California Passes Pivotal Solar Energy Bill

In a move sure to bring certainty and continued growth to the California solar energy industry, outgoing Governor Gray Davis signed legislation last Sunday that will extend the state’s Self-Generation Incentive Program through the end of 2007. The program has been critical to the growth of solar power in the state, and was set to expire at the end of 2004.

Sacramento, California – October 17, 2003 [] Bi-partisan state legislators united weeks earlier to pass the legislation, Assembly Bill 1685, authored by Assembly Member Mark Leno (D-San Francisco) that allocates approximately US$500 million through 2007 for businesses and local governments to install distributed electricity generation. Over the past two years, 70 percent of these funds have funded solar photovoltaic (PV) systems. PV is the fastest growing energy source in California, increasing 65 percent per year since 1995. “California’s investment in PV will provide: clean electricity, jobs, sales tax revenues, peak demand reduction, reduced reliance on natural gas, increased price stability in electric and gas rates, and grid stability improvements. California will continue its investment and leadership in PV,” said Jan McFarland, Executive Director of the California Solar Energy Industry Association (CalSEIA). “This legislation also sets the nation’s most rigorous clean air standards for ratepayer investment in gas-fired distributed generation” said Eddy Moore, a spokesperson for the Planning and Conservation League, which sponsored the bill. “We take very seriously the need to prevent air pollution in all of our neighborhoods. Our citizens want solar power, wind, fuel cells and the clean-efficient gas. This ratepayer investment is critical to a more sustainable future,” said Moore. “We must thank Assembly member Leno for his brilliance in carrying some of the more nuanced parts of this bill through the legislature,” said McFarland. The legislation guarantees that a successful California Public Utilities Commission program, which was started in response to the energy crisis will continue through 2008. Under this program, the private sector and local governments can receive up to $4.50 per watt for installing photovoltaic systems larger than 30 kW. This program has spurred dramatic growth in California’s PV industry. The legislation also encourages the use of gas-fired generators that use energy more efficiently and pollute less. The bill sets emissions standards and requires a minimum conversion efficiency of 60 percent for any fossil-fueled distributed generation that seeks to qualify for the incentive payment. Combined heat and power projects can earn credits against the emission standards based on how much heat they recover.
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