BILL ANALYSIS
AB 1383
Page 1
ASSEMBLY THIRD READING
AB 1383 (Pavley)
As Amended May 27, 2005
Majority vote
HOUSING 5-1 UTILITIES &
COMMERCE 7-3
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|Ayes:|Mullin, Baca, Hancock, |Ayes:|Levine, Baca, Jones, De |
| |Salinas, Torrico | |La Torre, Jerome Horton, |
| | | |Montanez, |
| | | |Ridley-Thomas |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Garcia |Nays:|Bogh, Keene, Wyland |
| | | | |
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APPROPRIATIONS 13-5
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|Ayes:|Chu, Bass, Berg, | | |
| |Calderon, Mullin, | | |
| |Karnette, Klehs, Leno, | | |
| |Nation, Oropeza, | | |
| |Ridley-Thomas, Saldana, | | |
| |Yee | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Sharon Runner, Emmerson, | | |
| |Haynes, Nakanishi, | | |
| |Walters | | |
| | | | |
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SUMMARY : Allows THE California Energy Commission (CEC) to
increase the maximum allowable rebates for installation of solar
energy systems on affordable housing projects from 75% of the
installed costs to a level of up to 100% of the total installed
costs to stimulate increased participation in the current rebate
program from affordable housing.
EXISTING LAW :
AB 1383
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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 (PV) 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 PV
energy systems on affordable housing projects. The subsidy
for these systems is capped at 75% of the installed cost.
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 : 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. CEC
administers programs to provide rebates to consumers who install
qualifying renewable energy systems, including solar systems, on
their homes. Under this program, 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, CEC has approved 327 affordable housing
rebate requests representing 765 kW of potential electricity
production. If all of the projects are completed CEC will pay
out approximately $3.7 million in rebates to affordable housing
projects. The solar energy rebate program is heavily
oversubscribed, and in order to better meet demand, CEC has had
to transfer funds from other renewable programs.
According to the sponsor, Global Green, affordable housing
developers currently have a difficult time paying for the
installation of solar energy systems because they cannot afford
the added debt on the projects even when 75% of the solar energy
system is paid for through the existing rebate program.
Federal tax programs grant tax credits to affordable housing
AB 1383
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developers, but these credits can be reduced if the developers
receive grants since grants lower the total costs to the
developers. The developer could maximize their federal tax
credits and the state could better maximize moneys set aside to
promote the installation of solar energy systems if the state
helps fund solar installations through loan programs, which do
not lower the total cost of the project for tax purposes and
consequently do not reduce the tax credits.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0010814