BILL ANALYSIS
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THIRD READING
Bill No: SB 1
Author: Murray (D)
Amended: 5/31/05
Vote: 21
SENATE ENERGY, UTILITIES & COMMUN. COMM. : 10-0, 4/26/05
AYES: Escutia, Morrow, Alarcon, Battin, Campbell, Cox,
Dunn, Kehoe, Murray, Simitian
NO VOTE RECORDED: Bowen
SENATE APPROPRIATIONS COMMITTEE : 8-4, 5/26/05
AYES: Migden, Alarcon, Alquist, Escutia, Florez, Murray,
Ortiz, Romero
NOES: Aanestad, Ashburn, Battin, Poochigian
NO VOTE RECORDED: Dutton
SUBJECT : Energy: Million Solar Roofs Initiatives
SOURCE : Author
DIGEST : This bill establishes the Million Solar Roofs
Initiative, the goal of which is to place one million solar
energy systems, or 3,000 megawatts, on new or existing
residential and commercial buildings by 2018.
ANALYSIS : Current law, (SBX2 82 [Murray] Chapter 10,
Statues of 2001), requires the Department of General
Services, in consultation with the California Energy
Commission (CEC) to ensure that solar energy equipment is
installed, no later than January 1, 2007, on all state
CONTINUED
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buildings and state parking facilities where feasible and
cost-effective, as specified. Apparently, very few systems
have been installed as a result of this statute.
Existing law also establishes numerous subsidy programs for
solar photovoltaic (PV) systems. For example, the
Self-Generation Incentive Program (SGIP), within the Public
Utilities Commission (PUC), provides incentives to
customers for the installation of qualifying (greater than
30 kW) solar, wind turbines, etc. The current incentive is
$3.50/watt. The SGIP is funded by a charge imposed on
utility bills, which generates about $125 million annually,
of which the PV portion is about $70 million. The PUC has
imposed an administrative sunset of December 31, 2007. A
cost-effectiveness report of the SGIP is due in July 2005.
Current law also establishes the Emerging Renewables
Program (ERP), administered by the CEC, for systems less
than 30 kW, which provides a rebate of $2.80 per watt for
installation of PV systems. In addition, there are a
number of other solar subsidies available, such as:
1.7.5 percent personal income and corporate tax credit for
taxpayers who purchase solar or wind systems.
Approximately 4,000 taxpayers claimed the solar credit in
2003.
2.Property tax exemption for solar energy systems installed
between January 1, 1999 and January 1, 2006.
3.Net metering program for PV systems, which credits the
customer for electricity produced by spinning the meter
backwards.
4.Federal tax credits.
Since 1976, the state has provided more than $1 billion in
tax credits for solar energy systems. In addition, the PV
portions of the CEC and PUC programs mentioned above
generate about $100-110 million annually.
This bill proposes to increase the number of PV systems in
the state from about 12,000 to one million, or increase
solar capacity from about 93 megawatts to 3,000 megawatts
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(about the equivalent of six small power plants) by
increasing electricity rates and offering solar subsidies.
Specifically, the bill:
1. Requires the CEC to develop, implement and fund the
Million Solar Roofs Initiative (MSRI), and establish
solar subsidies, not to exceed the subsidy level in
existence on January 1, 2006 (probably $2.80-3.00/watt,
or about $7,250 for a 2.5kW residential system), which
decrease annually to zero by the end of 2016.
2. Requires the CEC, in implementing the MSRI, to evaluate
the costs and benefits of having an increased number of
solar systems as part of the electrical system, as
specified.
3. Requires the PUC to adopt a program by January 1, 2007
to implement and finance the MSRI, and to include the
reasonable cost of the program in the distribution
revenue requirements of electrical corporations.
4. Requires the PUC program to be a cost-effective
investment by ratepayers in peak electricity generation
capacity, as specified.
5. Requires municipal utilities to adopt similar programs
funded by a surcharge.
6. Requires production home builders to offer solar as an
option.
7. Requires the CEC to conduct random audits of solar
energy systems to evaluate their operational
performance.
8. Provides that upon implementation of the MSRI, the PV
portions of the ERP the SGIP shall be discontinued and
their respective funding (about $100-110 million)
deposited into the MSRI Trust Fund at the 2004-05
levels.
9. Exempts low-income customers participating in the
California Alternate Rates for Energy (CARE) program
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from any rate increases necessary to fund the program.
10. Makes related changes.
Note: For an extensive discussion of the issues involved,
please refer to the
Senate Energy, Utilities and Communications Committee
analysis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According the to Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2005-06 2006-07
2007-08 Fund
PUC $140 $279 $279
Special*
Costs should be recovered from fee
revenues.
CEC $705 $1,385 $1,485 Unspecified
Costs should be recovered from
revenues.
State agencies' energy costs See comments below
Various
*Public Utilities' Reimbursement Account (PURA)
California's electricity rates are among the highest in the
nation. The electricity cost savings associated with 3,000
MW are indeterminable, but significant. On the other hand,
rate increases will help fund the subsidy program. Senate
Appropriations staff notes that energy costs of state
agencies are in excess of $500 million annually. For
illustrative purposes, a one percent increase in the
state's energy costs could result in increased costs of $5
million annually.
Note: For a detailed breakdown of all costs, please refer
to the Senate
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Appropriations Committee analysis.
SUPPORT : (Verified 5/31/05)
Schwarzenegger Administration
Attorney General Bill Lockyer
Akeena Solar
Alliance for Nuclear Responsibility
American Colar Energy Society
American Federation of State, County and Municipal
Employees
American Lung Association
Bluewater Network
Borrego Solar
California Alliance For Consumer Protection
California Building Officials
California Interfaith Power and Light
California League of Conservation Voters
California Public Interest Research Group
California Public Utilities Commission
Carville Sierra, Inc.
City of Aliso Valley
City of Berkeley
City of Irvine
City of Santa Cruz
City of Sebastopol
Clarum Homes
Clean Power Campaign
Coalition for Clean Air
Community Environmental Council
Cooperative Community Energy
East Bay Municipal Utility District
Energy Independence Now
Environment California
Global Green USA
Gray Panthers
Green Lease, Inc.
Greenpeace USA
Henry T. Perea, Councilmember 7th District
Industrial Environmental Association
KYOCERA International, Inc.
Marin County Board of Supervisors
Merced/Mariposa County Asthma Coalition
National Wildlife Federation
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New Vision Technologies
NorCal Solar
Northern California Solar Energy Association
Oakland City Mayor Jerry Brown
Our Children's Earth
Pacific Environment
Pacific Gas and Electric Company (if amended)
Physicians for Social Responsibility
Planning and Conservation League
Powerlight Solar Electric Systems
Public Citizen
PV Manufacturers Alliance
Rainforest Action Network
Real Goods
Relational Culture Institute
Sacramento City Mayor Heather Fargo
San Diego City Council Member Donna Frye
San Francisco County Board of Supervisors
San Francisco Mayor Gavin Newsome
San Jose City Mayor Ron Gonzalez
Sempra Energy (if amended)
Sharp Solar
Sierra Club California
Solar Integrated Technologies
SolarWorks
South Coast Air Quality Management District
Stopwaste.org
Sun Power & Geothermal Energy
The Better World Group
Union of Concerned Scientists
Vote Solar
Working Assets
World Council for Renewable Energy
Yolo County Board of Supervisors
OPPOSITION : (Verified 5/31/05)
California Manufacturers and Technology Association
California Chamber of Commerce
Associated Builders and Contractors (oppose unless amended)
California Building Industry Association (oppose unless
amended)
Southern California Edison (oppose unless amended)
The Utility Reform Network (oppose unless amended)
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NC:nl 5/31/05 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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