High demand for rooftop solar electric panels, especially for commercial buildings, has exhausted Xcel Energy's Solar Rewards subsidy program for the year, shutting out other customers, solar industry officials said Monday.
"People are really excited about solar," said Rebecca Lundberg, CEO of Powerfully Green, a solar installation company based in Champlin that now has eight residential solar projects in limbo. "Now all of a sudden, they pull the rug out."
John Wold, who manages Xcel's solar programs, said that the final $1 million of its $4.6 million 2011 Solar Rewards program was awarded recently to commercial projects whose applications had been on hold while the Legislature enacted changes to another solar subsidy program. "That took a big chunk," he said.
Some industry officials are concerned that the other, state-mandated Xcel program to encourage installation of Minnesota-made solar panels is almost exclusively subsidizing commercial solar projects, and eventually may have little or no money left for residential solar installations.
"It really chills things," said Gary Shaver, president of Silicon Energy, a Marysville, Wash., company that began making panels this month for the residential market at a new plant in Mountain Iron, on Minnesota's Iron Range.
His company had high hopes that Xcel's solar incentive programs would help boost sales to homeowners who otherwise couldn't afford installations costing up to $50,000.
"We are very concerned about it," said Shaver, who expects to ship his first Minnesota-made panels in two weeks.
In the first year of the program in 2010, nearly half of the Solar Rewards allocation went unspent because not enough customers applied. But that changed after the Legislature last year ordered the utility to offer a second subsidy for Xcel customers who install solar panels made in Minnesota.
That subsidy, known as the Minnesota Bonus, has been a boon to Xcel's commercial customers. Until recently the only panels produced in the state were for flat-roofed, commercial applications. Many commercial customers combined the two subsidies. Under the rules, the bonus covers up to 60 percent of the cost.
Wold said industry officials have a "valid concern" that commercial installations are dominating the applications, although $3 million of the $4 million Minnesota Bonus program still is available.
Some residential installers who met in St. Paul Monday want Xcel to set aside part of the solar subsidies for residential customers and to boost the Solar Rewards budget. Wold said state law doesn't allow Xcel to do either.
Homeowners who are shut out of Xcel Solar Rewards this year still could get in line for the subsidy next year. The panels could even be installed this year, but projects wouldn't get the lump-sum payouts until next year, nor could they be connected to the grid before then, Wold said.
Lundberg, the Champlin installer, said she submitted eight projects to Xcel last week for subsidy approval, only to learn that the 2011 Solar Rewards money was committed. She said those homeowners now face tough choices, and may need to pay more up front.
As recently as 10 days ago, Xcel was telling customers that money was still available, Lundberg said. On Monday, Xcel's Solar Rewards Web page still asserted that $1.9 million was available. But the page was last updated July 11.
Wold said he has promised to give the industry weekly updates from now on.
David Shaffer • 612-673-7090