Calif. Energy Regulators OK Program to Encourage Solar Power

Hoping to make California a world leader in solar power, state energy regulators Thursday approved some $3 billion in customer rebates over the next decade to encourage people to install solar panels on their roofs.

The goal is to get Californians to install equipment capable of producing 3,000 megawatts of solar electricity on 1 million homes, businesses and public buildings over the next 10 years. That is enough energy to power about 800,000 homes.

"The California Solar Initiative is the largest solar program in the country, and I hope it will be a model for other states," said Dian Grueneich, a member of the state Public Utility Commission. "The program will be a major source of dependable and environmentally friendly electricity."

The PUC voted 3-1 to provide $2.9 billion in rebates for solar panels between 2007 and 2016. Last month, the five-member commission approved $300 million in rebates for 2006.

Solar advocates said the program will make solar energy more affordable, create jobs, reduce air pollution and cut emissions of heat-trapping gases blamed for global warming.

The project incorporates many of the same provisions in a plan advanced by Gov. Arnold Schwarzenegger. That plan had bipartisan support but died in the Legislature last year because of disputes over its labor provisions.

"When I ran for office, I promised the people of California an affordable, reliable and more environmentally friendly energy supply," Schwarzenegger said in a statement. "Today is a big step toward that goal."

Only about 100 megawatts, about 0.3 percent of California's electricity capacity, now comes from rooftop solar panels, installed on about 15,000 homes and businesses, according to Environment California.

Thursday's initiative includes $2.5 billion in rebates for existing homes, businesses and public buildings that install solar panels. An additional $350 million in rebates will be offered for solar installations on new homes.

The initiative rewards people who act fast. Home or business owners who install panels this year will be eligible for a $2.80 rebate for each watt of capacity installed. So a homeowner who installs a typical 2,500-watt system costing $20,000 would receive a $7,000 rebate. The rebate drops to 25 cents per watt by 2016.

The rebates will be funded by a surcharge on gas and electricity bills. Most residential customers will pay an extra $12 a year.

Critics questioned whether ratepayers should subsidize the most expensive form of renewable energy, and whether the program will drive down the costs of solar energy, as backers claim.

"We need rates to go down, but this goes in the other direction," said Joseph Lyons, a lobbyist for the California Manufacturers and Technology Association.

Solar advocates said they expect the state spending will lead to more solar energy ventures.

"We anticipate that there are going to be a lot of companies getting into this space and thriving in this space," said Matthew Cheney, chief executive of San Francisco-based Renewable Ventures, which provides financing for renewable energy projects.