BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
- Saldana Hearing Date: June 29,
2010 A
As Amended: April 27, 2010 FISCAL B
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DESCRIPTION
Current law establishes the California Solar Initiative (CSI), a
$3.3 billion program to subsidize the installation of
photovoltaic (PV) systems for customers of the state's
investor-owned utilities (IOUs) and publicly owned utilities
(POUs).
Current law requires that the CSI solar system offset part or
all of the consumer's own electricity demand and that the system
be located on the same premises of the end-use consumer where
the consumer's own electricity demand is located.
This bill allows the solar system to be located on or adjacent
to the customer's owned, leased, or rented premises.
BACKGROUND
California Solar Initiative (CSI) - Effective in 2007, the CSI
calls for the installation of 3,000 megawatts (MW) of new,
solar-produced electricity by 2016. Targeted expenditures under
the CSI, funded by ratepayers, are $3.3 billion over ten years,
distributed among three distinct program components: IOUs,
$2.167 million/1940 MW; New Solar Homes Partnership, $400
million/360 MW; and POUs $784 million/700 MW.
California now has over 736 MW of solar PV in the IOU
territories at over 43,000 residential, commercial and
governmental sites. This includes installed generation and
pending applications. The POUs have installed 26 MW of
generation at 7,712 sites and the NHSP reports 7.8 MW of solar
PV at 3,002 sites.
All CSI programs combined, California has approximately
installed 770 MW of solar generation on the customer's side of
the meter - 27% of goal.
Net Energy Metering - Utility customers that generate power from
a wind or solar system are eligible for NEM under which the
electricity purchases of the customer are netted against the
electricity generated by the customer's own solar or wind
electric system. When the sun is shining or the wind is
blowing, the generated electricity spins the meter backward,
making it financially equivalent to using less electricity for
the customer with the same effect as the electric utility paying
the customer the full retail price for the electricity. When
the sun stops shining and the wind stops blowing, the customer
draws electricity from the grid and their meter spins forward
using the credit on the meter. In theory, depending on weather
patterns, system size and customer behavior, the customer will
have a zero energy bill at the end of a 12-month cycle.
COMMENTS
1) Author's Purpose . While many commercial properties and
some residential buildings have adequate roof space to site
a solar energy system, such is not necessarily the case for
many residential properties, particularly multi-family
residences or residences where the roof space is obstructed
from the sun. Nonetheless, ratepayers of all residences
pay into the pool of money that funds the program. It has
repeatedly been observed that, despite its numerous
benefits, the CSI may not provide an adequate opportunity
for middle and lower income Californian's to participate in
the incentive program.
In order to provide a better opportunity to participate in
the program, eligibility should be expanded to include a
solar energy system that is located on a near-site location
to the end-use consumer.
2) Basic Premise of CSI . The fundamental premise of the
CSI program is that the solar system funded with CSI funds
be sized so that the amount of electricity produced by the
system primarily offsets part or all of the customer's
electrical needs at the project site thereby displacing
electric load on the grid. In practice a solar
installation does not have to be on the customer's roof but
is required to be wired to the customer's side of the meter
to offset their electrical load. This bill will eliminate
that requirement by allowing the system to be placed
adjacent to the customer's owned, leased, or rented
premises.
The immediate result is that the reduction of peak demand
is not achieved. In the long-term the goals of zero net
energy homes will be not be achieved and, at the time when
energy storage technologies are affordable and commercially
available, the CSI generation intended to be funded on the
customer's side of the meter will not exist to take
advantage of the storage technologies which would truly
achieve the goal of zero net energy homes.
3) Ineligible for NEM . The primary benefit of the CSI
program is derived from the solar customer's eligibility
for NEM which is authorized under state law separately from
the CSI program. If the customer's solar system is not
located on the customer's side of the meter, the customer
would not be eligible for NEM.
4) Solar & the CSI Have Limitations . The CSI program will
not bring solar to all which has frustrated many policy
makers and customers. For most customers solar will not be
an option in the near future simply due to its costs.
Customers who live in high-density housing will also be
challenged due to the space required for solar
installations; for many customers the pitch of their roof
is not suitable or the home is shaded too much. Rental
customers are also not likely to benefit from solar simply
because the property owner would carry the expense while
the renter would reap the power. Agricultural customers
with centralized load can benefit but load demand at the
far reaches of their property will remain separately
metered due to the cost and size of solar installations in
remote areas of their properties. These limitations were
well known when the program was adopted. The CSI program
was not funded nor were the authorized facilities sized to
a level that will serve all customer's needs. The program
was provided with a limited amount of funding, for a
limited time, with a limit on capacity to jump-start the
solar industry and start to introduce customers to
self-generation.
The intent of the CSI program was that the industry would
be stimulated and the price of solar would come down making
the application more affordable. For high density housing
the CPUC is piloting a "virtual net metering" program as
part of its Multifamily Affordable Solar Housing program.
This pilot enables a multifamily housing owner to allocate
a solar system's benefits to tenants across multiple units.
If it is successful, the CPUC may consider making it
available to a broader range of CSI participants.
5) Ratepayer Impact . Some of the funds collected from
utility customers to fund CSI installations would be
redirected from applications on the customer's side of the
meter and not achieve the reduction in peak load sought
from the program.
6) Related Legislation . AB1947 (Fong) would permit POUs to
use CSI ratepayer funds for the installation of
utility-owned generation and count that generation toward
their CSI requirements. Status: Set for hearing in the
Senate Energy, Utilities & Communications Committee June
29, 2010.
ASSEMBLY VOTES
Assembly Utilities & Commerce 9-3
Assembly Appropriations 11-4
Assembly Floor 44-23
POSITIONS
Sponsor:
Author
Support:
California Business Properties Association
California Builders Association
Solar Alliance
Oppose:
California Public Utilities Commission (unless amended)
Pacific Gas & Electric
Southern California Edison
Kellie Smith
AB 2296 Analysis
Hearing Date: June 29, 2010