$3.2 Billion California Solar Initiative: Ready, Set …

Today the California Public Utilities Commission (PUC) is widely expected to approve the California Solar Initiative (CSI), which will secure USD $3.2 billion for solar energy rebates in the state for the next 11 years.

More to Come: RenewableEnergyAccess.com Editor, Jesse Broehl, is attending the vote in San Francisco and will file a report from the scene. The reaction to this major incentive has already sparked the first of many ripples in the marketplace. Publicly traded solar energy stocks posted gains yesterday in anticipation of the PUC’s decision. Energy Conversion Devices rose 8.6 percent and California-based SunPower jumped 6 percent; Evergreen Solar increased 1 percent. The scheduled vote follows a previous vote taken in December in which the PUC unanimously approved $300 million in interim funds for solar power systems installed in 2006. Today’s vote will complete the package by formalizing and providing funds for the next decade, a long-term plan that is expected to bolster the solar industry in California and beyond. Rebates beginning this year will stay at the $2.80 per watt mark and will gradually decline for the following ten years. By design, the rebates will decline by 10 percent per year through the duration of the program. The PUC rebates may also move from a capacity-based approach to a performance-based approach or some variation of the two. Details will be finalized over the coming months through stakeholder workshops. The CSI plan effectively supplants two of the critical features that were present in the ill-fated “Million Solar Roofs Initiative” or SB 1, which faltered twice in the California legislature. It provides the long-term rebate structure, which is important to spur solar equipment manufacturers to increase production, and it provides funds totaling $3.2 billion for the plan ($2.8 billion from the CPUC and $400 million from the California Energy Commission). The CSI plan does not include a mandate that new homes in California include solar energy, nor does it include any licensing changes to who is eligible to install solar projects in the state. It also does not require that solar installation work be done as so-called “prevailing wages,” essentially union wages. All three items exposed and exacerbated deep opposition between the majority of the solar industry and certain union interests that backed some of the proposals. The PUC policy is a top-down approach and will be passed independently of the legislature — a major reason why its passage is considerably more secure than SB1, the previous legislative effort. Industry experts predict the CSI will secure a stable solar market in California for the next 11 years that will lower the overall price of photovoltaics. The plan would be the largest solar energy policy ever enacted in the U.S. and the second largest in the world, behind Germany’s renowned rebates.
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