The Sacramento Municipal Utility District’s board of directors this week approved spending about $3.6 million to help finance 600 new homes with rooftop photovoltaic systems. The homes would comply with the Million Solar Roofs law, SB1, and “aim to reduce electricity bills by 60 percent through the installation of these energy efficiency measures and solar,” said board member Nancy Bui-Thompson. Under the muni’s contract with development company Elliott Homes, which was unanimously approved September 16, 600-plus “SmartSolar” houses are set to be built in five SMUD territory subdivisions between 2010 and 2012. Under the program, the muni proposes to conduct research and monitor the homes’ installed energy efficiency measures and photovoltaic systems. SMUD is expected to pay Elliott Homes $104,000 as part of the agreement this year, plus $1.2 million next year and $2.3 million in 2012. Under the SmartSolar program, SMUD residential customers can contract directly with photovoltaic contractors to buy houses with grid-connected, solar electric generating systems and receive a per watt incentive, based on expected system performance. “Elliott would bring up to 635 solar smart homes in subdivisions in Folsom and Rancho Cordova,” Bui-Thompson said. The muni’s contribution per home would be between $5,000 and $5,800. A typical residential photovoltaic system in California costs about $28,000, according to the Department of Energy. Also, the board approved a contract expanding the muni’s Russell substation. Under the contract, EPC Services is set to be paid up to about $7.5 million to expand a substation. The utility says the substation is critical to the $270 million, 128 MW Solano Phase 3 Wind Project, which was approved September 2. Additionally, the muni approved a utility plan to save on natural gas expenses by participating in a 30-year agreement to buy gas on a pay-as-you go basis at prices that are discounted from index prices. The gas is to be supplied by the Royal Bank of Canada. The California Statewide Communities Development Authority is expected to issue the bonds associated with the agreement.