Earlier this year, the Governor introduced the Million Solar Roofs
legislation (SB1) to implement program through the Legislature. The bill,
which ground to a halt amid partisan wrangling in September, would have
created a $2.5 billion program of declining incentives over ten years.
This budget level was deemed necessary by the Governor's office and the
Legislature to achieve the Million Solar Roofs goal and was calculated by
factoring in projected cost reductions in solar manufacturing over time as
the solar industry achieved economies of scale.
Now that Governor Schwarzenegger has asked the Public Utilities Commission
to implement the Million Solar Roofs program on its own, the solar budget
is being looked at closely again. In June, the CPUC issued a staff report
that called for a 10-year solar program budget ranging between $1.1 - $1.8
Billion. Just last week, however, the Governor used his radio address to
call for allocating $3 billion dollars for the Million Solar Roofs
program.
One reason for the discrepancy is that the June CPUC report was based on
the expectation of meeting only that portion of the Million Solar Roofs
target represented by Investor Owned Utilities (IOUs), which make up about
75% of the state, and excluded the budget necessary for Municipal Utility
Districts, which comprise about 25% of the state.
Now that responsibility for implementing the Million Solar Roofs program
has shifted from the Legislature to the CPUC, the full 3000 MW will need
to be installed within the IOU areas because the CPUC cannot mandate that
municipal utilities participate and legislation to achieve this faces
stiff opposition from municipal utilities. Therefore, to insure that the
Million Solar Roofs goal is achieved, the CPUC will need to allocate at
least $2.5 billion over 10 years (at least $250 million per year).
Among solar advocates and the solar industry, there is broad consensus for
at least a $2.5 billion incentive. While California currently leads the
nation in annual solar spending at approximately $150 million a year, it
is clear that to bring down the cost of solar over the long term, the
incentive budget must be increased in a meaningful way. In addition, the
10-year commitment to the program is crucial to avoid the boom-bust
subsidy cycle that has hindered the solar industry's growth to date.
Major solar manufacturers are now being asked to sign 10-year contracts to
procure silicon feedstock. Without a long term solar program or sufficient
volume, it will be more difficult for solar manufacturers to get the best
price for silicon and achieve economies of scale.
So how much would the average residential customer in California pay if
the CPUC were to create at least a $2.5 billion solar budget? Pocket
change. The average residential customer would pay less than 25
cents/month more to make a $2.5 billion solar program possible. This
amounts to about $3.25 per year, which is more than a Snickers bar and
less than a grande decaf latte. According to public opinion polls,
Californians are willing to pay even more to support a robust solar
program. In a Field Poll conducted in June, 56% of Californians said they
would be willing to pay up to 50 cents/month extra on their utility bills
to support the Million Solar Roofs program.
Critics of the Million Solar Roofs program charge that solar energy is
still too expensive to warrant such a major commitment from the state and
that California's electricity rates are already too high. But with
California importing 85% of its natural gas from out of state, it is clear
the state remains far too vulnerable to price fossil fuel price volatility
(the 2001 energy crisis cost California about $40 billion). Already
Californians' are bracing for natural gas bills to rise by 50-70% this
winter due to Hurricane Katrina.
A forward thinking energy policy would seek to respond to such
vulnerability by bringing down the cost of clean energy through the one
mechanism we know works -- long-term incentive programs. Viewed in this
light, the adoption of the Million Solar Roofs program by the CPUC for
$2.5 - $3 billion is a bargain.
David Hochschild is Director of Policy at the Vote Solar Initiative.
The information and views expressed in this article are those of the
author and not necessarily those of RenewableEnergyAccess.com or the
companies that advertise on its Web site and other publications.
SOME RESPONSES TO THIS ARTICLE
I am disappointed that the new PUC bill excludes the 25% of California utilities that are run by Municipalities. There are a lot of people who are supplied electricity by municipal utilities (and we don't have a choice) who will not be well served.
I have been wanting solar on my roof for years, but the LADWP has had a locked up waiting list for the same amount of time. A state bill should allow any residence in the state that wants a solar system to be able to take advantage of a rebate. As it stands now, Los Angeles residents not lucky enough to be on the 3 year old waiting list have to pay full price for a system. This has put a big damper on the quantity of residences putting up PV systems.
In sunny Southern California we have a lot of solar power, but not a whole lot of will power to get PV on house roofs.
I would support a PUC solar bill that addresses ALL utilities and not just the privately owned ones.
Only about 30% of taxpayers can itemize.
If 70% can't use "vouchers", like some utilities issue, then where is the fairness?
Is it not just a simple scoop of free energy by the same old lame people who brought you: deregulation" and Enron?
THINK about it.
I am for solar energy.
I am for sharing my overage.
I am not for giving it away to the power company.
And.. I am not for getting "rich" off of it.
But, if I want to give it away, I will connect an extension cord to my neighbor.