California Solar Market Cloudy

Real Estate Agent with The Mills Team
California Energy Commission has published data that show slumping figures in the state's number of applications for solar energy rebates in the new housing sector. There were three hundred applications in the first two months of 2009, as opposed to twelve hundred applications in the last two months of 2008.

Experts from the Commission have made a loose connection between the failing housing market and the burgeoning solar market. The California Solar Initiative is run by the state Public Utilities Commission and inspired by Governor Schwartzenegger (R), The rebate program was begun in 2007, and through out that time the California housing market has seen the average price for a home fall from over $400,000 to under $300,000, from December 2007 to December 2008. These numbers are from the California Association of Realtors. The new home construction has been halved as a result of the falling market prices, according to the California Building Industry Association.

A larger trend may be evident from the lower number of applications, as the rebate program allows for 36 months to complete the solar project from the time the application is granted. What this suggests is that the pessimism about the future of the housing market by investors points to a longer term recession.

There is another market for solar photo voltaic cells in existing homes, or a solar retrofit. The numbers released by the CSI show almost as much dramatic loss for residential applications for retrofit as applications for new construction. The real drive behind the governor's vision of one million solar rooftops was the retrofit sector of the housing/energy market. The numbers for 2009 are significantly lower from only one year ago, by almost half.

The experts at both the CEC and the PUC point to a rebate level change from 2008 to 2009 was about to take place. Also it is thought installers feared the removal of a federal tax incentive, and there is always a notable short-term slow down when a rate change goes into effect.

However, the PUC has pointed out that they have never had the number of completed installations before, with over eleven megawatts interconnected in the first two months of 2009. Mary Sterkel from the CSI has admitted that this is not the best picture for the solar sector, but points to consolidation of investor companies as a contributing factor for the solar slow-down.

The two largest investor-owned utility companies in California are Pacific Gas & Electric Co. (PG&E) and Southern California Edison (SoCal Edison). Officials at both utility companies seem aware but not panicked about the new projects low numbers. They also insist the rebate level change has had a short-term impact.

A spokeswoman from PG&E said the numbers were lower everywhere and that it was too early to determine if that was a trend. And SoCal Edison maintains that their numbers for the first of 2009 are above the number of applications for solar projects for the same time in 2008, regardless of the end of year boost seen in November and December 2008. Managers of solar projects from both companies surmised that the new construction applications for solar rebates will be slow for quite some time. Search La Jolla Condos.

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Ruth Mills

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