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July 14, 2010

California Suspends Solar Incentive Program!

Posted by Steve Sacks under Energy, Finance, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Photovoltaic, Solar | Tags: , , , , , , , , , , |
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The California Public Utilities Commission instituted a three month suspension of rebates under the California Solar Initiative.  This Solar Initiative is the vehicle whereby the state government provides tax-funded incentives to install solar arrays.   To read the ruling, click here.

What is so unfortunate about this ruling is that the suspension is directed at non-profits and schools – the very entities that can not make up for lost incentives through tax breaks.  (The Federal government offers tax breaks for solar installations, and California offers tax incentives for solar installations under Section 73 of the California Revenue and Taxation Code, amended by AB 1451 in 2008.)  The suspension is also directed to projects that are 30kw or greater, an obvious attempt to control the cost of the program by pausing incentives to the biggest beneficiaries.

The PUC suspension also appears counter-intuitive from an ROI perspective.  Tax-funded rebates to schools are far more likely to pay for themselves because school utility bills  are also paid with tax dollars.  The school utility bills will decrease after solar arrays are operational – a direct return on tax-payer investment!

The California Solar Initiative is wildly successful, and it has always been the intention of the program to gradually reduce the allocations as the cost of installing solar systems decreases.  (Environment California has a great report and chart (albiet two years old) that shows how the projected reduction in incentives is tied to the projected reduction in the cost of installations).  This is smart tax policy, but to suspend the Solar Initiative for the entities that provide the tax-payer with the greatest ROI, just does not make sense. 

The PUC is receiving comments on the California Solar Initiative over the next three months while the suspension is in effect.  

The California PUC recently issued its Annual Program Assessment to the Legislature regarding the California Solar Initiative.  Click here for a summary and access to the full report.

The Oakland Tribune has a great article on the suspension: Click here to read that article.

 

 

April 22, 2010

Happy Earth Day! Sustainable Community Interview Special!

Posted by Steve Sacks under Carbon, Energy, Government, Green Economy, Innovators, Interview, Just Plain Cool, Law, Legislation, and Policy, Make Money, Marketing Ideas, People, Photovoltaic, Solar, Sustainable Community | Tags: , , , , , , , , , , , , |
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Geof Syphers is the Chief Sustainability Officer at Codding Enterprises, developer of Sonoma Mountain Village, a One Planet Communities development in Rohnert Park, California that aims to be close to net zero…as a village!

We’ve written about Sonoma Mountain Village (SOMO) before.  Click here to review that post. Now, as an Earth Day special, please enjoy the interview I conducted with Geof a few days ago.  Click here for the full text, or just click on the “Interviews” tab at the top of this page.

The thing that makes the interview so relevant to Earth Day is SOMO is a One Planet Community.  This means that if every community on the planet lived like the residents in SOMO, we would only use the resources available on one Earth.  As it stands now, if everyone on the planet lived like the rest of the United States, we would need multiple Earths to support our lifestyle! (Click here to take a fun, albiet non-scientific, quiz to check your sustainability footprint).

So, Geof, and the group at Codding are onto something.  Enjoy the information in the interview, and have a great Earth Day!

 

March 4, 2010

AB 510 Signed By Governor Schwarzenegger! (Part 2)

Posted by Steve Sacks under Building Operations, Building and Design, Energy, Finance, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Make Money, Marketing Ideas, Photovoltaic, Solar, Wind | Tags: , , , , , , , , , , , , , , , |
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Governor Schwarzenegger signed AB 510 on February 26, 2010 (Click here for full text of AB 510) (Click here for press release and video). We covered the basic elements of the new law in Part 1 of our coverage last week (click here for that post). Now, we turn to some other elements of the law… some of the fine print, if you will…

The law balances the interests of utilities, customer-generators, and non-participating customers. (This balance, and the fact that there is no discernable impact to the General Fund, are likely the reasons the bill passed the Senate by a nearly unanimous vote.)    In addition to lowering the proposed cap from 10% to 5%, an example of concessions to utilities is found in Section (3)(l).  That section requires that customer-generators pay the Department of Water Resources for all charges that would otherwise be imposed on the customer had they not entered the net-metering arrangement.

Another significant concession is found in Section (5)(B).  Under that section, the utilities can use the energy provided through net-metering arrangements toward the Renewable Portfolio Requirements (outlined in Public Utilities Code Section 399.15 and 387).  Under previous net-metering law, utilities were not permitted to count net-metering toward these obligations.  Now, utilities have a chance to meet the aggressive target of generating 33% of their energy from renewables by 2020.  (The utilities are far from reaching the Renewable Portfolio Requirements of 20% of energy from renewables by 2010).  If California residents and businesses continue to install solar and wind power generation, the utilities have a chance to meet the portfolio requirements, but the current 5% cap will have to rise again.

On the consumer side, there are very reasonable concerns that net-metering raises the energy bill for non-metering customers.  To assuage those concerns, the bill establishes a rate-setting commission that will set net-metering compensation rates and provide a report detailing 1) the market effects of net-metering and co-energy metering, and 2) how the authority’s rate schedule ensures consumers who don’t enter net metering arrangements pay the same for power that customer-generators pay.

AB 510 reflects a state leading the way in establishing energy independence.  It is great legislation now because it doesn’t tap into the General Fund, and it encourages private businesses (e.g. Solar City or Renewable Funding, LLC).  The law is another step forward that keeps California as a leader in United States renewable energy generation.

 

February 23, 2010

AB 510 On The Way To Governor’s Signature! (Part 1)

Posted by Steve Sacks under Building Operations, Building and Design, Energy, Finance, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Make Money, Marketing Ideas, Photovoltaic, Solar, Wind | Tags: , , , , , , , , , , , , |
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AB 510 (full text here) passed both the Senate and Assembly, and Governor Schwarzenegger says he will sign the bill into law.  The bill raises the cap set on the number of homes and businesses that can take advantage of net energy metering.  Yes, there’s a cap!  The utilities don’t want “customer-generators” producing power without limit, and the government appears concerned the customers will somehow tip the “balance of power” between customer-generators and utilities (yes, that’s an energy pun).

At its core, the bill states utilities are not required to issue permits and enter agreements with “customer-generators” (residential and commercial solar and wind power producers) beyond 5% of the utilities’ aggregate customer peak power demand.  The previous cap was 2.5%.

The legislation also addresses co-energy metering.  Co-energy metering is an arrangement between publicly owned utilities and customer-generators who produce between 10kw (50kw for wind) and 1MW.  These generators are compensated based on the time of energy use and generation.

On the other hand, standard net-metering arrangements are for customer-generators who produce 3 -10kw.  The rate at which net-metering customers are compensated is either a “time of use” model such as that with the co-energy metering producers, or a “baseline” model.

A ratemaking authority (also described in the bill) sets the rates for compensating customer-generators who have an energy surplus at the end of the year and follow the baseline model. The primary goal for the rate-making authority is to set a price that ensures non-participating customers pay the same for energy they would have otherwise paid had no net-metering been used.

To its credit, the bill allows the ratemaking authority to compensate net energy producers for the value of the electricity itself, AND the value of the renewable attributes of the electricity.  This little nod allows net energy producers to receive a bonus if the renewable attributes of the energy production add indefinite or unforeseen benefits (Cap and Trade anyone?)

Congratulations (I hope not premature) to AB 510 sponsor, Assembly Member Nancy Skinner (14th District).  The bill was proposed last year as AB 560 (click here for more of that story), but it died in committee.  We’re glad to see it is on its way to the finish line this time!

Editor’s Note: Stay tuned for Part 2 of this post that will discuss other requirements and considerations in the bill. UPDATE: Click Here For Part 2

 

October 20, 2009

Congratulations AB 920!

Posted by Steve Sacks under Energy, Government, Incentives and Rebates, Law, Legislation, and Policy, Photovoltaic, Wind | Tags: , , , , , , , , , , |
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AB 920 was signed into law last week.  The law requires that utilities pay for energy they receive through net metering.  We have followed AB 920 (previously AB 1920) here at the CGBB since we posted our first articles nearly a year ago.  AB 920 is the common-sense approach to net metering.  

Net metering is an arrangement whereby utilities purchase power from consumers who generate power from solar arrays or small wind turbines.   Previously, utilities would provide credits against a utility bill.  Starting in 2011, utilities will be forced to pay power-producers wholesale rates for the power (if a credit remains at the end of the calendar year).   Cash compensation to the original power producer makes sense because the utility makes money by selling that same power to end users.  

AB 920 is a great step, but California needs to travel light years before we realize the “million solar roofs” idea.  At the very least, California needs to abandon the limits on the sizes of residential power production.  Currently, to be eligible for net metering, residences must limit the size of their solar array or wind turbine.  PG&E and other utilities argue that larger arrays and turbines will result in higher electricity rates for those not participating in net metering.  This argument can not be summarily dismissed.  There are legitimate concerns about reliability from residential power producers.  However, utility concerns can be addressed in future legislation (such as infrastructure service fees or production guarantees for net meter users over a certain size).   I appreciate that ideas such as this were left out of AB 920 in order to get it passed, but by no means does this mean the work is done.

Also, the net metering program has an overall cap, and after the cap is met residential power producers are not compensated for their power produced.  AB 560, proposed by Assemblymember Nancy Skinner, representing the 14th District, would have raised the cap for net metering power available for purchase from 2.5% of peak power to 5% of peak power.  PG&E supported that bill, but it died in committee .  For an article on some of the issue with the bill, click here.

AB 920 represents a positive step for residential solar and wind power in California, but we have miles to go before we sleep.