Environmental Law

California Reports Record Solar Installations

By Dennis Pfaff and Kevin Livingston, Editors

Sunny California, indeed.

Utility regulators in The Golden State reported recently that 93 megawatts of grid-connected rooftop photovoltaic solar panels had been installed during the first nine months of the year under the California Solar Initiative.

The 2008 installations under the CSI program -- plus another 18 MW installed under a previous incentive program -- easily topped the total of 81MW installed during the entirety of 2007 in all parts of the state. In all, according to the report, the state now has 392 MW.

The ratepayer-funded CSI program, launched last year, has a budget of nearly $2.2 billion over 10 years and provides incentives to customers in the territories of the state's big three investor-owned utilities, Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas and Electric Company. The program is overseen by the California Public Utilities Commission.

Demand for the incentives accelerated in the third quarter of the year, in spite of the fact that until they were recently extended for eight years, there was continuing uncertainty over the fate of federal solar tax credits. Additionally, the state program's incentive levels decrease over time as demand for solar increases. The report said the incentives currently represent about 20 percent of solar project costs, meaning that the approximately $790 million already paid or reserved under the program is supporting about $4 billion in investments.

The report also noted that the recently extended federal tax program was sweetened by the removal of a $2,000 limit for homeowners, allowing them to claim a full 30 percent of their investment. Together, the report said, with the federal and state incentive programs in place, "the solar industry is growing in California."      

In a statement accompanying the release of the new report, the CPUC's supervisor of the program noted the remarkable growth in California:

“Even as industry lobbied to extend [federal] tax credits, all three [utility] program administrators saw CSI applications jump by more than 25 percent in both residential and commercial solar sectors from second quarter. Demand for solar shows no signs of slowing, and California’s solar installations are reaching record levels.”

Solar industry officials are aiming for the day, soon, when incentive programs won't be necessary, at least according to a Reuters report from a big solar conference in San Diego. The dispatch said industry insiders think subsidies will no longer be needed within the eight-year federal subsidy period because by then solar power will cost less than electricity generated by conventional power plants.

Meanwhile, the California utility agency on Thursday announced that solar rebates will be available for qualifying affordable housing developments under a new $108 million solar incentive program for multifamily housing. The incentive is also part of the solar initiative.

--Dennis Pfaff of Thelen LLP

Photo: Installing solar roof panels, San Ramon, California; courtesy U.S. Department of Energy-National Renewable Energy Laboratory; credit: Davis Energy Group 

Full post as published by Climate Law Update on October 16, 2008 (boomark / email).