The Long Island Power Authority has reduced the amount it pays in rebates for home solar energy systems to the lowest amount to date amid fears that the rapidly depleting budget for the popular program could run out by month's end.
LIPA announced to solar installers last week that it would reduce the amount it pays to 66 cents a watt, down from a recently instituted 99 cents. The rebate started the year at $1.75 a watt, but an influx of solar leasing companies is quickly gobbling up remaining budget dollars.
The changes mean LIPA rebates for the largest residential systems can total no more than $6,600 for systems that cost as much as $48,000. In previous years, LIPA paid more than half of system costs.
Last month, LIPA attempted to address its quickly depleting solar rebate budget by instituting a $75,000 cap on the amount of rebates an installer could apply for. After complaints by the largest solar installers, including new leasing companies, the cap was removed last week.
One installer who listened in on a LIPA conference call last month said the authority told solar companies it has around $1.3 million left for solar rebates for the remainder of the year -- down from $3 million last month, and $28 million at the start of the year.
In a statement, Mark Gross, a LIPA spokesman, confirmed LIPA's remaining home solar rebate budget was just more than $1 million, and said he was "not aware of any discussions" about additional funding sources.
"While our commitment to solar is ongoing, we must be mindful of our customers who bear the costs of these programs," he said. "Therefore, we must keep rebates to the minimum levels to achieve our goals."
Kevin MacLeod, owner of KPS Contracting, a Bay Shore installer and a member of the Long Island Solar Energy Industries Association, said loss of the rebate would harm a market that was largely built by local installers over the past 15 years through system sales. Leasing companies, many from out of state, entered the market just this year, and now dominate the field, he said.
Lower rebates mean installers will have to cut their profit margin by half or more, or get out of the business, MacLeod said, adding, "It's rough."
Leasing companies offer no-upfront-cost options, which have opened the market to many more customers. Roof Diagnostics of Bohemia, which installs leased systems, said it had a backlog of more than 100 solar jobs last month. Nevertheless, the companies would prefer to see the rebate program maintained.
"We're hoping the program is funded or helped by the state and the state sees this as a really optimistic concept for solar," said Kelcy Pegler of Roof Diagnostics. He suggested LIPA take funding from other underused portions of its renewables budget.