Scott Anders thought he would see a line out the door for people wanting to sign up for solar energy system rebates to help curb the unstable energy costs that were brought on by the energy crisis in 2000.
Rebates would allow residences and businesses to install solar energy systems, also known as photovoltaic systems, at a lower cost and to produce their own energy without relying on the local energy companies, whose prices were continually rising.
Instead, what he saw was a minimal response from the community and an excess of leftover money available from the Self-Generation Incentive Program, which includes rebates for fuel cells, wind turbines and photovoltaic systems.
In the beginning, “I said we should have a wait list or some process in place because this money is going to go fast. But it didn’t,” said Anders, the director of policy and planning for the San Diego Regional Energy Office, an independent, nonprofit corporation that provides information, research, analysis and long-term planning on energy issues. “We opened the door, and nothing. So the first couple of years it was pretty slow. It was a pretty slow uptake.”
But now Anders’ prediction is coming true as more people are looking at solar energy as an alternative to traditional energy sources.
“By October 2003, we started to see a real takeoff for solar,” Anders said. “By the end of 2004, we had a wait list of 29 projects.”
Since 2001, the number of projects in the program has increased from four to 165 countywide , a 4,025 percent increase.
The program, which is mainly for commercial customers since the minimum system size is 30 kilowatt, the equivalent of 3,000 square feet, has just been extended to 2007.
The program, which began in 2001 with $125 million in funding from the California Public Utilities Commission, currently has $4.65 million per year to spend on solar power, with most of that money already tied up in projects waiting for approval.
“This year we got some ridiculous number of projects,” Anders said. “Right now we have $51 million worth of projects on the wait list.”
Recently, the SDREO has had to stop placing people on the wait list due to the high demand and the limited amount of money, he said.
The number of projects on the waiting list stands at 63.
And while the wait has grown, the amount of the rebates continues to decrease.
In 2001, the SDREO offered a rebate of $4.50 per watt or 50 percent of the cost of the project depending on whichever is the least expensive. By 2005, the rebate decreased by 22 percent to $3.50 and is expected to drop to $3 by 2006.
And even though the rebates are getting smaller, which results in customers having to pay more for the projects, the line continually gets longer for those interested in installing solar energy, Anders said.
The increase is likely due to the possibility that more people are aware of the program and the need for people to have the ability to produce their own power, Anders said.
“People are saying, ‘I want to generate my own power. I want to control my own power,’ ” Anders said. “We have a lot of industries here in San Diego, especially the biotech (companies), where if power goes out they could lose millions of dollars.”
While the San Diego Regional Energy Office helps customers with larger systems, the California Energy Commission helps those who seek to install a solar system of less than 30 kilowatt.
The wattage for an average household ranges between 5 and 6 kilowatts, which could produce enough solar energy for nearly 42 homes.
The CEC offers a rebate that’s less than what is offered through the SDREO, which administers the program developed by the California Public Utilities Commission, but is still seeing an increase in users.
“San Diego is the number one city with projects completed,” said CEC spokesman Percy Della.
The rebate, which stands at $2.80 per watt and drops 20 cents every six months, has helped build 12,000 systems statewide since the rebate program was initiated in 1998.
“We have a high demand for these systems,” Della said. “A lot of people want to help save electricity.”
In San Diego alone, the CEC has built more than 1,500 systems, paying users $22 million worth of rebates.
The funding for the rebates comes from ratepayers, who contribute 6 cents a month to the program, Della said.
“We have $81 million left in funding and we expect the money to last till the end of 2005,” he said.
Mitch Mitchell, the vice president of public policy and communication with the San Diego Regional Chamber of Commerce, said that solar energy is an alternative that businesses should consider when looking at reducing their energy costs.
“The SDREO self-generation incentive program is a tremendous program,” Mitchell said. “We encourage our members to become more energy efficient to look at all energy opportunities. With solar energy the cost is becoming more reasonable and what it all comes down to is cost and efficiency.”
And businesses are increasingly becoming interested in solar energy systems because of its benefits, Mitchell said.
“We are seeing a significant increase in interest and research from businesses,” he said. “Alternative energy is going to be the saving grace for businesses. Just because energy isn’t on the front page every day doesn’t mean we aren’t going through a crisis. We are far from being where we should be. We as a region cannot afford to be complacent and think that our energy infrastructure is at an appropriate level.”
Vickie Gowey, owner of Clean Power Resources, Inc., a Poway-based installer of photovoltaic systems, said that the decrease in rebates has in no way deterred customers from installing solar power.
“Even with the rebates decreasing, there has been even more interest in PV systems,” Gowey said.
Revenue Pours In
The company, which was founded in 2002, has increased its sales yearly, growing in revenue from $18,000 in 2002 to approximately $500,000 in 2004, an increase of more than 2,600 percent.
The company, which has four employees, installs an average of 16 solar systems per year with an average cost of $38,000-$40,000 per system.
“We are hoping to increase our business as there is more interest in solar power,” Gowey said, adding that the majority of systems installed by the firm are residential systems.
Gowey, whose company’s slogan is “If you just opened your utility bill, you probably need CPR,” said that the increase in those looking to install solar power in their homes or businesses is likely the result of high energy prices.
“Solar power enables them to buy their own power instead of renting it from a utility,” Gowey said. “For example, I look at it this way: If you are renting an apartment for $1,500 a month and then you commit to buy a house and the mortgage is $1,500, you are paying the same. However, you own it.”
For an average size home, the cost to install a solar system after rebates would cost about $25,000, Gowey said, adding that the payments are made on a long-term basis, much like a mortgage.
“It is still a good deal considering the savings and that it is a fixed cost every month,” she said.
“Fossil fuels are not going to last forever, and for us in California, where we got the sun shining, you know why not install solar power?” Gowey said.
Californians are often known for being environmentally friendly, which may be one reason for the increase in solar systems.
“A 6-kilowatt system eliminates 120 tons of carbon dioxide over a period of 25 years,” Gowey said. “And if one in 10 homes were powered by a PV system instead of fossil fuels, the impact would be incredible.”
Gowey said that in the future, solar power will become more practical as more and more people learn about the benefits.
“I think that in the long run, solar systems will become mainstream, but through education we could get there a lot sooner,” she said.
A major advantage to solar systems is the cost. Corporate Computer Centers, Inc., a San Diego-based computer reseller, installed a 40-kilowatt system nearly two years ago.
The company decided to install the system after energy bills reached $1,000 a month, said Michael Schriber, vice president of the company.
The system, which cost $200,000, has saved the company at least $10,000 a year in energy costs, said Schriber.
“As long as we produce as much energy as we use, it doesn’t matter what the cost is,” Schriber said. “Our bills now are basically zero.”
The company, which participated in the SDREO self-generation incentive program, received $150,000-$200,000 in rebates, resulting in a nearly 50 percent discount in price.
“We think it (the cost) was worth it,” Schriber said. “We own the building and it adds value to the property itself.”
Governmental agencies have also been prone to installing solar energy systems.
Naval Air Station North Island in Coronado installed a 750-kilowatt solar electric system in 2002, which is estimated to save the facility more than $228,000 in annual operating costs.
The solar system provides about 3 percent of North Island’s energy and is estimated to produce enough electricity during the day to power more than 930 homes, according to the Navy’s Web site.