For a few years, we knew this was coming. The economic recession reduced revenue brought in by state governments. States are now facing huge budget deficits. And, unfortunately, renewable energy programs are on the chopping block as states try to cut costs.

Take for example the Renewable Energy Incentive Program created by Washington, D.C. Residents were promised hundreds of thousands of dollars in reimbursements for installing solar panels. The D.C. Department of the Environment is now reneging on these promises:

“Dozens of District residents who installed solar panels on their homes under a government grant program promoting renewable energy have been told they will not be reimbursed thousands of dollars as promised because the funds were diverted to help close a citywide budget gap.

In all, the city has reneged on a commitment of about $700,000 to 51 residents, according to the D.C. Department of the Environment. The agency has pledged to try to find money in next year’s budget, its director, Christophe Tulou, said.”

One homeowner highlighted in the Washington Post article will lose $12,000 that was promised through this program.

I have advised renewable energy companies about the risks related to government incentives and rebates. Here are three recommendations to protect your company in the event that a government agency reneges on its promises:

1. Do not include government rebates, incentives or reimbursements in your contract documents.
2. Explicitly disclaim responsibility for rebates, incentives or reimbursements.
2. Train your sales staff to not make promises related to government programs.

At any point, especially in the current economy, state and local programs can run out of money. Builders and consumers alike must be aware of the risks that run with these programs.