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July 07, 2012

It’s Time To Strengthen California’s Solar Feed-in-Tariff

Posted In | By Shaun

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The Clean Coalition and Sierra Club of California filed a petition demanding that the California Public Utilities Commission (CPUC) reconsider and strengthen its planned implementation of a feed-in-tariff (FiT).  Solar Done Right applauds this petition and encourages the CPUC to implement a more robust FiT. Local clean energy advocates believe that the CPUC’s late May decision on how to implement California SB 32—a law passed in 2009 requiring CPUC and utilities to expand FiT programs in the state—failed to address the law’s requirements and does not fairly compensate ratepayers for the value of distributed generation. 

Specifically, the petition notes that the FiT formula in the CPUC decision does not recognize one of the greatest benefits of rooftop solar installations to other utility ratepayers—the avoidance of new transmission and distribution costs, which are required when the utility companies invest in expensive and remote power plants far from the point of use.

The petition calls out CPUC and the utilities for failing to implement the right policies to encourage local clean energy, pointing to Germany as an example of how robust feed-in-tariffs have encouraged 15 times more solar installations than California in just one year, even though California gets far more sunshine. 

Utility companies continue to pose a barrier to the deployment of distributed generation and the use of existing FiT programs. Southern California Edison’s own FiT program—known as CREST—has only brought 5.25 megawatts of new projects online out of a total program capacity of 200 megawatts, four years after the program began, in part because of a punitively low FiT rate and administrative delays by the utility company.

California has already installed over 1,200 megawatts of rooftop solar panels, with a significant number of installations in median income neighborhoods, despite weak incentives.  Making local clean energy available to all interested ratepayers requires a healthy FiT program that favors individuals over utility companies, and fully recognizes the considerable benefits of distributed generation. 

Ratepayers have long been subjected to poor utility company decisions to buy power from remote locations, contributing to the destruction of our environment and requiring unnecessary and expensive new transmission lines.  Ratepayers that generate clean energy and share that with the grid should have equal access to cost recovery since they generate higher quality power while avoiding costly new transmission lines.

Solar Done Right supports a FiT rate of 25 cents per kWh in the first 2 years targeting systems under 100 kW, with tiered reductions every 2 years thereafter, with a goal of installing 3,000 MW per year contracted over 15-20 years.  This rate establishes a fair rate of return to interested ratepayers and will result in rapid conversion to a clean, decentralized, dynamic and reliable grid while ensuring that rates do not increase for non-generating ratepayers. This rate is high enough to stimulate interest and motivate the vast segment of ratepayers who are eager to be a part of the renewable marketplace.  By comparison, utilities in California are paying as much as $1.88 per kWh on the market at peak demand, benefiting corporate power generates hundreds of miles from our communities.  A robust FiT that encourages more distributed generation could help our communities meet daytime power needs while employing tens of thousands more people in the state, boost property values, and meet renewable portfolio standards (RPS).

Fairly compensated, residential-scale solar should be the first priority of the state of California and the CPUC.  A robust FiT would also encourage the rapid establishment of “community solar gardens” for renters and lower income participants under SB 843, and encourage conservation of electricity and civic engagement - all policy goals at the state level.  Monies paid to ratepayers injects resources directly into communities, creates local jobs, increases property values and generate multiplier effects that will set our economy and tax base back on track.

With distributed generation, we have the opportunity to generate clean energy at the point of use and give our wildlands a break from further destruction caused by an increasingly costly, destructive and inefficient remote industrial solar, wind and transmission power infrastructure.  It is time for CPUC and our utility companies to encourage—not obstruct—our transition to local clean energy.

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