California's Million Solar Roofs Initiative

The Million Solar Roofs Initiative is one of California’s most important and ambitious public policy endeavors. Historic in both scope and scale, this initiative marks the first time a state has used a single initiative to create a mainstream market for solar power and turn a boutique, niche technology into a commonplace and affordable energy resource for average Californians.

Broad and diverse support for the initiative was driven largely by a desire for greater energy stability and energy independence, by a growing concern over global warming and the health impacts of air pollution, and by a desire for the economic benefits of solar power such as increased jobs and lower energy bills.

Since the California Energy Crisis of 2000/2001, demand for solar power increased by 2,800%.¹ Yet, despite this progress, solar power today makes up less than one half of one percent of the state’s electricity supply.² While the third largest market for solar power in the world, following Japan and Germany, solar power in California remains a small and highly specialized market.³

It is this very dynamic—this huge missed opportunity to tap into one of California’s most abundant natural resources—combined with pressing concerns about energy independence, environmental problems and economic growth, that drove California’s top policy makers toward establishing the Million Solar Roofs Initiative.

On January 12, 2006, the California Public Utilities Commission (PUC) approved the California Solar Initiative, authorizing the state to invest $3.2 billion in small-scale solar electric power systems over eleven years and establishing the statewide goal of building a million solar electric roofs, or 3,000 megawatts (MW) of solar electric power. The amount of money committed and the scope of this new program is by far the largest solar investment of any state in the nation, and an investment to rivals that of any nation in the world today.

Six months later, on August 21, 2006, Gov. Arnold Schwarzenegger signed the Million Solar Roofs Bill (SB 1) into law establishing much-needed policies that complement the California Solar Initiative and that the PUC had no authority to establish on their own. ⁴ This law, authored by state senator Kevin Murray (D-LA), further enables California to achieve the goals of building a million solar roofs in ten years and of making solar power a mainstream energy resource over the coming decade.

Together, these two complementary decisions put in place a multi-faceted state-wide solar power program designed to cut the cost of solar power in half and create a mainstream market for solar power within then years.

Given that California is currently home to approximately 25,000 solar homes and businesses amounting to more than 100 MW of solar power capacity, this program aims to increase California’s solar market roughly 30 fold. In so doing, the program strives to cut the cost of solar power in half by the end of the ten year program, phasing out government rebates, and making solar power affordable for average California consumers.

The chart 1 below demonstrates how California’s market growth could be help drive down the cost of solar power.1

Impact of a Sustained Solar Incentive Program on the Cost ($/W) of a Solar PV System

Read our news release. | Watch advocate Bernadette Del Chiaro discuss solar energy on CNBC.

For a more detailed analysis of this expected decline in the cost of solar power, see “Bringing Solar to Scale: California’s Opportunities to Create a Thriving, Self-Sustaining Residential Solar Market” at www.environmentcalifornia.org.

[1] Dave Algoso, Mary, Braun & Bernadette Del Chiaro, Environment California Research & Policy Center, Bringing Solar to Scale: California’s Opportunity to Create a Thriving, Self-Sustaining Residential Solar Market 12 (April 2005) available Here.

[2]< Melissa Jones et al., supra note 3, 38.

[3] Solarbuzz, Photovoltaic Industry Statistics: Countries, at http://solarbuzz.com/StatsCountries.htm (last visited Mar. 4, 2006).

[4] While SB 1 predates the California Solar Initiative, the legislature’s failure to pass it in 2005 combined with dwindling funds for solar power rebates spurred the Public Utilities Commission to take immediate action by adopting the California Solar Initiative in early 2006. After this action by the PUC, the legislature revised SB 1 so that it complimented, instead of duplicated, what was already established by the PUC. For detailed analysis and comparison of the California Solar Initiative and SB 1, see www.environmentcalifornia.org.

Primary Components of the Million Solar Roofs Initiative

The Million Solar Roofs Initiative will take full effect on January 1, 2007. Solar rebates for homeowners and businesses are available right away. The primary elements of the Initiative are:

· CONSUMER REBATES: Up to $3 billion over ten years.

· EXPANDED NET METERING: Five fold increase from 0.5% of a utility’s total load to 2.5%. Ultimately, 5% will be needed to reach million roof goal.

· NEW HOME MANDATE: Solar to become a standard option for all homebuyers by 2011.

Goals of the Million Solar Roofs Initiative

The overarching goal of California’s Million Solar Roofs Initiative is to “establish a self-sufficient solar industry in which solar energy is a viable mainstream energy option for homes and businesses in 10 years”.

To get there, the Initiative sets out to accomplish the following:

1. Install solar systems on a million rooftops, including new and existing homes, businesses, industry, farms and schools.[1]

2. Install 3,000 megawatts (MW) of solar power capacity on rooftops throughout the state. This capacity would equal approximately 3-5% of the state’s peak electricity demands. For reference, a typical coal-fired power plant is 500 MW.

3. Build half of all new homes with solar power within thirteen years. Currently, less than 5% of California’s new homes come with solar power.