January 2006

Colorado heads into the future with solar power

Denver, CO— In an effort to jumpstart the development of the solar power industry in Colorado as mandated by the voter-approved Amendment 37 initiative last November, Xcel Energy made an interim filing that would allow the program to begin in earnest on January 1, 2006.

The filing with the Colorado Public Utilities Commission (CPUC) sets forth the amount Xcel Energy would charge all customers per month to fund the state’s mandated Renewable Energy Standard (RES). It also establishes the rebate amount as required by Amendment 37 that will be paid to those who take part in the solar program.

The CPUC has until March 31, 2006, to establish rules and regulations for the RES in Colorado, including solar power development.

“We need to begin the installation of solar resources as quickly as possible, if Xcel Energy is to meet the mandates approved by Colorado voters,” said Fred Stoffel, Xcel Energy vice president for policy development.

Xcel Energy would charge customers an additional 1 percent of their monthly electricity bill to support the renewable energy mandates, through a proposed electricity “rider” known as the Renewable Energy Standard Adjustment (RESA). The Colorado General Assembly approved a charge up to this amount earlier this year.

Based on projected electricity bills as of January 1, 2006, typical residential customers would pay an estimated $.59 a month and typical small-business customers would pay an estimated $1.14 a month to support renewable energy activity. Larger business and industrial customers also would pay 1 percent of their total monthly bill. In total, Xcel Energy would collect an estimated $22 million a year through RESA to support the mandates.

A second component of the filing addressed in part the total solar payment for customers who install photovoltaic systems. The total solar payment would be $4.50 per watt.

In its filing, Xcel Energy first seeks to rebate customers $2 per watt installed on customer premises, up to 10,000 watts (or 10 kilowatts, as 1 kilowatt equals 1,000 watts). Also as part of the program, the company would purchase Renewable Energy Credits (RECs) generated by the customer’s system, for $2.50 per watt. These credits then would be counted toward the company’s RES requirements.

A common size for residential photovoltaic systems in Colorado is 2-3 kilowatts, and payments to customers at this size would be in the $9,000 to $13,500 range. This would cover approximately half of the installation cost, since typical photovoltaic systems are priced at $8,000 to $10,000 per kilowatt.

Under the initial program, customers may install up to a 10-kilowatt system on their premises, for a recovery of up to $45,000. For installations larger than 10 kilowatts, a future program is planned to provide for a competitive solicitation, or bidding process.

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