Environmental Law

California Incentives Boost Solar Installations, Regulators Report

By Dennis Pfaff and Kevin Livingston, Editors

A new report published by the California Public Utilities Commission suggests a robust beginning for a state program to provide incentives for residential and commercial solar projects.

The document, issued this week, reported that the California Solar Initiative, launched in January 2007, has received more than 10,000 applications. It has more than 9,800 on file, equaling more than 249 megawatts of new solar and $649 million in incentives (see full text of report here). The initiative, which covers existing residences and both existing and new commercial, industrial and agricultural properties, is one of several in California intended to boost solar installations.

Among the report's highlights:

• Applications for more than 40 megawatts were added in the first quarter of 2008;
• The program has 33.4 megawatts of installed projects, including more than 14 MW in the first quarter of 2008;
• Residential applications make up 89 percent of all the applications received but the total capacity of non-residential projects account for more than 80 percent of the electric capacity.

Officials estimated that based on applications received by the end of 2007, at least 100 MW of capacity should be installed under the initiative in 2008. Project applicants have 12 months to complete their installations.

The nearly $2.2 billion ratepayer-funded program offers financial incentives to customers in the territories of the state’s large private utilities, Pacific Gas and Electric; Southern California Edison and San Diego Gas and Electric. The report found that so far the most interest in both residential and non-residential project has been in PG&E’s territory, although that could change under the program’s provisions allowing incentives to decrease once certain levels of capacity are met in each area.

The CPUC goal is to reach 1,750 MW of solar installations by 2017. With the 249 MW of applications on the books, the report said the program “would appear to be on track to meet at least 14 percent of the program’s 10-year goal.” There are no annual targets because the program’s demand is expected to fluctuate as incentive levels drop.

 Despite the report’s relatively sunny findings, it noted that “new challenges” may confront the program in the months ahead. Those include the fact that strong demand in the first year has caused incentive levels to drop three times within 15 months for some areas. For instance, PG&E and Edison are now offering $1.55 a watt for commercial systems, down from a maximum of $2.50 a watt.

Other possible clouds on the horizon include uncertainty over federal incentives, which have been tied up in Congress (see most recent Climate Law Update story here), strong worldwide demand for solar driving up the price of components, fluctuations in the rate at which applicants drop out of the program and the health of the nation’s troubled housing markets.

(Photo: California Solar Initiative)

Full post as published by Climate Law Update on April 17, 2008 (boomark / email).