California EPA Proposes $1 Billion in Solar Electric Rebates

The fate of California’s most significant solar energy bill ever could be decided within the next week. In a late breaking development, California’s Environmental Protection Agency (CalEPA) proposed a “Million Solar Homes Initiative” to achieve Governor Schwarzenegger’s campaign promise of equipping half of all new homes with solar power.

Sacramento, California – August 3, 2004 [] The initiative would achieve 50 percent of new homes going solar within 10 years, and 1 million solar homes total within 13 years, equaling a total of 2700 MW of power, which is equivalent to 36 polluting natural gas “peaker plants”, and would avoid 50 million tons of CO2. The plan provides $1 billion in rebates over 10 years – $100 million per year, which would cost ratepayers between 25 -30 cents per month and would also include a net metering increase to five percent. If the incentives are not enough, the bill would mandate solar on five percent of new homes by 2010 and 50 percent of new homes by 2020. The policy aims to reduce peak energy demand while bringing cleaner energy to the state. At the same time, it could dramatically boost the solar energy industry in California — and in fact, the nation’s entire solar energy industry. Such a major commitment from California could help create a consistent, predictable funded demand that would allow solar energy the opportunity to go mainstream and lower its costs through increased production. “This is the whole enchilada, California is the incubator that will bring solar in to the US,” said David Hochschild, Director of policy for Vote Solar, a solar energy advocacy group. “We have all this policy momentum going our way, from net metering to exit fees, things are moving the right way, we’re primed to take solar to a whole new level.” This latest proposed initiative from CalEPA is similar to the so called “Solar Homes Bill,” SB 1652, authored by State Senator Kevin Murray (D-Los Angeles) months ago, which provides solar funds only to new ones. Having passed both the state Senate and the California Assembly Housing Committee, the Murray bill would establish a minimum standard for builders to install solar photovoltaic (PV) systems on 15 percent of new single-family homes beginning in 2006, and increasing to 55 percent by 2010. Among the differences between the bills, the Murray bill is limited to new homes, while the “Million Solar Homes Initiative” provides funds for new homes and retrofits. Some solar installers fear that the Murray bill, as currently written, could draw funding solely to new home construction and dry up the retrofit business. In that respect, the newly proposed CalEPA Million Solar Homes Initiative is a much more comprehensive bill. “This proposal is strong because it combines incentives with mandates,” said Bernadette Del Chiaro, clean energy advocate for Environment California, a non-profit environmental group that is a sponsor of the similar Solar Homes Bill, (Murray). “The goal is to build more solar homes and by all measures this proposal would put us on the right path in a very bold way.” With two bills aiming for the same goal, Solar advocates may be lucky just to see one of the two move forward. If the governor chooses to put his support behind this new Million Solar Homes Initiative proposal, the Murray bill will likely be gutted. “I don’t think both bills are going to happen, If we’re lucky Governor Schwarzenegger will take the existing (Murray) solar homes bill, and replace it with the CalEPA Million Solar Homes proposal,” Hochschild said. But the real issue, Hochschild says, is that the latest Million Solar Homes initiative has not been formally adopted by the governor — throwing its fate into question. While this bill would fulfill the governor’s solar campaign promise, it hinges largely on the governor’s support. He is expected to comment within the next few days — roughly a week before the legislative deadline for the bill, next Wednesday. “Whether or not this happens depends on how big the public input is,” Hochschild said. “This is not a done deal. Other people in the administration do not think this is a priority.” Despite recent polls indicating overwhelming public support for solar, there are many forces working against such measures. Both homebuilders and the state’s major utilities are against such proposals and these forces could help sway the governor against giving it his support. “There is definite opposition, the builders, utilities will fight this,” Hochschild said. “The case we make is that this is a priority for everyone. It’s a front burner issue.” One persistent reason both builders and utilities are against such initiatives is a lingering misconception that solar energy is far more expensive than other sources. Some will point out that utilities can buy baseload wholesale power for 5 to 6 cents/kWh in today’s market. However, since the Million Solar Homes Initiative helps locate solar energy systems on customers’ roof, through the use of net-metering, customers will avoid the retail price of power which can cost those customers more than 25 cents/kWh. According to CalEPA, there will be no net cost. Although it’s coming down to the wire for action, Jan McFarland, Executive Director of the California Solar Energy Industries Association is holding out until the last minute for a more comprehensive solar plan that includes not only solar electric systems, but solar thermal and energy efficiency. “Our goal is a comprehensive plan, and I am supporting the governor’s great start,” McFarland said. “His (administration’s) new solar proposal puts California on the right path toward energy independence and environmental responsibility.” Hochschild fears it could take a groundswell of public feedback and support within the next few days to give this initiative any chance of moving ahead. “I can’t overstate the urgency of this,” Hochschild said. “To put a billion dollars down and make a commitment like that. It’s really hanging in the balance. We need people from all over the country to help.” ACT NOW — Click to share your support for the Million Solar Homes Initiative by sending a letter to Governor Schwarzenegger through a Vote Solar Action Alert.
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