Article Features Michael Peevey

California Leads the Way on Solar

Michael Peevey is president of the California Public Utilities Commission.

As part of Governor Schwarzenegger’s California Solar Initiative (CSI), the state has set a goal to create 3,000 megawatts of new, solar-produced electricity by 2017 — moving the state toward a cleaner energy future and helping to lower the cost of solar photovoltaic systems for consumers. The program’s goal is to help build a self-sustaining photovoltaic market.

Most electricity-generating technologies are characterized by adverse environmental and societal consequences associated with the way they turn fuel into electricity. Fossil fuels, for example, produce emissions that contribute to poor air quality and acid rain as well as global warming. But converting solar radiation into electricity through photovoltaics has few, if any, adverse side effects. Solar energy is available in periods when California needs energy most: during times of peak energy demand on hot, sunny days.

California now offers abundant incentives to match its solar potential. One of them, SB 1 (Murray – Chapter 132, Statutes of 2006) was signed by Gov. Schwarzenegger on Aug. 21, 2006. It set the parameters for the CSI and directed the California Public Utilities Commission (CPUC), California Energy Commission (CEC) and municipal utilities to implement the program, so that:

  • The CPUC is managing a $2 billion program of solar incentives over the next decade for existing residential homes and all commercial, industrial and agricultural properties. Customers must take electric service from Pacific Gas & Electric Company, Southern California Edison or San Diego Gas and Electric Company to be eligible.
  • The CEC manages a $400 million program of incentives to encourage solar photovoltaic technology in new home construction through its New Solar Homes Partnership.
  • For municipal utilities, SB 1 requires all publicly owned utilities to provide solar incentives to all facilities in their territories beginning in January 2008.

Two Incentive Paths

The CPUC offers two forms of incentives that reward both the selection of high quality solar systems as well as their proper installation:

  1. Expected Performance-Based Buydown (EPBB): Systems of less than 100 kilowatts receive a one-time, up front incentive, up to $2.50/watt, based on expected performance, which is calculated by equipment ratings and installation factors (geographic location, tilt and shading).
  2. Performance Based Incentives (PBI): Incentives for all solar energy systems over 100 kilowatts will be paid monthly, up to 39 cents per kilowatt-hour, based on the actual energy produced for a period of five years.

For both incentives, government and nonprofit entities are offered a higher solar incentive through the CSI because they are unable to take advantage of federal tax credits.

New Solar Homes Partnership

The CEC works with builders and developers to incorporate high levels of energy efficiency and high-performing solar systems. The goal is to help create a self-sustaining solar market where homebuyers demand energy-efficient, solar homes. The New Solar Homes Partnership (NSHP) specifically targets new single-family, low-income and multi-family housing markets. The CEC implements the partnership program, in coordination with the CPUC, with the goal of placing solar energy systems on 50 percent of new homes in 13 years.

City and county governments can take advantage of upcoming NSHP solar training and materials for building code officials, inspectors and builders. For more information, visit www.gosolar .

The CSI and NSHP programs offer consumers helpful tools, including pro-gram handbooks, incentive calculators and (coming soon) online application databases. Both programs will develop 
incentives for low-income residences, which can be coordinated with local government energy efficiency incentives and housing improvement programs to help residents lower their bills.

Local leaders in California’s agricultural areas should also encourage owners of farm-based solar installations to apply to the Department of Agriculture for even more assistance from renewable energy and energy efficiency grants under the 2002 Farm Act section 9006.

California ’s CSI program is the second-largest solar incentive program in the world (in the third-biggest global solar market). A number of California cities are setting up solar task forces to recommend outreach, permitting, finance and other policy options that promote solar energy and remove barriers. Their tools, such as Marin County’s solar potential mapping, will become valuable models for other California local governments.

Another way California local governments can lead on this issue is by installing solar equipment on their own facilities, as was done at the Moscone Center in San Francisco. Although government agencies and nonprofit institutions account for less than 10 percent of California’s non-residential energy use, they took advantage of 45 per cent of California’s non-residential solar incentives in the Self Generation Incentive Program in 2006.

Opportunities for Your Government

Some California local governments are already demonstrating their leadership by promoting solar as a key local climate policy and reducing barriers to new solar installations. To demonstrate policy leadership, local agencies should consider:

  • Reducing or waiving solar permit fees. A September 2006 Sierra Club study illustrated a wide difference in the amount city government charges installers for solar permits throughout the Greater San Francisco Bay Area. They found that, of 109 municipalities, the fees for a typical residential system range from $0 to $1,074. Earlier studies of San Mateo and Santa Clara counties found similar results. When some local governments realized this disparity and barrier to solar, they either reduced or waived their fees for solar permits.
  • Speeding up or streamlining building code permits, and lowering zoning or planning fees for solar installations.
  • Educating and training planning officials, code inspectors and fire inspec tors about modern solar technology and the safety of quality installations. This helps officials more quickly re-view and pass the solar installations
  • in these necessary building reviews.
  • Incorporating solar installations for new residential construction and affordable housing into redevelopment plans via the NSHP, and for new commercial buildings via the CSI.
  • Promoting solar when providing energy assistance outreach to limited English-proficient communities in conjunction with CSI marketing and outreach plans.

Solar technology has changed dramatically over the past few years, and some solar installations are virtually unnoticeable. The 2004 California Solar Rights Act is an important means to prohibit local government and homeowner association restrictions on new solar installations that could arise from now-outdated percep tions of solar aesthetics (see “Heads Up on Solar Rights,” page 30).

Many cities and counties have local solar access laws and guidelines. For region-specific information on these and financial incentives, including tax credits, that make solar power more affordable, visit

For more information on the CSI and its solar incentives, visit or

Heads Up on Solar Rights

In 2003 and 2004, California enacted two bills designed to update and expand California’s existing Solar Rights Act. AB 1407 (Wolk – Chapter 290, Statutes of 2003) and AB 2473 (Wolk – Chapter 789, Statutes of 2004) encourage the installation of solar hot water and photovoltaic systems and ensure that cities and counties do not impose unreasonable barriers to the installation of such systems. A key provision of AB 2473 limits the scope of local regulations to those “standards and regulations necessary to ensure that the solar energy system will not have specific adverse impact on the public health and safety.” Aesthetic considerations are not acceptable criteria for denying a permit to install a solar energy system.

The League encourages city officials to ensure that their cities are in compliance with the provisions of AB 1407 and AB 2473.

This article appears in the August 2007 issue of Western City
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