Solar plan faces key test

Gov. Arnold Schwarzenegger's vision of spending billions of dollars to put a million solar panels on California rooftops faces a key test today, when a state Assembly committee puts the measure to a vote.

The bill, SB 1, aims to place electricity-generating solar panels on 1 million California homes within a decade by heavily subsidizing installations. Even though the bill sailed through the state Senate, it must pass the Assembly Utilities and Commerce Committee today before it goes to a vote before the full Assembly. But as in past years, the measure has come under fierce criticism from private utilities, labor unions, manufacturers groups and, this time, even a leading consumer group.

Most of the concerns focus around cost, which is expected to be capped today at $2.5 billion. Though proponents say the measure will add only 55 cents a month to typical residential customers, critics say the costs will hit businesses hard.

The bill would be funded through a surcharge on utility customers' bills, estimated to be roughly 11 cents per kilowatt hour. Property owners who install solar panels would receive a rebate of roughly $4,500, according to the office of state Sen. John Campbell, R-Costa Mesa, who is co-sponsoring the bill.

Schwarzenegger's office has estimated that after the rebate the $13,000 cost of an average solar system would pay for itself within 25 years. Though versions of the bill have been before the Legislature for the past three years, Schwarzenegger has been more involved in the bill's drafting and he has been more public about his support this time around.

Energy goals

Proponents argue that the subsidies would go a long way to diversifying California's energy supply, a critical piece of the state's energy goals. It would also create incentives for businesses and consumers to invest in the state's infrastructure.

``It promises to make solar power a self-sufficient and thriving market, which means it revolutionizes the way we generate energy in California,'' said Bernadette Del Chiaro, an advocate for Environment California, a non-profit group pushing the bill.

There are an estimated 13,000 homes in California equipped with solar panels, according to Del Chiaro. Even if the bill falls short of its million homes -- some critics say it would fund only a few hundred thousand homes at most -- it would reduce reliance on the traditional power plants and create greater stability for the power grid.

The praise is far from universal.

Manufacturers, for one, contend electricity costs -- said to be among the highest in the nation -- are driving businesses out of California. They say the measure will unfairly penalize them for their normal, but heavy, use.

``They're basically foisting all the costs onto the large industrial users,'' said Gino DiCaro, communications director for the California Manufacturers and Technology Association. ``We're not opposed to solar power. But it is inappropriate to make them bear the brunt of those costs.''

The measure also would raise costs and eliminate some protections for the lowest electricity users, for whom rate hikes were restricted after the 2001 energy crisis.

These customers, who would have the least incentive to purchase a solar panel system, compose roughly 35 percent of all residential users, according to The Utility Reform Network, a leading consumer group, which opposes SB 1.

``We do not believe that lower-usage customers, who will neither buy the system nor realize economic benefits from solar's contribution, should have to experience rate increases as a result of this program,'' Freedman said.

Utilities' issues

The private utilities have various issues. PG&E contends that, as currently worded, the legislation does not specify a price cap on the amount ratepayers would have to shell out annually, said company spokesman Jon Tremayne.

An electrical workers union, which has already succeeded in restricting the types of workers who can install such panels, has been fighting to increase the wages installers would be paid.