CPUC Parallel ‘Million Solar’ Process Aired

By Published On: July 15, 2005

As the Million Solar Roofs bill moves closer to a vote in the Legislature, a companion process at the California Public Utilities Commission intended to be used to implement it came under scrutiny late last week. In initial comments on the commission’s plan to use its current distributed-generation funding process to subsidize the Million Solar program, almost every stakeholder questioned the proposed costs and savings from a recent staff report, yet all appear committed to the overall idea of promulgating 3,000 MW of solar power in the near future. The major stakeholder issues filed July 7 include the following:<ul><li><b>More specific cost-benefits:</b> Southern California Edison is asking the toughest questions on the cost of subsidies. According to Edison, the installation of 300 MW a year (to total 3,000 MW in a decade) would cost $2.6 billion, exceeding the benefits that CPUC staff calculate by $1.6 billion. If installation costs remain the same as today, Edison estimates the net cost to ratepayers at $16 billion. For the subsidies themselves, the staff report estimates a total program cost of $1.1 billion to $1.8 billion for financial support. Edison claims that over 10 years, the costs would be close to $5 billion. PG&E did not provide its own estimates but indicated that costs could be between $2.3 billion and $7.7 billion. PG&E also disputed the $1 billion in net benefits surmised by staff, instead claiming it would become a net cost of $1.8 billion.</li> <li><b>Efficiency:</b> Many noted that the installed capacity of a photovoltaic system is not necessarily what it provides in energy. Sempra utilities (San Diego Gas & Electric and SoCal Gas), Edison, and PG&E want incentives based on actual performance. The nonprofit organization Vote Solar agreed that incentives should be phased in to become performance- based. The California Solar Energy Industries Association is concerned that the current incentives go to system retailers, but under performance incentives, they would go to customers. As such, they could be spread over decades and/or be realized only in tax credits.</li> <li><b>Beyond photovoltaics:</b> Sempra, the Office of Ratepayer Advocates, solar industries, and PG&E want to include solar thermal electric and solar water heaters.</li> <li><b>Administration:</b> In the San Diego area, a separate organization?the San Diego Regional Energy Office?administers efficiency programs, but the other utilities won approval to administer their own programs after a highly contentious process at the commission. Sempra utilities, as well as the other utilities, with the support of ORA and solar industries, all want to administer subsidies for new photovoltaics through their own offices. Women’s Energy Matters took on that position, responding that current utility administration “exaggerates” benefits and, moreover, that promises of statewide coordination among utilities are overrated. The group charged, too, that utilities currently are “gaming the system.”</li> <li><b>RPS targets:</b> Sempra utilities want prorated renewables emission credits for projects in their service areas. PG&E, too, believes that the installations should count for renewables requirements, “without having to make yet another payment” for renewable energy credits.</li> <li><b>Munis:</b> The Sempra utilities and PG&E suggest requiring municipal utilities to be part of the Million Solar program.</li></ul>Despite all the questions about the total cost, one stakeholder, Pasadena-based Energy Innovations, wondered whether the subsidies would come close to attracting enough participants. At subsidies of $3.50/watt?what some consider “excessive”?Innovations noted that there were only 128 MW of projects in the commission’s current program. Innovations added that reservations in the California Energy Commission’s subsidy program aimed at residential installations are down since rebates were planned at $2.60/watt.

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