The California Solar Initiative is saving money for relatively well-to-do residents who put photovoltaic systems on their homes, but overall the program costs ratepayers more than it benefits them. In spite of that, the program is transforming the solar market by helping to bring the cost of the technology within reach of more Californians and putting solar companies on a sustainable footing. Those are the key conclusions of a cost-benefit study that the consulting firm E3 presented to the California Public Utilities Commission August 4. The study comes as the commission is considering mid-course corrections in the program to stretch its dwindling funds (see story above). \u201cIf it were cost-effective, we wouldn\u2019t have a market transformation system,\u201d said E3 partner Snuller Price. He compared the program, which provides incentives from ratepayer money to businesses, government agencies, and residents who install rooftop solar systems, to the state\u2019s energy efficiency program. It also looks negative, he said, in terms of cost-benefit analysis. The study found that solar saves money for the residential customers who install systems. Yet, for each 15 cents or so per kWh they save, ratepayers in general pay almost 35 cents. For the most part, those customers live in large homes and are wealthier than most utility ratepayers, Price added. On the other hand, the study found that even with the subsidies, solar systems rarely save businesses money. Looking at the larger picture, E3 found that the program does not payoff in terms of lowering the cost of operating the overall power system and cannot be expected to do so even by the time it ends in 2016, when the benefit-cost ratio will be just 0.85. (A break-even ratio is 1.0 and anything greater than that would mean the program\u2019s benefits outweigh its costs.) Likewise, even when taking into account benefits such as reducing pollution and greenhouse gas emissions, the program by 2016 still is projected to cost more than the total societal benefits it delivers with a cost-benefit ratio of 0.91. Yet, Price said that the solar study shows that if the cost of systems continues to fall, as it has since the program\u2019s inception in 2006, the California Solar Initiative should hit its overall capacity target of 1,750 MW for investor-owned utility territory. One thing that would help clinch the goal, he said, is for the state to institute a community solar program in which large systems could be installed in neighborhoods funded by multiple ratepayers, including apartment and condominium dwellers who cannot alone install rooftop solar panels. Price predicted this would help lower the cost of the program to achieve its target.