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 7%, 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.
