Getting the Million Solar Roofs Bill Right

Later this month the California Legislature will decide the fate of the Million Solar Roofs Initiative (SB1). Originally proposed by Governor Arnold Schwarzenegger last year and supported by legislators from both parties along with a broad range of solar industry, environmental and public interest groups, SB 1 would create ten years of incentives for solar energy to help Californians install solar panels on their homes and businesses. However, the goal of transforming solar energy into a truly mainstream energy source could be hindered by some amendments currently in the Million Solar Roofs bill. Without correcting these flaws in the bill, the Legislature could undermine rather than advance the solar industry it is trying to nurture to maturity.

The top five issues to be corrected in the bill are: 1) C-10 license requirement An amendment accepted earlier this summer would limit solar installations to C-10 electrical license holders only while the vast majority of solar energy systems in California (about 20,000) were installed by A (engineer), B (general) and C-46 (solar) contractors. To shut out the majority of the state’s solar installers is unwise, unnecessary and would have the effect of reducing competition in the marketplace. This eligibility requirement should be removed from the bill. 2) Annual appropriations requirement Current language in SB 1 requires the Legislature to annually appropriate funding for the Million Solar Roof Initiative rather than create a long-term funding stream. This could open the program up to a volatile political process and remove the most important benefit of the bill – creating the market certainty that will leverage major new investments from solar manufacturers to bring down costs. Not a single other renewable or energy efficiency program in California that is funded by the Public Goods Surcharge is subject to annual appropriation. This language should be corrected to provide for the full ten years of funding certainty, leaving the administration of the program budget and rebate level to the program administrators, in return for a cost cap. 3) Electric Rate Design freeze The current version of SB 1 removes the ability of the state to establish any new rate designs for Million Solar Roofs program customers. This is ill-considered because it would remove one of the most powerful policy instruments available for promoting solar energy and energy efficiency. Designing electricity rates schedules in ways that encourage solar energy promises to be a critical policy area in coming years and it would be a mistake to sacrifice that option today. 4) Limit Million Solar Roofs Initiative to Fund to Distributed Generation only While SB1 has always been intended to promote distributed solar energy generation, the bill’s current language leaves open the possibility that utilities could install solar systems in excess of one megawatt. This has the potential to redirect a substantial portion of incentive funds away from customers toward the utilities, which would reduce competition in the solar marketplace, hinder innovation and limit the ability of average Californians to use this fund. Central station solar power plants should be supported but not as part of the retail solar market established by SB 1. 5) Prevailing wage The overriding goal of the Million Solar Roofs program is to make solar energy affordable so that it becomes a core contributor to our growing electricity needs. While it is not in the current version of the bill, there is much discussion in the Legislature about imposing California’s prevailing wage law on solar energy systems, which would increase costs by 15% and unfairly penalize solar energy. California currently provides incentives for the installation of energy efficient air conditioners, furnaces, washing machines, ceiling fans, insulation and high performance windows and none of these installations trigger prevailing wage. The Million Solar Roofs Initiative – without the prevailing wage requirement – will create many new jobs and at attractive wages with good benefits. In the end, with the federal energy bill offering lopsided support for the fossil fuel energy resources of the past, it is more important than ever that states like California lead the way toward the clean energy technologies of the future. The California Legislature should resist the lobbyists and the utilities and vote up or down on the right version of the Million Solar Roofs bill. Getting the policy right has simply never been more important. While the world’s solar market is growing at a remarkable pace (62% growth last year), the US portion of this market is actually falling (from 12% in 2003 to 9% in 2004). If the United States is to turn this around and retake the global leadership role in solar energy, California must do some barrier-busting and get its policies right. If we do, the Million Solar Roofs bill could unlock the muscle of the sixth biggest economy in the world and be a beacon for clean energy policy for other states. About the author… David Hochschild is Director of Programs for the California-based Vote Solar Initiative. After working on the team that put together San Francisco’s solar bond, David left his job in the San Francisco Mayor’s Office in August 2001 to work on the campaign full time and has now co-founded the Vote Solar Initiative.