Solar Legislation extending major funding heads to Governor [AB 1685]

source: solar access 2003.9.16

One of the most pivotal bills for solar energy in California has recently passed the state's assembly and is headed to the governor's desk.

Assembly Bill AB 1685, authored by Assembly member Mark Leno (D-San Francisco), would extend the CPUC Self-Generation program until December 31, 2008. According to the California Solar Energy Industries Association (CALSEIA), the program provides the largest source of renewable energy project funding in the nation - US$125 million per year for solar, wind, fuel cell, and cogeneration projects. About 70 percent of program funds have funded large solar projects within the past two years, increasing large solar installations in California by 1000 percent.

Leno's legislation, which passed by a vote of 52 to 26, would ensure the continued existence of one of California's two major programs that boost solar photovoltaic (PV) installations and investments. While the California Energy Commission's (CEC) Emerging Renewables Program provides rebates for smaller systems more likely to be found on private homes, the CPUC Self-Gen program provides generous rebates on solar photovoltaic (PV) systems over 30 kW.

The CPUC rebates however were set to expire at the end of 2004, which could create insecurity in an industry so, entrenched in California's energy landscape.

The rebates fund financial incentives to customers based upon the technology type and size of generation installed on the customer's side of the utility meter. Those who have installed PV solar with a generation capacity greater than 30 kW and less than 1.5 MW, qualify for an incentive level that provides the highest level of financial incentive available in the program. The incentive is provided to the customer as a one-time payment, calculated in one of two methods. Currently, the program pays customers who install eligible solar generation the lesser amount calculated from either of the two following formulas:

- The unit's maximum generating capacity (up to 1 MW) multiplied by the program's per watt incentive rate, currently set at $4.50 per watt.

- The unit's total eligible project costs multiplied by the program's incentive percentage, currently set at 50 percent.

Either way, it's a sizeable amount. For example, the owner of a 30 kW solar PV system that might cost 180,000 to install, would recoup $90,000, said CALSEIA's technical director Les Nelson.

While critics sometimes question the validity of subsidizing solar PV, Nelson said it's the least that can be done for solar to compete with the standard energy mix.

"Solar needs incentives," Nelson said. "We're not going to change the world, we're not going to make big oil and gas go away, but we don't have people working in the White House at leveling the playing field. Solar is making inroads but it needs significant support."

The bill was sponsored by Planning Conservation League and CalSeia