CEC Suspends Renewables Incentive Program

By Published On: March 18, 2011

Over the objections of a handful of energy company representatives who were present, the California Energy Commission this week approved the temporary suspension of its rebate program for renewable energy projects. The commission’s Emerging Renewables Program, or ERC, provides rebates and production incentives to consumers who buy and install renewable energy technologies, specifically small wind systems and fuel cells, for on-site generation. The commission March 17 voted unanimously to suspend the program, retroactive to March 4, after the staff said it needs to be fine-tuned to address requirement deficiencies. The program isn’t intended to fully cover the entire cost of a renewable system. But, commission staff says that over the last several weeks, it’s seen a significant increase in applications for small wind energy systems where the applicant is requesting rebate amounts close to or equal to the total installed cost of the system. “We suddenly hit the threshold of financing 100 percent of the systems, which although altruistically is a good thing to do, it’s not the intent of the programs that provide a form of subsidies,” commissioner Jim Boyd said. The Energy Cmmission’s position is that if consumers’ own economic interest in the systems is eliminated, the consumer, retailer and installation contractor might have no interest in verifying that wind installation sites have adequate resources to accommodate energy systems and generate enough electricity to offset consumers’ electrical load. “One of the issues we discovered--much to the chagrin of this commission and the governor--was that people were putting up wind machines … that actually didn’t function particularly well,” commission president Bob Weisenmiller said. “Coming out of that, I think we’ve all learned our lesson that as we do incentives, we have to make sure the money’s wisely spent,” he said. Representatives from a handful of renewable energy companies testified during the meeting that the suspension would hurt their businesses. Solar companies in particular said the suspension was unfair to them. But ultimately, the commission agreed with a recommendation issued March 4 by its renewables committee and voted 5-0 for the suspension. The program’s hiatus is indefinite, but Tony Goncalves, CEC renewable energy office manager, says it could take 60 to 120 days to review the guidelines and make any necessary changes. Applications that were already filed by the March 4 cutoff still will be processed, Goncalves said.

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