July 14, 2010; Source: Insidebayarea.com | Until the state clarifies why it is suspending rebates to tax-exempt organizations that install solar panels on buildings, nonprofits and other groups in California will be in the dark in about what to do. Late last week the California Public Utilities Commission announced it was putting a hold on rebates for solar energy projects that are aimed to cut power costs and increase the amount of megawatts generated by the sun.

The suspension applies to all school districts, cities, government agencies, nonprofits, and some businesses. The utilities commission said it had to temporarily halt the program because it fears the state won’t be able to fund all the requests for rebates from its $1.7 billion budget. Among its options, the commission is considering reducing the size of incentive payments.

Under its original plan, the state aimed to install 1,750 megawatts of solar capacity by 2016. Molly Tirpak Sterkel, the commission’s supervisor for the program, said the program has to be slowed down if the state is going to reach its goal. “Nobody wants lower incentives,” she said. “But we also don’t want to run out of money before we reach our megawatt goal.”

Insidebayarea.com reports that, according to Sterkel, “Tax-exempt groups have enjoyed significantly higher rebates than others since the initiative started, in part because they are unable to take advantage of federal tax credits. But many of those government and nonprofit agencies have turned to private companies to finance the projects, and those companies have been able to use the tax credits.” The suspension is expected to last for at least three months, and until then, those expecting to cash in on the solar program are out in the cold.—Bruce Trachtenberg