented, New Orleans could avoid 2.1 million metric tons of carbon dioxide emissions (1). To help offset the steep initial investment for customers looking to make the switch to clean energy, we recommend that Entergy New Orleans set aside $10 million in 2020 for a solar rebate program. The incentive shall be a one-time rebate, paid on a per-watt basis, to customers installing solar photovoltaic systems, under a five-year interconnection commitment to Entergy.

In order to maximize the impact of the rebate program, each system must be larger than 1kW to be eligible, and the incentive shall not exceed 10kW for residential systems and 100kW for non-residential systems. PV systems must be priced at $4.00 per watt or less to be eligible for the rebate. Modeled after Duke’s program, per-watt incentive shall be $0.60 for residential projects, $0.50 for commercial projects, and $0.75 for nonprofit projects. ​

​If Entergy allocated $8 million to residential projects, $1 million to nonprofit projects, and $1 million to commercial projects, with an average residential project size of 6 kW (2), New Orleanians could save 19,426,946 kWh a year with residential projects alone (3). That’s also 13 MW of nameplate generating capacity (4). To put that in perspective, in 2018 Entergy began a 5MW project with expectations to come in at $11.6 million, but could cost up to $14.85 million. Best case scenario, that puts costs to ratepayers around $2.32/watt (5). If Entergy invested this $8 million proposed, that 13 MW of solar (estimated above) would cost ratepayers just the cost of the incentive, $0.60/watt. Similar programs in the country -- particularly Duke Energy (North Carolina) and CPS Energy’s (San Antonio) -- have proven to be extremely successful. With such high solar viability, New Orleans has a chance to be a leader in the push for clean energy. All we have to do is take it.

Watt Conversion graphic

Frequently Asked Questions

What size systems are eligible for this rebate?

Systems larger than 1kW are eligible, but the incentive shall not exceed 10 kW for residential systems and 100 kW for non-residential systems. 

How much money can I get back for my system?

• Residential: $0.60 per watt, up to 10kW-AC ($6,000 max)
• Commercial: $0.50 per watt, up to 100kW-AC ($50,000 max)
• Nonprofit: $0.75 per watt, up to 100kW-AC ($75,000 max)

Are leased systems eligible?

No, only systems owned by rebate applicants are eligible for rebate.

Is there an early termination fee?

Yes. The contract for this rebate specifies a five-year interconnection commitment. If the system is removed or becomes inoperable before the five years are completed, the customer will be subject to an early termination fee.

Who retains any Renewable Energy Credits earned?

Entergy New Orleans

 

Sources & Data

1. Project Sunroof Data Explorer: Potential Impact
2. 6kW is the national average size of residential PV systems
3. $8 million/($0.60*6,000) to calculate the amount of 6kW systems the rebate could fund. This number is 2,222. Based on National Renewable Energy Laboratory’s PV Watts tool, 6kW systems in New Orleans produce an average of 8,743 kWh a year. 2,222*8,743 = yearly average 19,426,946 kWh (or 19,427 mWh)
4.  6kW*2,222 systems = 13,332 kW = 13.332 mW
5. 2018 06 21 UD-17-05 CNO R-18-222 R&O Approving AIP​​

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About the Author

Amelia Walley is an Economic Analyst Intern with The Alliance. Amelia graduated from Tulane University in 2018 with a degree in Economics. After a year in Colorado, she’s back in New Orleans to try to make a difference in the community she loves.

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