The controversy over Xcel Energy’s decision to reduce credits supporting residential solar systems comes down to a philosophical question.
Do you want the money collected from ratepayers to underwrite individual systems, such as home solar panels, or should it be used for systemwide projects?
That may be a bit of an oversimplification, but the central point is an important one and is at the crux of the dustup.
We believe it is in Coloradans’ best interest to have Xcel continue to develop systemwide renewable energy projects as it works toward the 2020 deadline of getting 20 percent of energy from renewable sources.
We’re glad Congress changed renewable energy laws to, in essence, allow people to claim a larger federal tax credit for solar projects.
Xcel contends that tax credit change, part of the $700 billion bailout package, will leave the economic picture pretty much the same for individuals who want to install solar panels at their homes.
Once they get all their credits and rebates — some of which still will come from Xcel — they’ll pay about half the total cost of a solar panel project. That was roughly the reimbursement rate before the changes.
However, Gov. Bill Ritter reportedly is concerned about the time lag between when a customer installs a system and when the federal government issues a tax credit for that system.
That, according to Ritter and solar industry representatives, could put off potential residential customers who don’t want to be burdened with higher upfront costs. It will, they said, have the effect of stalling the growth of the industry.
It’s a valid point, and we share their concerns. But Xcel says the money that no longer is paid to those who install residential solar systems will go to other, yet-to-be-determined renewable energy projects.
Keep in mind that money for the projects necessary to meet the 2020 renewable energy standard will, one way or another, come from ratepayers.
And we believe Xcel executives when they say that larger, centralized renewable projects are generally more efficient than individual projects.
Our reading of comments by the governor, published in the Rocky Mountain News, leads us to think Ritter favors bringing up these and other policy questions with the Public Utilities Commission and the state legislature.
We think that’s a good idea. The road to energy independence is a long one that will involve many choices with implications for the future.
A public discussion of the alternatives is an important way to ensure all voices are taken into account and we, as a state, make the right decisions.
