California Solar Initiative Go Solar California! Program Update Presentation to the Assembly Utilities & Commerce Committee Sean Gallagher, Energy Division California Public Utilities Commission October 30, 2007 California Solar Initiative

2 California Solar Initiative (CSI) Goals Statewide goals  3,000 MW of new distributed solar distributed generation by 2016  To create a self-sustaining solar industry free from ratepayer subsidies after 2016 Provides rebates for solar based on performance Rewards optimally-sited and maintained systems to ensure performance, maximize ratepayer return on investment CPUC portion of the statewide goal  1,940 MW in investor-owned utility territories

3 California Solar Initiative by Program Component, Program Authority California Public Utilities Commission California Energy Commission Publicly Owned Utilities (POU) Budget$2,167 million$400 million$784 million Solar Goals (MW) 1,940 MW360 MW700 MW ScopeAll systems in IOU areas except new homes New homes, IOU territories All systems in POU areas AudienceVariousBuilders, home buyers Various BeginsJanuary 2007 January 2008

4 CPUC CSI Budget Program Category Budget ($ Million) General Market Program Subtotal$1,897 Direct Incentives to Consumers$1,707 Program Administration, Marketing & Outreach, Evaluation (10%)$190 Low-Income Program (10%)$217 Research, Development, Deployment and Demonstration (RD&D)$50 San Diego Regional Energy Office Solar Hot Water Pilot$2.6 Total CPUC CSI Budget$2,167 3 CPUC Program Administrators Pacific Gas & Electric Southern California Edison California Center for Sustainable Energy (CCSE) CPUC 1,940 MW Goal 1,750 MW from general market program 190 MW from low-income rebates

5 Notes: The total refers to the MW goal of the program not including the MW that will be installed under the low- income program. Rebate reductions are triggered by MW steps, such that the incentive declines once the capacity installed reaches a pre-specified level, rather than on an annual basis. Residential & Commercial rebate steps are shown as one line, but they decline separately according to the demand in each sector. CPUC incentives decline as we work towards goal of 1,750 MW

6 SB1 Implementation Rebate program ($1,897 Million)  CPUC program design decision consistent with SB1 (December 2006): Two performance-based incentives, both incorporate time-variance Pushes most installations to monthly performance incentive by 2010 Ten-step declining incentive levels segmented by customer type “Trigger Tracker” website forewarns of impending incentive drops Energy efficiency audit requirement pending CEC guidelines 10-year warranty consistent with NSHP program $100.8 million non-photovoltaic incentives to start soon R&D grant program ($50 Million)  Focus on demonstration stage and grid-integration projects  Decision adopted in September, CPUC to issue Manager RFP Low-income incentives ($217 Million)  Single-family: Proposed decision issued in October  Multifamily incentive program – Administrator proposal

7 CSI MW Targets by Program Administrator and Customer Class PG&E (MW) SCE (MW) CCSE/ SDG&E (MW) StepMW in Step ResNon-ResResNon-ResResNon-Res Subtotal Totals Percent 43.7%46.0%10.3% Shading denotes current step.

8 Here Comes the Sun… The CSI program started slow, but demand is now robust. From Jan 1- Sept 18, 2007, we received  5,230 applications (5,109 active)  175 MW (160 MW active)  $363 Million in rebates ($320 million active) In the first 9 months alone, requests are nearing CA’s total installed solar from the previous 26 years (198 MW).

9 CSI Demand Varies by Territory

10 Interest Keeps Growing Demand continues to climb despite early transition issues and new CSI application procedures. (Half-month data)

11 Projects Are Getting Paid Paid = 9.4 MW, $25 million Reserved 1,830 Requested 2,122 Completed 1,157 CSI Applications Moving Through Application Process (January 1 - September 18, 2007)

12 CSI Total Demand Surpasses Past Requests CSI has higher demand in MW than SGIP & ERP in SGIP = Self Generation Incentive Program, funded systems >30Kw ERP = Emerging Renewables Program, funded systems <30kW 116 MW

13 CPUC is tracking a variety of program administration metrics Administration MetricResponses from all 3 Program Administrators Duration: application to payment117 – 135 days Reviewing applications: days % of applications with problems:35% - 60% Scheduling inspection:1 – 3 weeks Inspection time:½-2 hours Residential ½ hour – 4 hours Non-Residential % of “failed” inspections:30% - PG&E 10% - SCE 14%- CCSE Time from Claim Form Submission to Mailing Checks 28 – 60 days Time from interconnect application to authorization to interconnect 12 –days PG&E 39 days – SCE 36 days – SDG&E Number of installers trained since January in classes 400 companies; 850 Installers – PG&E 68 companies; 129 installers – SCE 86 companies, 667 installers – CCSE

14 Post-Launch Transition Issues Residential Demand:  Awareness of new performance requirements  Incentive drop from CEC program  Mandatory Time of Use Rates for some customers Application paperwork, speed Delayed program tools (calculator, handbook, database) Metering accuracy requirements Access for BIPV product to up-front incentive Shading calculation methodology Inspection rigor Reluctance to energy efficiency audit requirements

15 Streamline and accelerate application processing  Reduced paperwork in Sept, more reductions pending  Administrators staffed up to meet spike in residential demand Metering Requirements  Eased some metering accuracy requirements, clarified others Time of Use Rates  Delayed implementation of mandatory Time of Use Rates BIPV: allowed, revised calculator Shading: Administrators revised calculation methodology Inspection protocols: Introduced inspection tolerances Marketing and Outreach  Increased installer outreach and training  Instituted a monthly newsletter on administration changes Program Response

16 Upcoming Issues for CSI Program Streamline and accelerate application process Implement SB1 Eligibility Guidelines Monitor rate cases, mandatory TOU rates for impacts on solar economics Monitor demand by sectors & “drop-outs” Improve database and reporting tools Evaluate trends in market costs against incentive levels Solar Hot Water Pilot Underway, runs through 2008 Will inform implementation of AB 1470 (Huffman, 2007)

17 California Solar Initiative Resources The statewide consumer website The CSI Program Handbook includes eligibility information and application information: The CSI Program Administrators developed a tool to calculate the up-front EPBB incentive, known as the EPBB Calculator: The CSI Program Administrators launched an online application tool and reporting database, known as Powerclerk: csi.powerclerk.com Up-to-date information about the program's current incentive level, or "step" can be found on the online CSI Trigger Tracker: Information about the CPUC regulatory proceeding that deals with the CSI program can be found online at: California Solar Initiative: Resources