In what might be considered a sign of the times – albeit a little too soon for solar energy supporters, who see most of the heavy lifting still ahead – Colorado electric utility Holy Cross Energy’s board of directors recently voted to reduce the solar rebate from $2 to $1.50 per watt.

The rationale behind the reduction? The Colorado Governor’s Energy Office, or GEO, will begin offering rebates of up to $3 per watt in March of this year, less local utility offerings, so the Holy Cross board figures no one who has already committed to installing solar photovoltaic panels will lose any money. In fact, they might come out ahead.

The assessment is correct; homeowners installing solar panels this year in the counties where Holy Cross operates - Eagle, Pitkin, Garfield, Mesa and Gunnison – will likely get more financial help than they would have in 2009, as the GEO funding kicks in to offset Holy Cross incentives.

It’s the sentiment behind the assessment that is troubling. If cash-strapped utilities (i.e., Trico, Austin Energy, SRP, and LIPA) and states (New York, Massachusetts and California) begin to cut their solar incentives, the rapidly advancing solar energy tide sweeping the nation – which Biofuels Watch described as “a seriously commercially viable option” to fossil fuel generation – will fall apart like a house of cards in a gust of wind.

To give credit where it is due, Holy Cross has been offering solar rebates since 2004 and – as Holy Cross member services and marketing administrator Steve Casey notes – achieved a position as a significant driver of solar power in the western part of the state.

Now, says Casey, the utility’s role is evolving, from last year’s high (which saw Holy Cross burning through its rebate budget before the year was half over) to this year’s current allocation of $630,000 for renewable energy technology projects.

In all, the utility has funded almost $2.1 million in rebates, to 209 projects, including a small portion of solar thermal and micro-hydro ventures. Plus, there is a reserve fund that can be accessed if solar demand surges as it did last year, says Holy Cross Energy CEO Del Worley.

Given this, the board’s vote – to commit two percent of 2010 revenues, or about $2 million – to 2010 green energy ventures like solar energy seems a fair exchange. Even the reduction in the overall solar-project allocation, from $12,000 to $9,000, seems fair given the new GEO incentive and the fact that solar prices have dropped dramatically – by about 40 percent in the last year and a half, according to an August 2009 article in the New York Times.

In addition, as Casey notes, the ongoing recession and its diminution of the dollar’s value (read ‘drop in discretionary income’) has led to a significant reduction in solar rebate applications.