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SolarCity CEO: Solar incentives won't go as far next year

Posting in Cities

Solar tech may be getting cheaper, but the pool of rebates and other funding mechanisms is shrinking

I've been keeping tabs on SolarCity for about a year now, because of its unique approach to helping both residential consumers and small businesses figure out how to invest in solar technology. SolarCity provides the full gamut of solar services— design, financing, installation and monitoring.

Even though it's represented only in five states today (Arizona, California, Colorado, Oregon and Texas), SolarCity has collaborated on three separate funds with U.S. Bancorp Community Development Corporation to provide $190 million in solar project financing between 2010 and 2009. It's doing a lot of good because it is helping the average citizen or small business find the money to invest in renewable energy. The installation shown below (a car port in San Francisco) is a 129 kilowatt-system capable of producing 183,595 kilowatt hours of power annually.

I caught up with the company's CEO and founder Lyndon Rive about a week ago to pick his brain about future strategy (he's eying the east coast but not sure when). We ended up talking about two things that I thought were worth repeating: First, is the idea that solar rebates and incentives will go farther if you wait until the technology gets cheaper and Second, is the idea that if you buy now, your technology will become obsolete.

So, let me preface the rest of this blog by saying that I KNOW it's in this guy's interest to sell solar technology NOW, so please read the rest of my comments with this in the back of your mind. To continue, though, let's consider his two points separately.

1) Even though the cost of solar technology is dropping, because of advances in the technology, that doesn't mean you'll be able to make state rebates or incentives for solar technology go farther if you wait, according to Rive. That's because these incentives are apparently decreases in direct proportion to price decreases. The average incentive is worth about $1 per watt versus $4 per watt a couple of years ago, Rive says. So, if you're seriously thinking about installing solar technology you should doublecheck the incentives that are available in your state and see how far they go now versus one year from now. "It actually would have been cheaper last year to invest in some of these technologies," Rive says.

2) The other thing worth considering is that solar technology isn't like your average PC. That is, it doesn't become obsolete in the span of a couple of years. Sure, there will be technology advances that maybe make your system seem dated, but Rive points out that few technologies have warranties that are as long as the ones associated with solar technology. Some of them are 25 years. "I can't think of any other piece of equipment anywhere that has a 25-year warranty," Rive says.

If, for some reason, you invest in technology and find out later than you could have gotten a cheaper production deal elsewhere, SolarCity has pledged to make up the difference, Rive says.

Heather Clancy

Section Editor

Heather Clancy has written for United Press International, ZDNet, Entrepreneur, Fortune Small Business, the International Herald Tribune and the New York Times. She holds a degree from McGill University. She is based in New Jersey. Follow her on Twitter. Disclosure