Gino DiCaro

CMTA Solar Principles

By Gino DiCaro, VP, Communications

Capitol Update, Oct. 1, 2004 Share this on FacebookTweet thisEmail this to a friend

During the last weeks of the 2003-2004 legislative session, the Legislature considered a number of bills relating to solar energy. SB 199 (Kevin Murray, D-Los Angeles), sponsored by the Schwarzenegger administration, would have established a solar rebate program to encourage the installation of solar panel systems on one million homes over the next 13 years. SB 118 (Debra Bowen, D-Marina del Rey) would have redirected funds from existing utility interruptible programs and demand reduction programs to fund a similar program. CMTA opposed both measures, citing their impact on utility rates and existing interruptible programs.

Looking ahead to the next legislative session and the likelihood of additional legislation, CMTA and a number of other energy stakeholders sent a joint letter to Governor Schwarzenegger on September 29th with a set of principles for his consideration in the ongoing discussion of solar programs.

The other signatories are: the California Chamber of Commerce, Southern California Edison, Pacific Gas & Electric, Sempra Energy and the California Large Energy Consumers Association.

CMTA and the other organizations endorse the following principles relative to the establishment of a program to promote the use of solar energy as part of the overall emerging renewable program:

* Cost-Effectiveness. The program should require that the most cost-effective systems be used in a manner that provides demonstrable benefits to ratepayers. Cost-effectiveness and reliability benefits for customers depend not only on initial price but also on the predictability of the overall output level of the systems over time, their durability, and the costs of maintaining them. Expedition of deployment should not be pursued either without sufficient real knowledge about the performance of the systems over time. While we recognize that the economic benefits of solar technology are expected to increase as initial costs are driven down through greater production, consumer-supported expansion of the introduction of photovoltaics should be premised on realistic and verifiable forecasts of output and durability of the solar systems.
* Performance and Measurement. Incentives should be based upon the actual measured performance of each system, by time of use, not design capacity. Program goals should be based on a thorough analysis of performance-related criteria, availability of systems, and market demand. Additionally, solar marketing standards should apply to sellers and installers of systems so as to provide clear and meaningful data to consumers in regards to solar product performance data and cost effectiveness.
* Targeted Locations and Eligibility. The program should be available statewide to as broad a group of potential customers as practicable and cost-effective, subject to allocation principles that ensure that incentives are made available to customers within each utility's service territory on an equitable basis and are targeted to locations that would provide maximum benefit. This program should include residential, commercial and stand alone projects in a manner that does not distort retail competition nor affect customer choice.
* No Cost Shifting. The program should not shift costs to other customers and the cost impact of any such program should apply equitably to all customers who are eligible to participate. Solar net metering may be expanded to support the program if it is demonstrated that such expansion will produce clear signals to maintain and produce more power for the solar units and is limited to a credit on the generation component of the rate and not the full retail rate.
* RPS Requirement. Gross output of net metered generation or generation that receives other customer funded subsidies should count towards the utility's Renewable Portfolio Standard requirement.
* Statewide Application. The peak energy cost avoidance benefits of a solar incentive program would be enjoyed by all citizens of the state through a reduction in requirements for peak energy. For this reason, the program should be funded by all utility customers, including customers in the territory of local publicly owned utilities, subject to the same rules and obligations.

CMTA and the other signatories agree that a solar program should be firmly grounded in goals which achieve operating efficiency and cost-effectiveness and should advance the objective of adding solar power in a manner that benefits customers, consistent with these principles. We look forward to working with the Schwarzenegger Administration in the coming months to achieve a balanced and cost-effective solar program.
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