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http://www.environmentcalifornia.org...-solar-program
"It's Official!" CPUC Approves $3.2 Billion Solar Program
Landmark Vote Creates
Nation’s Largest Solar Roofs Program and Puts California on Pace to Become a World Solar Power Leader
SAN FRANCISCO—Today, the California Public Utilities Commission (CPUC) approved the California Solar Initiative (CSI), committing a combined $3.2 billion in incentive funds to drive consumers toward solar power over the next 11 years. The CSI, modeled largely on the Million Solar Roofs bill that ran aground in the state Legislature last year, is designed to provide rebates for homeowners, businesses, farmers and government projects investing in rooftop solar. It aims to install 3,000 MW of solar power regaining California’s position as a world leader in solar energy.
“Its official!” celebrated Bernadette Del Chiaro, clean energy advocate for Environment California, a nonprofit, nonpartisan environmental advocacy group that has been pushing for a large-scale solar incentive program for several years. “It is about time California got serious about tapping into our abundant, homegrown solar power resources.”
Today’s decision adds $2.5 billion in rebate funds, available from 2007 through 2016, to the $300 million made available in December for 2006 and the $400 million already earmarked for solar power in the Public Goods Fund. The combined $3.2 billion program is the largest investment in solar power in the country. By increasing demand 30-fold, the CSI promises to cut the cost of solar by 50% within 10 years, creating a mainstream, self-sufficient solar market.
“With the high energy bills shocking California ratepayers this month, there is no better time to jump start an affordable solar power market bringing true independence from our over-reliance on natural gas,” praised Del Chiaro. “Today’s vote promises to ultimately eclipse dirty and expensive fossil fuels with clean and efficient solar power.”
Leaders of the solar industry also had words of praise for today’s vote. “The CPUC should be congratulated in creating a decade-long initiative that will drive the U.S. solar industry to invest in technological innovation and scale up manufacturing,” said Rhone Resch, president of the national Solar Energy Industries Association. “California will be a leader in the next great high-tech growth industry – solar energy.”
The California Solar Initiative establishes a 2006 rebate at $2.80 per watt and requires an annual decline by approximately 10%, in line with the expected reduction in the cost of solar power. The rebate program will sunset at the end of 2016, at which point it is predicted that the cost of solar will be cost-effective without a direct rebate.
The typical California home today installs a 2.5 kilowatt system. With today’s rebate level, the average $20,000 price tag for the system would be reduced by $7,000. In addition, over the next two years, homeowners can take advantage of a federal tax credit reducing the total cost by an additional $2,000. When combined with low interest loans, lowered electric bills and the ability to get a credit for excess electricity generated by the solar system, California homeowners could expect a return on their estimated $11,000 investment within the first month.
The CPUC anticipates it will fund the $3.2 billion program without raising electricity rates. Instead, the money would come from existing funds already earmarked for solar power and a small surcharge that the CPUC says can be absorbed into existing rates. According to a staff report prepared by the CPUC last summer, this $3.2 billion investment in solar could save California ratepayers an estimated $10 billion from a reduced need to build two dozen peaking power plants or to purchase expensive electricity during peak summer hours.
Other benefits of investing in solar power include cleaner air and more jobs. For every solar roof, at least one ton of global warming pollution is reduced each year. In addition, for every megawatt of solar installed, seven times more jobs are created compared with the equivalent in natural gas power plants. Environment California Research & Policy Center research estimates 15,000 new California jobs will be created from this new solar market.
The PUC program comes at the request of Governor Schwarzenegger and mirrors the bulk of the governor-backed Million Solar Roofs bill (SB 1), authored by Senator Kevin Murray (D-Los Angeles), and broadly supported by the state Legislature. The other policy elements contained in SB 1, such as net metering and making solar panels a standard option on new homes, still require legislative approval in 2006.
Major Elements of the California Solar Initiative Program:
• The complete California Solar Initiative program will invest a total of $3.2 billion over 11 years for consumer rebates. This number includes the $300 million added on December 15, 2005 and the $400 million already available through the Public Goods Fund.
• All small-scale solar technologies will be eligible: e.g. photovoltaics, thermal, hot water, etc.
• The rebate will start at $2.80/watt and declines 10% per year. It will be phased out at the end of 2016.
• Low-income ratepayers up to 260% of federal poverty levels will not pay into the fund and 10% of the fund will be set aside specifically for low-income and affordable housing projects.
• The program will be administered by the CPUC with administration of a rebate program specifically earmarked for new construction run by the California Energy Commission.
• The fund will be created from a small surcharge on electric and gas customers within PG&E, Edison, San Diego Gas & Electric and So. Cal. Gas Company territories. The PUC estimates the surcharge will be absorbed into existing rates without any discernible impact to energy bills.