Home Solar installs falling in California

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The LA Times reports that California is seeing a big drop off in rebate applications for solar power systems. It seems that to get a rebate you have to also switch to a time of use rate with your utility.

The math of economics is not working out for many, especially for smaller systems that don’t fully cover use during peak hours. The result: homeowners are reluctant to go with solar energy because its starting to become economically unfeasible.

The difference between peak and off-peak rates is particularly large in the 11 counties of Central, coastal and Southern California, where CalEdison provides electricity service to 13 million customers. CalEdison charges summer time-of-use rates that range from 29.7 to 35.9 cents per kilowatt-hour between 10 a.m. and 6 p.m. on weekdays. It drops to a range of 16.3 to 18.6 cents per kilowatt-hour from 10 p.m. to 6 a.m. weekdays and all weekend days and holidays, according to documents filed with the PUC.’ There is likely an optimal system size for the smaller consumer of electricity that reduces consumer costs, but with so much in flux in today’s solar power market its hard to pin down the numbers, as it becomes a moving target.

Another factor is the strong worldwide demand for solar panels, almost to the point of shortages. In such a market driven economy, when a product is in high demand, there is little flexibility on price and often contracts take a long time to fill to completion just waiting for panels.