BILL ANALYSIS
SB 118
Page 1
SENATE THIRD READING
SB 118 (Bowen)
As Amended August 27, 2004
Majority vote
SENATE VOTE :Vote not relevant
UTILITIES AND COMMERCE APPROPRIATIONS
(vote not relevant) (vote not relevant)
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SUMMARY : Establishes a Solar Energy Peak Procurement Program in
the California Public Utilities Commission (PUC) to award
rebates for the installation of grid connected solar energy
systems as specified and requires the development of a Solar
Peak Energy Affordable Housing Revolving Fund in the State
Treasury.
FISCAL EFFECT : Unknown
COMMENTS : Solar Energy Peak Procurement Program: This bill
creates a solar energy rebate program within PUC to fund
installation of grid connected solar energy systems for
residential, commercial or industrial customers.
The rebate is to be awarded to customers by no later than July
1, 2005. In the first year of the rebate the maximum amount
given can be up to $3 per watt (on average the installed costs
of a residential solar system is $8 to $10 a watt or $8,000 to
$10,000) and declines to zero by
January 1, 2015.
The authorized funding level for the program is to be at a level
of $100 million annually without raising fees or rates. This is
accomplished by redirecting unallocated funds from demand
management and interruptible programs that are administered by
the investor owned utilities (IOUs) to the new Solar Peak Energy
Procurement Fund in the State Treasury. This bill also directs
PUC to use cost savings associated with reducing purchases of
expensive electricity during peak times to fund the solar rebate
program. Under this proposal IOUs will reduce purchases of
electricity during peak times as a result of having more homes
and businesses installed with photovoltaic cells or other
similar devices producing their own electricity during the peak
SB 118
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times of the day. Cost of electricity varies depending on
whether IOUs are procuring or generating their own but during
peak demand times of the day when customer use is at its highest
the costs of electricity can be higher by as much as $0.01 to
$0.02 cents or more per kilowatt/hour.
This bill also increases the net metering cap from 0.5% to 3% of
an electric service provider's aggregate customer peak demand.
Previous figures showed that total in state net metered capacity
was only 0.02% of utility peak load.
Low-Income Affordable Housing Rebates: This bill requires that
5% percent of funds in solar energy rebate program to go towards
supporting installation of grid connected solar energy systems
for affordable housing or rental housing development for
extremely low-income households, very low-income households,
lower income and moderate-income households.
Furthermore, this bill requires PUC to develop by June 30, 2005,
a zero interest revolving loan program to finance grid connected
solar energy systems for affordable housing projects funded out
of the Solar Peak Energy Affordable Housing Revolving Fund in
the State Treasury.
SB 118 is contingent upon enactment of AB 2006 (Nunez).
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083
FN: 0009102