California's Million Solar Roofs bill signed into law

Posted by Adam Browning (Guest Contributor) at 4:05 PM on 22 Aug 2006

SB 1, California's Million Solar Roofs bill, was signed into law by Governor Schwarzenegger yesterday. For those new to the story, this bill -- which some have called humankind's last, best hope for surviving global warming -- failed to pass out of the legislature three years running, until the California Public Utilities Commission enacted the meat of the measure -- $3.2 billion in rebates for one million solar roofs -- through a regulatory process last January. This bill codifies that funding into legislation, and fills in several very important missing pieces. Namely:

Raises the cap on net metering from 0.5% to 2.5% of peak demand. Net metering is a policy that allows solar system owners to get credit for excess electricity fed back into the grid. This policy makes solar systems effectively about 25% cheaper, and by lowering system demand during peak load periods, reduces costs for all ratepayers. Without this expansion, the cap would have been exceeded in PG&E territory, severely impacting the largest solar market in the country. The new cap will allow for around 1,200 MW of net metered solar in California.
Requires production home builders -- that is, home developments over 50 units -- to offer solar systems as a standard option. Done right, solar systems can potentially be installed more cheaply during construction than as a retrofit.
Brings municipal utilities into the fold. Munis will have to develop their own solar rebate program, directing as much as $800 million in municipal ratepayer funds for solar.

There's more. For the real policy wonk, check out the text of the bill here (PDF).

For story: California's Million Solar Roofs bill signed into law
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OK

Ok, you didn't like my link to a very similar post from 11 days ago, so I'll just post it here - it offers my own thoughts/questions on MSR.

START POST

The California State Senate Energy Committee passed the reincarnated Million Solar Roofs bill this past week - unanimously. This is apparently only the first in a number of steps needed to put the bill into law, but is nonetheless a symbolic milestone.

$3.2 billion earmarked for solar roof refunds in the territories of 3 utility cos: Pacific Gas & Electric (PG&E), Southern California Edison and San Diego Gas & Electric (SDG&E). Is this a good number or not? I have no context in which to judge, but anything measured in billions qualifies as big.
Removal (or raising) of the Net Metering Cap. One of the fun advantages of solar power, domestic wind power, etc has been the ability to sell excess back to your utility co. and get paid for it. Apparently, however, your ability to do so has been limited by a cap - utilities will apparently pay for contributed electricity up to 0.5% of their total load (the new MSR bill raises this to 2.5%). Err - I'm not really sure what this cap actually means: Why would any kind of cap exist? Is the grid not agnostic as to where it gets its power from? Or is this a costing issue (i.e.: more expensive to payout to homeowners than to generate at big plants)? Or, is it reflective of some kind of physical limit??
Making solar a standard homebuilding option. This one makes sense on a conceptual level - granite counter tops - y/n? Solar roof and support electronics - y/n? Why not make it an option? My question is - why isn't it an option already? Contractors are always looking for a source of margin - yet they haven't embraced solar as an option, and if I'm not mistaken, most solar systems are retrofits. This suggests to me that for contractors to take on solar would be a prohibitive cost to pass onto the consumer - or not enough profit for the contractor. Something seems to be amiss here.
The final point is extra confusing: apparently, the state utilities board that would administer the MSR doesn't have control over the Los Angeles Public Works board; meaning that the bill passed in the State Senate would have a goal of establishing a parallel program in LA. That program apparently would have to be funded by the LAPWB itself, and would chop $800 million off the state budget. Is that chop reflected in the 3.2 b already? Or what? What about other large urban centres?

Anyway, MSR is conceptually great, but for someone far removed from the debate, raises a bunch of questions. As inspired an idea as it seems to be on the surface, it almost seems like one of those things that should be left to the free market to mediate. Rising utility costs, declining solar costs, increasing awareness, and crappy utility service should drive solar adoption without the need for a multi-billion dollar government morass. Is this a case of superfluous government meddling? Or is it a legitimate case of government tilting the economic balance in solar's power to achieve a quasi-social goal?

END POST

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by dreadsword at 9:49 AM on 23 Aug 2006

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