Solar power angling for a cool image [Legislation - SB1 - Sacramento 2005.4.21]
source: Kevin Yamamura Sacramento Bee 2005.4.21

Would you like solar panels to go along with those granite countertops and hardwood floors?

That's an option Gov. Arnold Schwarzenegger and two state lawmakers want future buyers of new homes to have under their "Million Solar Roofs Initiative."

Even in sunny California -- and even after blackouts in 2000 and 2001 spurred interest in alternative energy -- solar power generated only 0.3 percent of the state's electricity in 2003, according to the California Energy Commission. High startup costs remain a barrier for homeowners, as does a limited supply of state rebates that often make waiting lists necessary.

But state officials hope more rebates and the incorporation of solar into new homes will make the technology more mainstream.

"The Toyota Prius (hybrid) has become a very cool car," said Sen. John Campbell, R-Irvine, co-author of Schwarzenegger's solar power bill, SB 1, and a companion tax-credit measure, SB 1017. "We're hoping that solar will become the same thing. You'll save a lot of money, and it's an advanced technology that's working. And that it'll get a 'cool factor.' "

The Republican governor's measure would require home builders to offer solar panels in any new development that includes at least 50 homes, starting in 2010. The bill also would extend solar rebates for homes and businesses through 2016, though rebate amounts would decrease each year under an assumption that the industry's growth would lead to cheaper solar costs. Those rebates would apply to investor-owned utilities, but the bill also would require municipal utilities such as SMUD to offer a solar program.

Sen. Kevin Murray, D-Culver City, a co-author of SB 1, said he believes the benefits of solar are not limited to lower electricity bills for homeowners. He said all Californians can benefit from cleaner air and a more stable power grid, an issue raised during the blackouts in 2001.

"Energy, until a few years ago, was a sleeping giant," Murray said. "The average person didn't think about it. They flipped a switch and all of their things started working."

His solar bill last year failed because of opposition from home builders, who objected to a more stringent plan to require that a percentage of new homes include solar panels. This year the legislation would ask home builders only to offer solar panels.

One of solar's biggest hurdles is its initial cost, which can range from $12,000 to $20,000 before rebates for a typical home system. Even solar's proponents in the Capitol concede that the technology relies on public subsidies that enable customers to recoup installation costs over the life of the panels.

That means homeowners often run through a series of calculations before deciding to install solar panels. They want to know whether the rebates plus savings in electrical bills will offset the costs.

Lydia Lee and her husband, Joshua, decided that to be the case for their four-bedroom, three-bath home in Davis. The 42-year-old mother of two recently waited inside her darkened home as installers from Sacramento-based Team Solar began setting up her new system.

She said her interest was piqued when she toured solar homes several years ago. When the Lees heard last summer that state-funded rebates were in short supply, they sought a system before the money ran out.

"We usually try to conserve energy and we only turn on our heat or air conditioning during the coldest or hottest months," said Lydia Lee. "We think energy prices might keep going up."

The cornerstone of the Schwarzenegger plan is a requirement that home builders offer solar panels on all new homes in larger developments. Solar proponents believe that building the technology -- and costs -- into new homes is easier than retrofitting older homes.

"From a homeowner's perspective, installing solar when you're building changes the economics dramatically," said Bernadette del Chiaro of Environment California. "You basically roll your costs into a mortgage."

Rebates for solar programs come from small renewable-energy surcharges paid by all customers. Like rates in general, those surcharges increase based on use.

The Utility Reform Network, a consumer advocacy group, opposes SB 1 because it fears the measure will result in higher surcharges for all power customers. TURN staff attorney Matt Freedman said he is particularly concerned that customers who use the least amount of energy -- apartment dwellers and the poor -- will subsidize the program despite the likelihood they will never purchase solar panels.

"The bill is valid on its merits, but it's also the camel's nose under the tent and the first major effort to undo the ratepayer protections enacted in 2001," Freedman said.

For the same reasons, PG&E is offering support only if the bill is amended in several ways, including a $100 million cap on its annual spending on solar rebates. PG&E spokesman Paul Moreno said the utility is concerned that unlimited rebates would force excessive rate increases.

One local builder already has incorporated solar into two projects in Roseville and Sacramento. Premier, a small, Roseville-based builder, opened a 95-home development in 2004 off Bradshaw Road that includes energy-efficient appliances, extra insulation and other conservation features.

In that project, Premier relied on relatively generous rebates offered by the Sacramento Municipal Utility District to incorporate solar into each house. The homes are more expensive to account for solar costs, but their efficiency features result in dramatically reduced energy bills, said John Ralston, Premier's vice president for sales and marketing.

SMUD has nearly 900 residential customers with solar panels, said Jon Bertolino, the utility's superintendent of renewable generation assets. Bertolino said customers in energy efficient homes similar to the Premier model can save up to 70 percent on their electricity bills. On a standard 2-kilowatt system, SMUD offers a $7,000 rebate.

Del Chiaro said California is leading the way in the United States for solar but lags behind countries such as Germany and Japan, which have more aggressive rebate programs.

"We've been growing steadily, but only by a small, small fraction of what other countries have invested," she said. "The tiny, not-so-sunny country of Japan is doing it, and yet we have some of the best solar opportunities in the world."