New State Law Seeks to Create Jobs by Supporting Solar Energy

March 8, 2010

by Ariane Lange

A new state law authored by a state assembly member from Berkeley aims to foster the solar energy industry and generate jobs by increasing the amount of solar electricity that utility companies can purchase from customers.

The law, which was signed Feb. 26 by Gov. Arnold Schwarzenegger and authored by State Assemblymember Nancy Skinner, D-Berkeley, seeks to “send that right market signal” to elicit investment in solar energy, which in turn generates local jobs, Skinner said.

The law doubles the cap on electricity that qualifies for net metering, whereby utility companies credit customers for excess electricity generated by their solar panels.

“You want to get the benefit of all the electricity you’re generating,” Skinner said.

California electricity meters currently run backward during the day in buildings where solar panels are producing more energy than the building is using. That excess energy goes back to the utilities company, which gives the owner of the solar panel an electricity credit.

Currently, utilities companies purchase up to 2.5 percent of the kilowatts used when electricity demand is greatest-typically hot summer afternoons. But that number will increase to 5 percent when the law takes effect Jan. 1, 2011.

Skinner said earlier drafts of the bill set the cap at 10 percent of peak usage demand. But energy companies balked at the higher number, said Adam Browning, executive director of the Vote Solar Initiative, an organization that supported the bill.

But Skinner said a cap is not necessary, and that most states with net metering programs have no caps or caps much higher than 5 percent.

PG&E Spokesperson Cindy Pollard said because net metering customers pay lower electricity bills, the cost of installation rebates, waivers for grid connection fees and other subsidies provided to solar customers are disproportionately paid for by non-solar customers. If the new law results in an increase in net metering, she said the shift in costs would also increase.

“We had to do a lot of negotiating with the utilities to get them to support this,” Browning said.

Though the new law raises the cap on net metering from the current 2.5 percent, Skinner said the state does not yet have enough solar panels to meet the existing cap. As of Jan. 1, PG&E came nearest to the quota, supplying about 1.5 percent of energy from net metering, according to Pollard.

Dave Llorens, CEO of One Block off the Grid, a solar energy company based in San Francisco, said solar incentives programs are often shortsighted, which was the problem with the previous cap. The new cap is less shortsighted, he said.

“You can’t build industry with (a 2.5 percent cap),” he said.

He added that though he would have preferred a higher cap, the new law would give solar companies “more runway” to keep expanding.

Sara Birmingham, director of western policy for The Solar Alliance, an organization that supported the bill, said she was pleased with the amount of support the bill ultimately received.

“I think people started to realize that this was really about jobs,” she said.

Jeanne Pimentel, who had solar panels installed in her home through the Berkeley FIRST solar program, said she is happy that solar incentives in California are growing.

“I’ve been interested in solar for a long time; I believe in it in principle,” she said. “But I couldn’t afford it.”