CSI Phase II: R Solar for Affordable Housing CPUC Intent: Set aside a “minimum” of 10% of budget $216.8M Solar Economics Less Compelling to CARE-Households A solar PV electrical system costs $18,000 for a 2 kW system. Many CARE households do not own their dwellings. CARE households receive discounted electric rates. Defining Eligibility for Low Income/Affordable Solar Initial plan: Target CARE and LIEE-eligible households. AB 2723 (Pavley): changed definition limiting eligible population CPUC proposed legislation to broaden Pavley definition. CSI Two-Prong Approach Track 1: Immediately reach out to CARE-eligible home-owners Track 2: Study how to reach CARE-eligible tenants of multi- family dwellings.

Solar for Affordable Housing Track 1: Single Family Dwellings Staff Proposal: Issued in April Recommended an incentive program targeting existing low-income single family owner- occupied dwellings. Goal: Provide access to PV systems for low-income, owner occupied, single-family homes to decrease electricity use and electricity bills without increasing monthly household expenses. Objectives: Maximize the number of households served and Maximize energy bills savings.

Solar for Affordable Housing Track 1: Single Family Dwellings Strategies: Create an incentive structure that renders the economics of solar systems attractive to low-income households. Deliver low-income incentives and install PV systems beginning a few California regions. Create a marketing and outreach program that targets low-income customers. Create an education program on solar technology and energy efficiency.

Solar for Affordable Housing Track 1: Single Family Dwellings Incentive and Financing Structure: Mirror the CSI for performance and Time of Use requirements. Incentive structure should correspond to the actual economics of solar for a given household. Base the incentive level a low income household may receive on a household’s CARE eligibility and the household’s estimated federal tax liability. Other Recommendations: Create partnerships with housing agencies to finance loans and explore more flexible loan options. Require energy efficiency audits as part of the application process.

Solar for Affordable Housing Track 2: Multi-Family Housing CSI Administrator Proposal: Issued in July Proposed an incentive program for qualified affordable multifamily housing projects. CSI Administrators: PG&E, SCE, and the California Center for Sustainable Energy Guiding Principles: Foster a sustainable solar market; Promote energy efficiency; Share benefits and instill a sense of ownership; Promote financial efficiency; and Simplify program administration.

Solar for Affordable Housing Track 2: Multi-Family Housing Barriers: Affordable multi-family housing tenants do not own the buildings in which they reside; lack the upfront capital to invest in very expensive solar energy systems or major energy efficiency improvements; and have very limited discretionary funds. Affordable multi-family housing owners leverage a significant amount of upfront financing when a building is first developed and therefore may not be able to take on additional debt. Third party non-building owners are the most likely candidates for participating in this program but will have to provide economic incentives to affordable housing owners and tenants in order to use their building space for installation of solar energy systems.

Solar for Affordable Housing Track 2: Multi-Family Housing Basic Structure is a Request for Proposal (RFP) for funding of a specific solar project on a low-income multi-family dwelling. Three options: RFP with Power Purchase Arrangement RFP with Net Energy Metering with system sized to serve common area loads RFP with Net Energy Metering with individual systems for each tenant All proposals must be combined with the benefits of the LIEE program. All proposals must include an outreach and training element. All proposals must be sized such that the amount of electricity produced by the system is no more than what would be required to offset part or all of the electrical needs at the site.

CSI Phase II: R Solar for Affordable Housing Track 1 May 2007 Workshop held to discuss staff proposal and take further comments. Next Step: Proposed Decision issued by end of 2007 finalizing Track I incentive program and implementation schedule. Track 2 August 2007 Workshop held to discuss CSI administrators’ proposal and take further comments. Next Step: Implementation will not occur prior to the implementation of Track I