Los Angeles Solar Power Rebates to be Reduced

Los Angeles residents who are considering installing solar panels have an incentive to act quickly: On Tuesday, the city's Board of Water and Power Commissioners approved changes to the Solar Incentive Program that will reduce rebates starting Jan. 1.

The Department of Water and Power's present rebate is $3.24 for every watt installed. A 4-kilowatt system, for example, would receive a $12,960 rebate.

In 2011, that rate will decline to $2.20. That same 4-kilowatt system will see its rebate drop to $8,800 come Jan. 1.

Further reductions -- to $1.50 per watt and, ultimately, to 60 cents -- will roll out as time passes and the utility meets goals for home-generated electricity.

The DWP has been deluged with applications for residential solar rebates since 2009, when the U.S. Emergency Economic Stabilization Act kicked in, replacing a $2,000 federal tax credit cap with a dollar amount equal to 30% of the installation cost. The average residential solar system costs between $35,000 and $40,000.

L.A. homes generate 22 megawatts each year, far less than 1% of the 25,000 gigawatt-hours used in the city annually.

In 2007, California Senate Bill 1 set $318 million as the amount that the DWP should allocate to help homeowners pay for solar installation through 2016. The DWP budgeted $30 million annually to residential solar rebates, but this year's applications have pushed the rebate requests to as much as $70 million. The utility's decision to decrease the rebate rate beginning 2011 is an attempt to stretch the program's funds through 2016.

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