California solar incentive policy
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CPUC rules RECs belong to system owners
December 2006 - A draft decision from the California Public Utilities Commission grants solar energy system owners and other renewable energy distributed generation facility owners 100% ownership of the renewale energy credits (RECs) associated with their facilities.
Exactly what are RECs and why does this decision matter? Here's the U.S. Department of Energy's definition:
"Renewable energy certificates (RECs), also known as green certificates, green tags, or tradable renewable certificates, represent the environmental attributes of the power produced from renewable energy projects and are sold separate from commodity electricity. Customers can buy green certificates whether or not they have access to green power through their local utility or a competitive electricity marketer. And they can purchase green certificates without having to switch electricity suppliers." (Source)
The discussion about REC ownership came about as part of developing California's "Renewable Portfolio Standard" or RPS. Every state is required to develop renewable energy goals and measurements to increase the percentage of renewable energy in the state's electricity mix. California established its RPS Program in 2002, setting the goal of producing 20 percent of the state's electricity with renewable energy sources by 2017. The CPUC later recommended accelerating the goal to 2010 and increasing the target of 33 percent electricity from renewable energy by 2020. The state first adopted an Energy Action Plan in 2003 to support its RPS goals. The new CSI program to produce 3,000 megawatts of electricity through solar energy represents one component of this overall plan.
As part of planning and implementing programs to meet California's RPS goals, the CPUC is continually developing rules, standards, and policies. Ownership of RECs -- that is, who should have the right to sell or trade the credits associated with the quantified carbon offset from green power production -- is one of numerous issues the CPUC has had to settle. In November 2006, the CPUC issued a proposed decision that would have granted investor-owned utilities such as Pacific Gas & Electric full ownership of RECs. Utilities wanted to claim ownership of RECs to meet requirements placed on them as part of California's RPS. But an outpouring of protest came from solar industry, solar advocates, and consumers who argued that gifting RECs to utilities would eliminate an important source of revenue for solar owners, not to mention incentive for potential solar purchasers. As a result, the CPUC issued the revised draft decision.
Other CSI program updates
The CPUC also has posted an update of the solar incentive changes that will take effect in January 2007 as part of the transition to the new California Solar Incentive.
CSI's proposed incentive program is significantly different that the existing Emerging Renewables and Self-Generation Incentive rebate programs. Many program details still need to be hammered out in preparation for implementing the CSI. According to RenewableEnergyAccess.com, some key issues to be addressed include:
- How moving to an expected performance based incentive () program will affect a potential customer's decision to invest in solar.
EPBI
- How the PV Calculator will fairly determine rebate levels for different geographic locations around the state.
- How municipal utilities will comply under the CSI and help the California solar market grow.
Input and comments from the solar industry and general public is especially critical right now!
Online comments submission and CPUC contact information »
Important resources:
Draft CSI Handbook »
CEC New Solar Homes Partnership (NSHP) Draft Guidebook »
Notice of Dec. 13, 2006 Meeting to Consider NSHP Draft Guidebook »
SB1 Compliance Ruling »
CCEnergy glossary definition of RECs
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About CSI
In a historic move, the California Public Utilities Commission voted on January 12, 2006 to establish the California Solar Initiative, or CSI, an 11-year, $3 billion solar rebate program, the largest in the nation and second largest in the world. California's goal is to deploy 3,000 megawatts of clean energy from residential, commercial and government buildings throughout the state to help satisfy California's peak power demands
The CPUC has conducted workshops over the past several months to design the CSI program, gathering utility, industry, and public input about such issues as program design, incentive levels, efficiency, administration, metering, and eligible technologies.
About CSI »
Read the CPUC's decision requesting comments »
CPUC's summary of CSI »
See VoteSolar's summary of CSI and potential benefits »
SB1 background
In August 2006, the California State Legislature passed Senate Bill 1, the Millions Solar Roofs Initiative championed by Governor Arnold Schwarzenegger, after a multi-year odyssey by numerous solar energy industry, consumer, and environmental groups to get a comprehensive, long-term solar program established in California.
Details of how SB1's passage affects CSI program details and goals are discussed in the CPUC's SB1 Compliance Ruling.
History and summary of SB1 »
More information about solar legislation
Here are several important solar-related legislation to watch for during this legislative session:
More about existing solar rebate and incentives »
CCEnergy's solar advocacy »
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