Schwarzenegger Signs Legislation to Complete Million Solar Roofs Plan

August 22, 2006 -Ed Mendel - Union Tribune, Staff Writer

SACRAMENTO – Gov. Arnold Schwarzenegger yesterday signed a bill that completes his “million solar roofs plan,” a move he says will put California on the cutting edge of renewable energy while also boosting the economy.

The bill and action by the state Public Utilities Commission in January use a rate increase, about $15 a year for the average residential customer, to provide rebates lowering the cost of installing solar panels.

The goal of the $3.2 billion program is to create 3,000 megawatts of clean solar power – or 5 percent of the state's total need – during the next decade, avoid constructing six fossil-fuel power plants and the greenhouse gases they would emit and lower solar costs through mass production.

While supportive of renewable energy, consumer advocates were split over whether the program finances would pan out as promised.

The governor estimated that the current cost of installing a solar power system in a typical house, about $15,000, could be reduced to $2,000 if the plan works as hoped.

“So I think it will be much, much cheaper,” Schwarzenegger said as he signed the bill at an event in Los Angeles. “It's kind of like with the cell phones, that the more people buy cell phones, the more the prices came down.”

When the Public Utilities Commission acted in January, the plan was hailed as another example of California's leadership in environmental action while creating a dependable power source.

“The California Solar Initiative is the largest solar program in the country, and I hope it will be a model for other states,” Public Utilities Commissioner Dian M. Grueneich said in a statement in January.

At the bill signing event, Schwarzenegger took a larger view: “I want to prove to the rest of the world that you can protect the environment and also have an economic expansion and boom.”

The Republican governor appeared with Assemblyman Sam Blakeslee, R-San Luis Obispo, and two Democratic legislators: Sen. Kevin Murray of Culver City, the author of SB 1, and Assemblyman Lloyd Levine of Sherman Oaks.

Schwarzenegger and Murray called the bill a bipartisan accomplishment. Not mentioned was the failure of the measure last year when the governor rejected Democratic provisions giving labor unions preference for solar work under the bill.

After the bill stalled, the governor asked his appointees on the Public Utilities Commission to enact the main provisions of the bill covering the three investor-owned utilities, including San Diego Gas & Electric.

The bill expands the plan to municipal utilities, notably the Los Angeles Department of Water and Power, and added a requirement that new developments of more than 50 homes begin offering a solar option in 2011.

The campaign of Schwarzenegger's Democratic challenger in the November election for governor, state Treasurer Phil Angelides, issued a statement calling the bill signing a desperate photo-op attempt to burnish the governor's environmental credentials.

“While expanding the use of solar energy is a baby-step in the right direction, Gov. Schwarzenegger has consistently failed to move California away from its dependence on foreign oil,” said Nick Papas, an Angelides spokesman.

Murray moved the bill through the Legislature this year with little public opposition, except from a consumer group concerned about the rate increase that will be paid by electricity and natural gas customers.

“Our concern is that most of the customers paying these rate hikes may not be the ones who see any benefits from the program,” said Mindy Spatt of The Utility Reform Network in San Francisco.

Michael Shames of the Utility Consumers' Action Network in San Diego said adding more solar power is a good idea. But he was skeptical about whether the plan would dramatically lower solar costs. He said a solar program in Germany didn't live up to expectation, though other consumer advocates disagreed.

“Solar is economic in some circumstances, not in others,” Shames said. “It's the start of a long-term energy process. But it's not going to change the energy landscape anytime soon.”

A spokeswoman for the bill sponsor, Bernadette Del Chiaro of Environment California, a spin-off from the California Public Interest Research Group, said she usually agrees with the two consumer groups, but not in this case.

Del Chiaro said a similar program in Japan cut solar costs 75 percent. She said solar costs in California have already dropped 25 percent during the past seven years.

Agreeing with remarks made by Murray at the signing event, Del Chiaro said the solar program will save ratepayers money in the long run because they will not have to pay for expensive new power plants.

Murray's bill will raise the number of solar-powered customers that can sell excess power back into the grid from 0.5 percent of a utility's total load to 2.5 percent.

Although the bill was supported by Sempra Energy, the parent of SDG&E, the energy firm said the full cost of metering and distributing excess power from solar homes should be paid by the program fund.

More than 3,000 customers of SDG&E are currently selling power back into the grid, “net metering” as the industry calls it, said Ed Van Herik, a spokesman for the utility.

“While customers that are net metering electricity will realize significant benefits, electrical corporation customers that are not will suffer significant cost shifts,” Sempra said in statement about SB 1.

The number of customers that sell power has been growing in recent years, going from 10 completed applications for net metering in 1999 to 941 last year, Van Herik said.

All three investor-owned utilities (including Southern California Edison and Pacific Gas and Electric) currently have about 20,000 homes producing 155 megawatts of solar power, said Claudia Chandler of the California Energy Commission.

If successful, the new plan will result in a million homes with 3,000 megawatts of solar power by 2017.

Current law requires investor-owned utilities to obtain 20 percent of their power from renewable sources – such as solar, wind, water and thermal – by 2017, increasing at the rate of at least 1 percent of sales a year.

Details of the plan, the California Solar Initiative, are available on the Web site of the Public Utilities Commission: www.cpuc.ca.gov.