California Approves $2.9 Billion Solar Program

January 19, 2006 by Jeff Shepard

It's official, the California Public Utilities Commission has voted 3 to-1 to create the largest solar program of its kind in any state in the U.S. The ten-year California Solar Initiative will provide US$2.9 billion to accelerate the transition to clean energy and to reduce the consumer costs of solar electricity. The goal is to increase the capacity of installed rooftop PV panels by 3,000 MW by 2017.

"California has long been a leader on environmentally sound approaches to the provision of energy. We adopted formalized policies on renewable power and energy efficiency in our Energy Action Plans," says PUC president Michael Peevey. "The California Solar Initiative continues that tradition with an aggressive new program to promote solar development."

The Solar Initiative includes $2.9 billion in rebates which will decline steadily over the decade, with funds coming from electric and gas distribution customers of investor owned utilities to fund installation of solar PV at the start, with solar thermal water heating and solar heating and cooling systems being added later.

The California Energy Commission will oversee a component of $350 million which will focus on builders and developers of new housing, to encourage solar installations in the residential new construction market. The PUC will oversee the majority of $2.5 billion to cover existing residential housing, as well as commercial and industrial properties.

The program sets aside 10% of program funding for low income customers and affordable housing installations. The PUC will explore the option of offering low cost financing options to those types of installations in workshops this year.

"The California Solar Initiative is the largest solar program in the country and I hope it will be a model for other states," adds commissioner Dian Grueneich. "The program will be a major source of dependable and environmentally friendly electricity, and is a major tool in the state's promise to address climate change and meet the governor's goals to reduce greenhouse gas emissions."

The California program is the second largest in the world, after Germany, and the Vote Solar group estimates the initiative will result in a net positive benefit for California of $1.2 to $18.2 billion, depending on the cost of avoided power and timeframe, and would create 39,948 to 61,458 job-years by 2026.