Are people who don’t own homes being left out of the solar energy revolution? A bill that’s making its way through the Legislature in California will expand the public’s access to solar energy by making it easier for renters and others to buy electricity from clean power.
The bill, SB 843, aims to enable people who don’t own homes, or own homes that don’t have suitable roofs for solar panels, to buy clean power and offset their utility bills. They could sign contracts with owners of solar power projects for a portion of the power produced, and the amount they pay for would show up as credits on their utility bills. The proposed program would be available not only to consumers but also businesses who are customers of the three big investor-owned utilities.
“We believe it’s possible for everyone to buy renewable energy and save money from day one and do it without state subsidies,” said Tom Price, director of policy and market strategy at San Francisco-based solar power project developer CleanPath, which has helped to draft the bill’s language.
The Senate has passed the bill, which is making its way through the Assembly, and it could land on Gov. Jerry Brown’s desk by the end of August, Price said. The legislation would create a 2 gigawatt-sized program.
California already runs several incentive programs to subsidize solar installations at homes and businesses. At over 1 GW, the state has more solar electricity flowing from these residential and commercial rooftops than any other state in the country, according to a report issued by the California Public Utilities Commission on Monday.
Just for the wealthy?
But SB 843’s proponents say the state can do more because many of its residents aren’t able to take advantage of the rebate programs. There is a perennial debate over whether the programs are benefiting mostly wealthier residents. They can afford to pay the expensive solar electric systems out right, or have the good credit scores to borrow money to finance the installation. Since installers tout energy savings in their sales pitches, they target people who use a lot of energy and pay high electric rates.
The state’s programs do include subsidies for low-income housing, however, and the latest data show that solar is becoming more affordable for average consumers. The number of solar systems installed in the low-income market, in which the median incomes is less than $50,000, has increased by 364 percent since 2007, the new commission report said. The installation figure for the middle-income market, in which the median income runs between $50,000 and $100,000, has jumped 445 percent during the same period. The majority of the incentive applications received by the state in 2011 came from this middle-income segment.
The program created by SB 843 wouldn’t be eligible to use money that’s budgeted for existing solar incentive programs, Price said. Project developers could still claim a 30 percent federal investment tax credit, which is good through 2016. Each project can be as large as 20 MW, a size that is meant to provide an economy of scale to keep its development and construction costs down while encouraging its owner to build it closer to their customers. Utilities can own projects under the proposed program.
The customers most likely won’t personally use the solar electricity in their contracts. Instead, they get credits for the energy they pay for, and that amount of electricity flows into the electric grid. The credits will only offset the generation cost that appears on each utility bill, so people will still have to pay other costs, such a transmission and distribution.
This rule is designed to address a criticism of an existing solar incentive program that allows homeowners to get retail pricing for the solar electricity produced by their rooftop systems and avoid paying corresponding transmission and distribution charges. Utilities have maintained that they should continue to collect these costs because they still have to maintain the grid at all time to send electricity to people’s homes at night or whenever their solar electric systems aren’t producing energy.
The idea of buying solar electricity without worrying about the equipment’s cost and location already has spawned novel business plans. Turning to crowd-funding to pay for solar installations is one such model. In some cases, you can pay to become one of the investors of a solar power project and receive a return on the investment over time.