Slots for solar incentives fill quickly

"People compare it to getting tickets to a big rock show," Pacific Power spokesman Tom Gauntt told The Oregonian.

Among the winners was Mark Pengilly of Portland, who sat at his home computer and hit "send" on his application just as the clock struck 8 a.m. A member of Oregonians for Renewable Energy Policy, an organization that lobbied the Legislature for the program, he wants to power an electric or plug-in hybrid car with his planned 6.5-kilowatt system.

"I want to reduce the amount of carbon I contribute to the world," Pengilly said.

Portland General Electric and Idaho Power offers also filled quickly. PGE accepted 97 projects generating about 1 megawatt. Idaho Power approved 30 projects from Oregon customers totaling 200 kilowatts. The 75 small- and medium-size projects accepted by Pacific Power amount to 768 kilowatts.

The pilot program enacted by the Legislature offers 15-year contracts paying up to 65 cents per kilowatt hour, minus the current market rate, as an incentive to create enough solar power for 2,500 homes over the next four years. The second of eight rounds of enrollments opens October 1. The current market rate in Portland is about 8 cents per kilowatt hour.

Jonathan Cohen, principal and lead engineer for Imagine Energy, a Portland installer and consultant, cautioned that there are costs that many people don't understand.

The difference between incentive payments and the market rate are taxable. Systems must be insured for $1 million. Owners must pay $10 a month for an extra power meter. And as market rates rise, they will eat into the profits.

"Factoring in those things on a 3-kilowatt system adds costs of about $3,000," Cohen said. "Having lots of people excited about solar is wonderful, but we just don't want to have a backlash."

Known as a fee tariff, the premium rates are modeled on a European system. But unlike in Europe, solar producers cannot be paid for more than they produce.

Worried that private solar systems could amount to utilities, the Oregon Public Utilities Commission limited the amount of power that qualifies for the premium to the amount producers consume in a year. Monthly credits for excess power produced during sunny periods can be applied to cloudy months when more power is consumed than produced.

People who miss out on the premium rate can still qualify for other incentives. They include state and federal tax credits and a cash incentive.