BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2460 (Irwin) - Solar thermal systems
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|Version: June 14, 2016 |Policy Vote: E., U., & C. 6 - 3 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: August 1, 2016 |Consultant: Narisha Bonakdar |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2460 extends the California Solar Initiative thermal
rebate program (Program) by five years and establishes a program
funding cap of $250 million.
Fiscal
Impact:
$159,000 (Public Utilities Commission Utilities Reimbursement
Account) to the California Public Utilities Commission (CPUC)
to implement the revised and continued program.
Up to $250 million (ratepayer funds) to fund the program.
Background:
Existing law establishes the California Solar Initiative (CSI)
to incentivize the installation of solar photovoltaic and solar
thermal systems for customers of the state's investor-owned
utilities and publicly owned utilities. It also requires the
CPUC to implement a program funded by $250 million in ratepayer
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surcharges to promote the installation of 200,000 solar water
heating systems by 2017, if it determines that it is cost
effective.
Solar Thermal Systems. Solar thermal systems are systems used
to collect solar energy to generate thermal energy or electrical
energy for use in industry, and in the residential and
commercial sectors. Solar thermal systems differ from solar
photovoltaic systems, which generate electricity rather than
heat. Thermal energy is used to heat water or other fluids, and
can also power solar cooling systems.
The CSI Thermal Rebate Program. The Program was created by
legislation in 2007 to reduce the use of natural gas in meeting
heating demand in buildings. The program, administered by
investor-owned utilities (IOUs) under the supervision of the
CPUC, provides rebates to utility customers who install solar
thermal systems to replace water-heating systems powered by
electricity or natural gas. The CPUC did not begin
implementation of the program until 2010 and promoted solar
water heating through direct financial incentives to retail
customers, training for installers and building inspectors, and
a statewide marketing campaign.
Goal of 200,000 Solar Water Heating Systems Fell Short. In
2014, the State Auditor issued a report on California
Alternative Energy and Energy Efficiency Initiatives where it
stated that the Program will not install enough solar water
heating systems to meet its goal by the time the program ends in
2017. The State Auditor recommended the Legislature consider
whether it wants to continue authorizing the collection of
ratepayers' money to fund the program.
Proposed Law:
This bill:
1)Extends the Program by five years, from January 1, 2017 to
July 31, 2022.
2)Establishes maximum funding for the program at $250,000,000.
3)Reserves 50 percent of the total program budget for
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installation of solar thermal systems in low-income
residential housing or in buildings in disadvantaged
communities, as defined by Health and Safety Code §39711.
4)Authorizes the CPUC to revise the percentage cited in the
preceding bullet if the budget for other types of customers
becomes depleted.
5)Requires the governing body of each publicly owned utility
providing gas service to adopt, implement, and finance a solar
thermal system incentive program.
6)Directs the CPUC, every two years, to consider revisions to
the rebate amount, taking into account the cost of installing
solar thermal systems and the price of natural gas to end-use
customers.
Staff
Comments: This bill specifies a $250 million total program
budget through the duration of the Program (through 2022). This
approach-capping the program budget-differs from the approach of
past legislation. The previous approach directed the CPUC to
establish the surcharge on IOU natural gas customers at an
amount necessary to achieve the statutorily goal of installing
200,000 solar water heating systems in California by 2017.
The amount in this bill, however, corresponds with the original
program budget identified by CPUC needed to meet the statutory
program goals. Because the program has already paid out $40
million, this $250,000 cap represents an increase over the
initial program budget.
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