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CPS Energy to offer more solar rebates, add cost-of-service fees

May 23, 2014

By Robert Varela
Editorial Director
The Board of Trustees of CPS Energy in San Antonio, Texas, unanimously approved a program that will add $21 million in solar rebates to the $30 million awarded since 2008. The program also will keep the San Antonio utility’s net metering system in place and will develop a solar leasing and community solar project for customers who are unable to install an individual system. The program includes a fee structure to recover CPS Energy’s cost of service, which must be approved by the San Antonio City Council.

"Solar is a centerpiece of CPS Energy’s strategy for the future–both utility-scale and rooftop," said Cris Eugster, executive vice president and chief generation and strategy officer. However, the utility must transition from an incentive-based model to one that is more market-based if the program is to be sustainable as more customers put solar on their rooftops, he told the board.

While only a small number of customers have installed solar thus far, the growth rate has been 400 percent in the last three years, based largely on what Eugster said is one of the more generous rebate programs in the country. CPS Energy is adding another $21 million to its rebate program because it wants to continue to support the industry, he said. 

A solar customer whose system is large enough to zero out his or her bill still relies on the grid as something like a battery, taking power a portion of the day when the sun is hottest (typical solar production is about five to six hours over a 24-hour period). The grid then supplies power to that home over the remaining hours. But the customer doesn’t pay anything toward the cost of maintaining that grid or other necessary infrastructure.

The proposed fees include a one-time commissioning fee of $450 for residential systems; larger systems would be charged the actual cost. New solar customers will also pay a monthly grid fee of $1 per kW-month for systems up to 10 MW; $2 per kW-month for systems of 10 to 20 MW; and $3.50 per kW-month for systems of 20 to 25 MW. For a typical 5kW system, that’s about $5 a month. Grid fees will grow to a maximum of $17.50 a month as the program is phased in, CPS Energy said.

Existing customers will be grandfathered under the current program, which does not have any cost-of-service charges.

CPS Energy will continue to offer a rebate of $1.60/W for systems up to 10 MW; $1.15/W for systems of 10 to 20 MW; and $0.70/W for systems of 20 to 25 MW. That translates to an average residential rebate of roughly $10,000 per residential system and $60,000 per commercial system, the utility said. The rebate will be updated annually based on a cost calculation of 40 percent of the total cost of the solar system. Eugster told the board that if solar prices do not fall as anticipated, the rebate amount could be revisited.

The goal is to add another 25 MW of solar distributed generation to the 15 MW of residential and commercial systems already installed, "while at the same time creating a stable business model that will allow CPS Energy to even more aggressively promote rooftop solar," the utility said.

Mayor Julián Castro said the City Council would study the fees further before voting, likely in June.

To add options for customers who cannot install solar on their property., CPS Energy is working to develop solar leasing and a community solar project for customers who rent, whose rooftops are not situated well for solar or who can’t afford the upfront costs to buy a system.

A presentation on the proposal is posted on CPS Energy’s website


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