Click to Edit California s Distributed Solar Energy Program Working to Transform the Market for Solar PV and Thermal California Public Utilities Commission November 9, 2010 Damon Franz, Energy Division df1@cpuc.ca.gov
What is the CPUC? Headquartered in San Francisco Regulates privately owned (i.e. investor owned) telecommunications, electric, natural gas, water, railroad, rail and other transportation companies. Ensures safe, reliable utility service at reasonable rates, protecting against fraud, and promoting the health of California s utilities. Five Commissioners are appointed by the Governor and confirmed by the California Senate. Governor selects one of the five Commissioners to serve as the CPUC president. Commissioners make all CPUC policy decisions, meeting usually twice a month to discuss and vote on issues. 2
California s Preferred Resources Loading Order of Energy Resources: Energy efficiency Demand response Distributed generation Renewable generation Cleanest available fossil resources California Public Utilities Code Section 454.5 3
Moving to Zero Net Energy Buildings in California California goals: By 2020, all new homes are zero net energy homes By 2030, all new commercial buildings are ZNE 4 4
California Solar Initiative is Part of Statewide Solar Program: Go Solar California Goals of Go Solar California 3,000 MW of new customer-owned distributed solar statewide Self-sustaining solar industry free from ratepayer funded incentives Budget $3.3 billion budget (2007-2016) split across programs throughout state Program Budget Solar Goals (MW) Scope 5 California Public Utilities Commission California Energy Commission Publicly Owned Utilities (POU) Total California Solar Initiative (CSI) New Solar Homes Partnership (NSHP) Various Go Solar California $2,167 million $400 million $784 million $3,351 million 1,940 MW 360 MW 700 MW 3,000 MW All solar systems in IOU areas except new homes Solar systems on new homes in IOU territories All solar systems in POU areas All of California 5
California Solar Initiative (CSI) California has (not counting RPS): Photo: Don Schramm, P-H-D EnterprisesStadt, 7.74kw STC, May 06, 2008, Stevenson Ranch 6 Over 680 MW installed PV Over 68,000 solar installations Over 2/3rds of nation s solar market A rebate program that funds solar installations on the customer-side of the meter: Launched in 2007 But built upon CA solar rebate programs available since 1998 A growing solar market: Over 1,000+ solar contractors Installations growing at 30-40%+/year A range of solar policies: Net Energy Metering Interconnection Tiered Rate Structures + other policies for wholesale solar
Key Aspects of CSI Program Design Statewide eligibility guidelines Warranty Requirements Eligible Equipment Performance-Based Rebates Incentives paid based on expected or actual performance Incentive payments adjusted based on the design installation characteristics Declining Incentives Rebate levels drop based on program demand, not calendar dates or budget availability 7 Photo: Brian Peterson, Sierra Nevada Brewing Company, Chico, CA California Solar Initiative Funded System, 1,258 kw, September 2007 Installer: Chico Electric
CSI Incents Performance Expected Performance-Based Buydown (EPBB) (Paid in dollars/watt) 8 Performance-Based Incentive (PBI) (Paid in cents/kwh) Ideal for residential and small business customers Ideal for larger commercial, government & non-profit customers Systems less than 30 kw Mandatory for all systems 50 kw and greater Systems less than 50kW can opt-in to PBI Incentive paid per Watt based on your system s expected performance (factors include CEC-AC rating, location, orientation and shading) Incentive paid based on the actual energy produced by the solar system, measured in kilowatthours One-time, lump sum upfront payment 60 monthly payments over five years
Comparison of Actual and Expected Performance Source: Itron, 2009 CSI Impact Evaluation 9
Incentives decline as demand grows: CPUC General Market Program has a goal of 1,750 MW PBI: Paid based on actual output over 5 years /kwh $/watt As of November 5, 2010 PG&E: Step 8 SDG&E: Step 8 Res Step 7 Non-Res SCE: Step 5 Res Step 7 Non-Res 10 EPBB: Paid upfront based on expected output using installation design characteristics
Plug for www.californiasolarstatistics.com 11
Cost Distribution for Large and Small Systems 12
CSI Applications by Month 13
Installed Solar Projects (#) by Year thru 2009 Data: Installed Solar PV projects at Customer-Sites by year in California s Investor-Owned Utility Territories (PG&E, SCE, SDG&E). Does not include projects in publicly owned utility territories. Does not include wholesale PV projects or any projects used to directly serve utility load, such as Renewable Portfolio Standard projects. Source: California Public Utilities Commission, April 2010. 14
CSI Progress Towards 1,750 MW Goal Program is roughly half way to the goal of installing 1,750 MW (23.5 % installed and 26.5 % pending) MW MW Source: www.californiasolarstatistics.ca.gov, November 5, 2010 15
CSI Program Data All CSI Projects Installed Projects Applications Capacity (MW) Incentive $million 39,160 415.6 MW $848.9 M Pending Projects Applications 12,284 Capacity (MW 460 MW Incentive $million $625.5 M Total CSI Activity Applications 51,364 Capacity (MW) 875.8 MW Incentive $ million $1,474.5 M Source: www.californiasolarstatistics.ca.gov, November 8, 2010 16
How long will CSI rebates be available? Stay tuned! In Decision (D.) 10-09-046, issued on Sept 23, 2010, CPUC ordered that, beginning December 22, the CSI Program post weekly updates indicating: Remaining budget for incentives How far toward the original CSI program goals we have reached Estimate of how far the funding will last through the step table. 17
Other CSI Program Components Single-family Affordable Solar Homes (SASH) Program Provides higher rebate to low income customers in deed-restricted single-family residences Large workforce development component Multifamily Affordable Solar Housing (MASH) Program Provides higher rebate to multifamily affordable housing in deed restricted multi-family residences Provides access to Virtual Net Metering pilot tariff for splitting bill credit RD&D Program (www.calsolarresearch.org) Provides up to $50 million in a program for projects related to CSI goals First round solicitation proposed award winners announced Second round of funding proposals will be announced in July CSI-Thermal Program New in 2010: Provides up to $350 million for solar water heating and solar heating/cooling technologies Started accepting applications in May 2010, replaces a San Diego pilot 18
CSI-Thermal Program What is the CSI-Thermal Program? Statewide effort to transform the market for Solar Water Heating and other solar thermal through rebates, standards, training and marketing 19
CSI-Thermal Program Rebates are now available! CSI-Thermal Program began offering rebates to single-family residential customers on May 1, 2010 Average rebate is $1,500 for system that displaces natural gas and $1,000 for system that displaces electricity Incentives became available to multi-family and commercial customers on October 1, 2010 Applications for low-income housing and non-water heating thermal technologies likely early next year 20
CSI-Thermal Online Application CSI-Thermal features an automated, online application designed to save time for contractors who use the program. 21
CSI-Thermal Program Requirements Systems must be certified by the Solar Rating and Certification Corporation (SRCC) Contractors must be licensed by CSLB Contractors or self-installers must become eligible to participate in the program by attending a one-day training class Equipment must be new and include a 10-year warranty 22
Rebates Total of $305.8 million in rebates structured to drive market transformation Incentives start high to encourage market entrants, then decline to foster competition Incentives start at about $1,500 for a single-family system gasdisplacing system and decline in 4 steps to $550 for the same system Incentive declines are triggered by growth on the natural-gas side of the market Rebates are based on system output to encourage efficient, well-performing systems 23
Rebates Rebates split between two customer classes 40% of rebates set aside for single-family residential class Multi-family/commercial class may use up to 60% of rebates Capped at $500,000 per system Large systems more cost-effective, but small systems have more market transformation potential Residential class is thus protected to try to grow the market 24
Rebates Natural Gas 25 Step Rebate for average system Maximum rebate Incentive per therm displaced Funding amount 1 $1,500 $1,875 $12.82 $50 M 2 $1,200 $1,500 $10.26 $45 M 3 $900 $1,125 $7.69 $45 M 4 $550 $687.5 $4.70 $40 M
Rebates Electric 26 Step Rebate for average system Maximum rebate Incentive per kwh displaced 1 $1,010 $1,263 $0.37 2 $820 $1,025 $0.30 3 $600 $750 $0.22 4 $380 $475 $0.14
Track Our Solar Market Progress Annually: Reports to CA legislature www.cpuc.ca.gov/puc/energy/solar/ Quarterly: Public CSI Program Forums in person meetings www.cpuc.ca.gov/puc/energy/solar/forum.htm Monthly: Go Solar California! Newsletter www.gosolarcalifornia.ca.gov/news/ Weekly: All program data available each Wednesday www.californiasolarstatistics.ca.gov 27
Thank You Damon Franz California Public Utilities Commission Energy Division df1@cpuc.ca.gov