One of the largest incentives to “go solar” is probably the least known.
The Renewable Portfolio Standard (RPS) isn’t a cash-to-buy program. In fact, it doesn’t even involve consumers — at least not directly. Still, depending on where you live, the RPS program can cut your up-front cost of installing solar panels by thousands of dollars.
Many states have implemented some form of RPS to smooth the economic transition to renewable energy sources and cut GHG emissions. In a nutshell: utilities that generate electricity are given a specific number of years to increase their use of renewable energy sources.
Utilities in Arizona, for example, have until 2025 to get 15% of their electricity from renewable sources. That puts us about in the middle of the pack in terms of how aggressively we’re pursuing a change.
How utilities reach these mandated numbers is determined largely by geography. Different renewable energy sources are found in different locations. That’s why you find large wind farms being planned in the Midwest and massive solar projects here in the Southwest.
As part of the RPS, many states mandate or encourage small-scale energy production (distributed generation).
A home with solar panels on the roof is one of the best examples of distributed generation. When electricity produced on your roof is allowing you to watch Stephen Colbert face down a Formidable Opponent, no energy is lost traveling long distances over high power lines. It also reduces the need for building and maintaining expensive high power lines (that can create environmental problems of their own).
Here’s how an RPS works directly for you: If your utility company is going to meet its mandate, it needs you to install solar power or some other renewable form of electricity. But the upfront cost of putting a solar array on your roof still challenges most of our budgets. We’re talking in the $20-$30,000 range. To entice you over that range, utilities are willing to pay a cash incentive. In Phoenix at the moment, my provider, APS, is paying $3.00/watt. So the 3.1 kW system I’ve got my eye on (one of several systems I’m considering) would put over $9,000 back in my pocket.
Here’s the latest list of states offering with mandated RPS programs. (For more information go to the Database of State Incentives for Renewables & Efficiency.)