"It's extraordinarily important that it (AB 135) went through,
otherwise there would be nothing for solar."
- Juliette Anthony, legislative consultant for Sun Power & Geothermal Energy
Sacramento, California - August 31, 2004 [SolarAccesss.com]
In the twilight hours of last Friday's final legislative session, the California
Legislature passed a critical "stop gap" measure to keep funds flowing
to the California Energy Commission's (CEC) rebate program. At the same time,
lawmakers failed to approve a solar homes bill authored by Senator Kevin Murray
and supported by Governor Schwarzenegger, the solar industry and numerous
environmental organizations.
The "stop gap" bill, AB 135 authored by Assemblywoman Sarah Reyes
(D-Fresno), and Assemblyman John Campbell (R-Irvine), gives the CEC permission
to spend US$60 million, to be collected between 2007 and 2012, for solar system
rebates for homes and businesses in either new construction or retrofits on
existing facilities. The Commission would otherwise not have access to the money
until 2007, leaving a two year gap in rebates. After the California energy
crisis, the demand for solar power has increased ten-fold depleting funds
expected to last another two years.
"It's extraordinarily important that it (AB 135) went through, otherwise
there would be nothing for solar," said Juliette Anthony, legislative
consultant for Sun Power & Geothermal Energy, who helped throughout the
final minutes to push forward the critical legislation. "Basically what we
did was give ourselves a little breathing room."
AB 135 passed at 12:30 AM on Saturday with a strong showing of 75 votes. Only
two-thirds, or 53 votes were needed to pass the bill. The stop-gap bill's
passage however, came after the demise of SB 199, authored by Senator Kevin
Murray. SB 199 was designed to advance the highly-publicized "Million Solar
Homes" plan, a legislative proposal put forth by the Schwarzenegger
Administration less than two weeks before last Friday's closing of the
legislative session. The Administration's plan had a goal of putting a solar
photovoltaic (PV) panels on a million homes, and making solar PV more
cost-effective, through rebates of 100 million per year over the next ten years.
The bill however, was killed late in Assembly Utilities Committee over concerns
of its potential cost to ratepayers and after a weaker version of the same bill
was introduced by Senator Debra Bowen (D-Redondo Beach).
The silver lining to the "Million Solar Homes" bill's failure is that
it opens up the opportunity for improvement.
While Schwarzenegger's "Million Solar Homes" proposal (SB 199) was an
ambitious and well-meaning bill - pumping as much as a billion dollars into
solar PV over the next ten years - it could have been a stronger bill in a few
critical ways, according to Anthony. CalSEIA, and others in the solar industry
offered their strong support for the bill well into its final hours, but now see
its demise as an opportunity to work with the Governor to improve the bill in a
few crucial ways.
In its final form, the bill provided rebates to solar PV systems only up to 3 kW
in size, a relatively small system size; It offered nothing to promote increased
use of solar thermal hot water systems; and its focus was on homes alone,
leaving out businesses that would be interested in solar projects.
Currently, there are two funding structures for solar PV in California, the CEC
"Emerging Renewables" rebates that provide funding for systems up to
30 kW, then separate funds for large commercial systems above 30 kW under the
Public Utilities Commission's "Self Generation" incentive. If the
Governor's "Million Solar Homes" proposal had passed, in two years CEC
funding would have dried up for systems sized between 3 kW and 30 kW - the bulk
of the solar industry's installations in the state.
Limiting funding for systems of 3 kW or less would likely not generate the total
volume of solar PV capacity that is needed to lower rebates. The whole point of
providing rebate incentives for solar in the state is that by employing
economies of scale - large volumes of solar PV - the price for PV would
gradually turn down, eventually negating the need for rebates altogether.
"We want the Governor's plan to work, but in order for it to do so, we need
the whole industry," Anthony said. "Without the volume, the Governor's
plan is not going to succeed."
Anthony also questioned the wisdom of limiting solar PV installations to 3 kW
when so many of California's homes, particularly the news ones, are overly
large, and include wasteful and energy intensive items such as central
air-conditioning and sub-zero refrigerators. Grid-connected solar PV systems are
cited for their ability to send energy back into the electric grid when a
particular PV system is creating more energy than can be used by the building or
home on which it is installed. Small 3 kW systems would have a negligible effect
on the electric grid - particularly when installed on large, energy-intensive
homes.
The Governor's plan did include an energy efficiency measure that would double
the PV rebate if the particular home was "zero energy," not using up
more power than it generated. While that may be a strong incentive for energy
efficiency, the 3 kW cap would not offer much flexibility for homeowners to
achieve these zero energy homes.
Lastly, the solar thermal industry would have been left behind entirely. Not
only is solar thermal a major component of California's solar industry, but the
simpler technology is a very cost effective renewable energy technology.
For these reasons, Anthony felt the Governor's proposal in its final form could
have been disruptive and counterproductive to both the solar industry and the
Governor's goals of increasing solar use in the state - but still offered a good
legislative base to build upon.
"An inadequate solar bill is not the answer, we have to do it right, we
need a comprehensive bill that includes all parts of the equation," Anthony
said.
Despite the bill's shortcomings, Anthony along with CalSEIA were in support of
Schwarzenegger's "Million Solar Homes" proposal (SB 199) largely
because it would give the solar PV industry two years of CEC funding at 200
million. This would then have bought two years of time for them to push work
with Schwarzenegger's Administration to pass a more comprehensive bill.
"We tried to be team players and be cooperative to make something really
good happen," Anthony said." We felt we could work with the Governor's
office to help them understand it needed to be a comprehensive bill."
Regardless, the Governor's proposal was voted down, and now it's back to the
drawing board for CalSEIA and others who intend to pursue a comprehensive
package of legislation that accounts for the entire solar industry. The
California legislature is out of session until December, when it reconvenes for
a short period and then resumes again in 2005.
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