LIPA cuts subsidy for home solar-energy systems

THE Long Island Power Authority has once again cut its subsidy for home solar-energy systems - the fifth such reduction this year, slicing LIPA's rebate in half since December.

The reduction, which LIPA says is the result of lower system costs, popular response and a depleted solar budget, brings the rebate to its lowest level since the program started in 2000.

On Monday, LIPA cut the solar rebate to $1.75 per watt, from a previous $2 per watt. That's down from the $3.50 in place on Dec. 31.

For the largest 10-kilowatt (or 10,000-watt) systems, the 25-cent per watt reduction amounts to $2,500 - money that now must come from consumers' pockets or reductions in system costs. The amount can add a year or two to the time it takes for the systems to pay for themselves through electricity savings.

LIPA's 2010 budget for solar installs is at an all-time high - $21 million, including a $6 million state grant. But more customers are drawing from it than ever before: nearly 1,100 so far this year.

LIPA and solar advocates say the reduced rebate is a mixed blessing. They say reduced system costs mean there's less need for a LIPA subsidy, which is paid for by all LIPA ratepayers, including those who can't afford solar.

Michael Deering, LIPA's vice president of environment, said a big factor in the decision was that the total installed cost for systems is down sharply from a year ago - from $7 a watt, to around $5.50 a watt, or $70,000 down to $55,000 for an average system. "We've seen the laws of supply and demand actually work," he said. "This gives us the ability to restructure our rebate."

Gordian Raacke, director of Renewable Energy Long Island, a LIPA-funded solar promoter, said reducing the rebate amount in itself isn't a bad thing because it will allow the program to last longer and be available for more customers.

Raacke said his only beef is that frequent changes to the rebate structure make it hard for solar installers to run their businesses with predictability.

Deering said LIPA has already committed $18.5 million of a total $21 million for home and business solar installs this year. Even as interest in the program increases, Deering said, LIPA envisions a day when it will be eliminated entirely - within five years at the latest, he said.

Sail Van Nostrand, chairman of the Long Island Solar Energy Industry Association and owner of Energy By Choice in Northport, called the rebate cut "a good news, bad news" scenario.

"Of course it's harder to sell when there's 25 cents less in the program of someone else's money," he said of LIPA's lower subsidy. At the same time, he said, the cut means the program is working, expanding beyond LIPA's means despite previous cuts in the rebate.