CALIFORNIA SHOWS BUILDING SUN CAN BE DONE

Report issued on success of California's solar program
Tracy Seipel, July 1, 2009 (San Jose Mercury News)

SUMMARY
One part of California’s $3.3 billion ratepayer-funded January 2007 undertaking to install 3,000 megawatts of new solar energy capacity over 10 years is the California Public Utilities Commission’s (CPUC) California Solar Initiative (CSI) Program. The $2.2 billion CSI, the biggest solar program in the U.S., aims to build 1,940 megawatts of solar energy capacity by the end of 2016.

The California Public Utilities Commission’s California Solar Initiative Annual Program Assessment, the first annual evaluation of the program, reports the components of the state’s landmark solar initiative are all launched, the program has moved demand for solar energy to record levels and the program is making steady progress toward its goals.

The report covers CSI only and not the California Energy Commission (CEC)-administered new homes program or the publicly-owned utilities’ solar investments.

One thing up front: Yes, California has the sun. The results of its initiative so far show what can be done if a state has a great resource and a serious commitment to put it to work. That resource does not have to be sun. It could be wind or water or geothermal or biomass. That's the variable in the equation. The constants in the equation are commitment and hard work.

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The California solar market has grown rapidly since CSI kicked off. Both yearly new solar installations and cumulative installed capacity are moving toward CSI’s targets (defined in California Senate Bill (SB) 1, the establishing legislation).

4 Key highlights of the CPUC report:
(1) California now has 515+ megawatts of installed solar photovoltaic (PV) capacity at ~50,000 utility customer sites, 226 megawatts installed under the CSI Program. (Non-CSI Program solar PV capacity was installed under the CEC, utility and prior solar programs.)
(2) New installed solar capacity in California nearly doubled in 2008 over 2007 (from 81 megawatts to 156 megawatts), a marked increase from the 30-to-40% yearly growth rate before CSI.
(3) CSI could generate a similar level of new installed capacity in 2009, despite the economic downturn. 78 megawatts of new capacity were installed through May.
(4) The solar market is growing outside CSI as well: (a) Solar PV and Concentrating solar power plants are approved and preparing; (b) CPUC recently approved a Southern California Edison (SCE) 500 megawatt distributed wholesale solar PV project for existing rooftops. (c) Solar adequate to meet the state’s Renewable Electricity Standard (RES) is in the works.

As a result of federal and state tax credits and despite the dreadful downturn in the larger economy, California’s new and cumulative installed capacities are at record levels following consecutive record-setting years in 2007 and 2008. California businesses and homes are on track to install as much as 156 megawatts of new solar energy generating capacity in 2009. There are 22,000+ CSI solar applications for pending and installed systems that will eventually account for 373 megawatts of installed capacity. 1,444 new solar applications were filed in May 2009, the most ever for a single month.

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COMMENTARY
Despite CPUC’s impressive record of achievement and the obvious way the intiative has driven the growth of solar energy in the state, CSI has critics. The main complaint – as has been the case with New Energy incentives around the world – is that non-New Energy users (and in California that's primarily nonsolar users) who are customers of the utilities that fund the incentive programs are essentially paying for something they do not get.

This criticism of the program is not factual. First, while utility ratepayers are subsidizing solar systems they do not own, they are getting an overall power system that does not generate as high a level of greenhouse gas emissions (GhGs). Also, whenever the owners of the grid-connected solar systems are generating more energy than they are consuming, those electrons flow back into the transmission system and become a fraction (albeit at present a very tiny fraction) of the electricity all ratepayers consume.

To put it bluntly, by subsidizing New Energy ratepayers pay for cleaning up their own spew, thereby making their own and their children's world a little healthier place to live. So the answer to the "what's in it for me?" crowd is "you're helping to clean up your own mess, why should i be the one who cleans up after you?"

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More about California’s record solar energy capacity growth under CSI:
(1) Most of the pending applications are for residential systems, although non-residential systems ((commercial, governmental and non-profit instititution buildings) account for more megawatts because they tend to be bigger than residential systems.
(2) CSI has installed 226 megawatts of new capacity, 13% of its 10-year goal, and has another 147 megawatts, 8% more of the goal, pending. PG&E is farthest along toward reaching its residential and non-residential targets.
(3) CSI Program data shows the average cost of solar PV systems tracking slightly downward: In 2008, average residential and small commercial systems were $9.41/watt, down from $9.84/watt in 2007. Average large commercial systems were $8.14/watt, down from $8.41/watt in 2007.
(4) During 2008, CSI-installed solar systems had a "peak-hour capacity factor" of 0.75, meaning that 75% of all installed solar capacity was performing at the peak hour. CPUC intends to expand its gathering and assessing of this kind of performance tracking data going forward.

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(5) As part of CSI’s goal to create a self-sustaining solar industry, the Program has trained 5,800+ solar industry professionals, as of June 2009. As a result, Program Administrators PG&E, SCE, and the California Center for Sustainable Energy have made considerable progress at decreasing application processing time.
(6) CSI’s financial incentives are designed to:
(a) - reward higher performing systems. In terms of rewards: CPUC’s program has authorized $544 million in incentives for installed projects which have total system costs of over $1.967 billion.
(b) - decline as program demand grows. In terms of incentives declining and demand growing: Between 2007 (year 1) and 2008 (year 2), the rate of incentive decline varied but ranged between 9% and 22% and averaged 15%, better than the average rate of decline of comparable projects. The solar market continues to generate new demand and to install new capacity despite the declining CSI incentives.
(7) CPUC’s CSI Program Evaluation Plan will continue to assess the program throughout its 10-year lifetime. A preliminary impacts report and other assessments are expected later in 2009 and 2010.

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CPUC has been equally successful at getting other components of the CSI program going:
(1) The Single-family Affordable Solar Homes (SASH), adopted by the CPUC in November 2007, was launched in December 2008. SASH rules were published in May 2009 and the program already has 15 applications. More are expected.
(2) The Multi-family Affordable Solar Housing (MASH) was adopted by the CPUC in October 2008, and began accepting applications in February 2009. It had 23 applications as of May 2009. With MASH, CPUC authorized “Virtual Net Metering (VNM)” on a pilot basis. VNM allows MASH program participants to install a single solar system to supply electricity to common and tenant areas of a low income multifamily residence and allocates solar credits to the utility bills of both building and tenant accounts.
(3) The Solar Water Heating Pilot Program (SWHPP) began in July 2007, and has had 211 applications for solar hot water systems in the San Diego region. CPUC is reviewing the results of the pilot program and considering a $250 million statewide SWH subsidy program to displace natural gas water heaters.
(4) The Research, Development, Demonstration and Deployment (RD&D) Program was adopted by the CPUC in September 2007. It just got its Administrator and released the first grant solicitation for PV grid integration in June 2009.

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The CPUC report concludes with 3 recommended modifications of the CSI program:
(1) Consider expanding the CSI Program beyond the 3 major investor-owned electric utilities (PG&E, SCE and SDG&E) to CPUC-regulated small and multijurisdictional investor-owned utilities.
(2) Consider raising the net metering cap to bring in more customers.
(3) Consider expanding the low income housing eligibility requirements to increase the households participating in the SASH Program.

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QUOTES
- Molly Sterkel, CSI supervisor, report project manager: "CSI is a bright spot that shows how government support for renewable energy is working…[Even in a weak economy] customers are deciding to go solar in record numbers, and that's amazing."
- Governor Arnold Schwarzenegger: "The results of today's report demonstrate what I pictured for this program five years ago…My vision of powering California homes and businesses with the sun is creating green jobs, lowering energy costs for thousands of Californians and reducing greenhouse gas emissions."

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- Adam Browning, executive director/co-founder, Vote Solar Initiative: "You often hear about the programs that fail…Here is a program that is literally doing what it was advertised to do. That's a good story."
- Mindy Spatt, communications director, The Utility Reform Network: "The good news, of course, is that we're getting more solar in California…The bad news is that the benefits may not be flowing equally for all the ratepayers who are funding the program."
- Strekel: "When customers decide to go solar, they help avoid the need for new power plants, which benefits all customers, not just those who have gone solar."