BILL ANALYSIS
AB 1383
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Date of Hearing: April 13, 2005
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Gene Mullin, Chair
AB 1383 (Pavley) - As Amended: April 6, 2005
As Proposed to be Amended
SUBJECT : Solar Energy: Low-Income Housing
SUMMARY : Creates the Low-Income Housing Development Revolving
Loan Program (Program) for purposes of financing distributed
solar energy systems in low-income housing units.
Specifically, this bill :
1)Makes findings and declarations with respect to the statewide
need and importance of procuring a steady supply of affordable
and reliable electricity for affordable housing units.
2)Creates the Program to subsidize the financing gap, not to
exceed 75% of the total cost, of a solar energy system
provided for low-income housing units.
3)Requires the California Public Utilities Commission (PUC) in
consultation with the California Energy Commission (CEC) to
begin ratemaking proceedings by July 1, 2006 to adopt a
program to invest in residential solar energy systems. Also
requires the PUC and the CEC to consider whether existing
solar energy programs are adequately funded to achieve the
goal of placing solar systems on low-income housing units by
December 31, 2018.
4)Provides that if funds are not available through a ratemaking
proceeding, the CEC shall identify funds from either:
a) Resources that are currently available in the Renewable
Resource Trust Fund, or
b) Resources available in the next reauthorization of the
Renewable Resource Trust Fund.
5)Allows the CEC to make below market rate loans to local
government, private businesses and non-profit entities for the
purposes of this measure.
6)Allows the CEC to collect application fees to cover costs of
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processing applications for loans as well as loan fees to
cover the administrative costs of the program.
7)Requires that revenue from any loan repayments including
interest and fees as well as funds collected through
foreclosure actions and other sources be deposited into the
Program fund.
8)Requires that for a project to be eligible, it must
demonstrate that it is at least 10% or more energy efficient
than existing law (Title 24) standards. Applicants that
exceed energy efficiency by more than 10% will receive an
additional 25% interest rate reduction for every 5% additional
improvements in energy efficiency.
9)Requires the CEC to ensure that grants will not exceed 10% of
overall program funds for solar energy assistance to low
income housing developers in the form of rebates.
Additionally, the CEC shall also ensure that funding will not
exceed 5% of overall program funds for other programs set
aside specifically for low-income households, including the
revolving loan fund.
10)Requires the CEC to consult with the California Tax Credit
Allocation Committee, the California Housing Finance Agency
and the Department of Housing and Community Development to
develop fund guidelines.
11)Sunsets January 1, 2016.
EXISTING LAW
1)Provides $135 million annually to the Renewable Resource Trust
Fund from investor-owned utility (IOU) customers rates to
provide rebates and credits for renewable energy programs.
2)Provides subsidies for photovoltaic solar energy systems which
total about $30 million annually, accounting for roughly half
of the installed cost of a system.
3)Establishes a separate program for the installation of
photovoltaic solar energy systems on affordable housing
projects. The subsidy for these systems is capped at 75% of
the installed cost.
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4)Requires the CEC to prescribe building design and construction
standards as well as energy conservation design standards that
increase energy efficiency for new residential and
non-residential buildings.
5)Establishes the Emerging Renewables Program within the CEC to
stimulate market demand for renewable energy systems by
offering rebates to reduce the initial cost of the system to
the customer. Establishes higher and additional renewable
energy rebates for affordable housing under the Program.
FISCAL EFFECT : Unknown.
COMMENTS :
As noted under existing law, currently the CEC provides rebates
to consumers who install qualifying renewable energy systems on
their homes. Affordable housing projects can qualify for an
extra 25% rebate above the standard rebate, not to exceed 75% of
the system cost if certain eligibility criteria are met.
To be eligible, each unit of the project must be rented or
purchased by low or moderate income households, each unit must
have its own electric utility meter, and the applicant for the
rebate must show that each unit will reduce its energy use by at
least 10%. Solar units on residential housing often cost in the
range of $20,000 for purchase and installation. With the CEC
rebate, (50% is the standard rebate) plus the additional rebate
of 25% available to affordable housing units, most builders
would be looking at about $7, 000 per unit for solar panels.
According to the CEC, most solar panel units will last about 30
years, significantly lowering utility costs and will recoup
their up-front investment back in 4 to 12 years. This program
is heavily oversubscribed.
Need for the bill
According to the author, AB 1383 seeks to provide affordable
housing developers with access to a revolving loan fund for the
purpose of providing financing for the gap between the amount
received through the current solar rebate program and the total
installed costs of a solar system.
As noted under existing law, the CEC provides rebates for
installation of photovoltaic home energy systems. The CEC
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provides a special program for affordable housing developers,
offering a rebate of up to 75% of the cost of installation.
According to the author, this bill is designed to make up the
difference between what the existing, low-income housing rebate
provides, and the actual cost of installation.
Arguments in Support
Housing California states, with utilities second only to rent in
expenses for low-income housing residents, lowering utility
bills can significantly impact a low-income family's finances.
Further, resources saved by affordable housing developers can be
reinvested in additional housing units or used for other
improvements.
Technical amendments
As AB 1383 is currently drafted there are several technical
issues and inconsistencies. The author and committee staff have
drafted amendments to address those concerns.
Double referred
The Assembly Committee on Rules referred AB 1383 to Housing and
Community Development and Utilities and Commerce Committee. If
AB 1383 is approved by the Assembly Housing Committee, the bill
must be referred to the Assembly Committee on Utilities and
Commerce.
REGISTERED SUPPORT / OPPOSITION :
Support
Global Green (Sponsor)
American Federation of State County Municipal Employees
Greenpeace
Housing California
Kyocera Solar, Inc., San Diego
Sierra Club California
Opposition
None on file.
AB 1383
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Analysis Prepared by : Hugh Bower / H. & C.D. / (916) 319-2085