CEC Renewables Funds Focus on Solar

By Published On: November 18, 2005

A hike in spending on photovoltaic panels is envisioned under a $700 million draft renewable energy investment plan discussed November 14 at a California Energy Commission workshop. The increase, however, would come at the expense of support for the state’s renewables portfolio standard program. The proposed change could be modified before the commission’s January 18 meeting. At that time, the CEC is expected to adopt a final plan outlining recommendations to the Legislature on how to allocate renewable energy funding for the period 2007 through 2012. At issue is how to divide up money that investor-owned utilities collect from ratepayers under the state’s Reliable Electric Service Investments Act. The law was enacted in 2002 to raise funds for renewable power. In the first five-year cycle under the act, 51.5 percent of the money is being dedicated to the renewables portfolio standard program in the form of production incentives or supplemental energy payments. In the next five-year cycle, 2007-12, the CEC would trim money for the program to 38 percent of the anticipated revenue. Funds would be shifted to the emerging renewables program, which would receive a 30.5 percent boost to support Governor Arnold Schwarzenegger’s Million Solar Roofs initiative, now under development by the California Public Utilities Commission. Many questioned the wisdom of focusing so much money on photovoltaic technology. “The emphasis on distributed generation exclusively as solar is something we think of as a mistake,” said Jane Turnbull, League of Women Voters energy consultant. Wind power producers urged that some of the money be reserved for “small wind” projects as well. “Solar is not a magic bullet, and while we haven’t heard the commission say it, the draft plan only appears to support solar,” said Pete Price, Bergey Wind Power consultant. He said small wind power projects can cost 40 to 50 percent less than photovoltaic projects on a life-cycle basis. The CEC proposal would recommend that the Legislature make other changes to renewables portfolio standard funding. The draft document, for instance, recommends establishing an auction for renewables project incentives under the investments law. The commission also is contemplating changing the way it uses its market-price referent for determining the reasonableness of subsidies for renewables projects under the act. Finally, the CEC wants increased flexibility in administering the money so it can make midcourse corrections in funding different technologies. However, at least one solar industry advocate criticized the commission’s call for flexibility, saying it shows that California is not firmly committed to photovoltaic technology. “We’re really missing out on trying to build the infrastructure needed to make this million solar program work,” said Mark Johnson, Golden Sierra Power president. The company is exploring whether to develop a solar panel production plant in California with German backing.

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