BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1383
                                                                  Page  1

          Date of Hearing:   May 18, 2005

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                   Judy Chu, Chair

                    AB 1383 (Pavley) - As Amended:  May 16, 2005 

          Policy Committee:                              HousingVote:5-1
                        Utilities                             7-3

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY

           This bill increases the maximum allowable rebate for  
          installation of solar energy systems in affordable housing  
          projects from 75% to 100% of installed costs.

           FISCAL EFFECT  

          Based on an average solar energy rebate amount to date of about  
          $11,300 (at 75%), increasing the rebate to 100% would increase  
          the average grant by about $3,800. To maintain current grant  
          volume, total funding for affordable housing rebates would have  
          to increase by $620,000 per year or, at the same level of  
          funding, the number of grants would decline by 25%.

           COMMENTS  

           Purpose  . The author wishes to reduce the development costs of  
          affordable housing projects that utilize solar energy systems by  
          allowing state rebates to cover 100% of project costs. The  
          California Energy Commission (CEC) administers programs to  
          provide rebates to consumers who install qualifying renewable  
          energy systems, including solar systems, on their homes.  
          Qualifying affordable housing projects can obtain an additional  
          rebate above the standard rebate, but not to exceed 75% of the  
          system cost. 

          Since March, 2003, the CEC has approved 327 affordable housing  
          rebate requests representing 765 kW of potential electricity  
          production. If all of the projects are completed the CEC will  
          pay out approximately $3.7 million in rebates to affordable  
          housing projects. The solar energy rebate program is heavily  








                                                                  AB 1383
                                                                  Page  2

          oversubscribed, and in order to better meet demand, the CEC has  
          had to transfer funds from other renewable programs. 

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081