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Solar Mandate? Like it or Not, Consumers Pay

Fortnightly Magazine - December 1998

1996 restructuring law earmarked $54 million for "emerging renewables." The consumer buy down program for rebates may finance as many as 20,000 residential PV rooftop systems, or 32 MW, starting in 1998. %n3%n Using part of the first year's $10.5 million to finance several large and medium-sized PV projects in early 1998, the California buy down program has $6 million available for small PV system (under 10 kW). These PV systems qualify for a $3-per-watt rebate. The $6 million in 1998 could finance 1,000, 2 kW PV systems for residential use. The customer rebate then moves to $2.50 per watt. Eventually, the rebate is $1 per watt rebate as PV prices are expected to decline. %n4%n

Leveraging the California rebate is the Green Mountain Solar offering to IOU residential consumers, by Green Mountain Energy Resources. %n5%n The PV systems offered under the program cost between $9,500 and $13,500 each. GMS offers financing packages. The PV systems also would be net metered under the 1995 California law allowing residential customers to offset their rate by allowing the electric meter to spin in reverse when the customer is producing power onto the grid. Net metering laws or regulation, following California's lead, have arisen in 10 states. %n6%n

According to GMER, the net metered PV produces 20 to 50 percent of a residential consumer's electricity, at a projected cost of $30 monthly. That's after allowing for the electricity generated and consumed by the PV systems on site and considering the tax savings for financed systems. %n7%n Applied Power Corp., a solar electric system integrator, %n8%n is receiving UPVG TEAM-UP cost-shared funds for its crystalline and thin-film PV arrays used by Green Mountain Solar. Besides the PV electricity produced on the customer site, the cost projection assumes tax savings for home equity-type loans.

California has the nation's leading solar utility, Sacramento Municipal Utility District. It produces a quarter of the solar cells manufactured in the world.

Operating more than 5 MW of PV, including 450 residential and commercial "PV Pioneer" rooftop systems, SMUD has reduced PV prices 9 percent annually by "sustained, orderly" utility bulk purchases. %n9%n

While the competitive retail electric market opened slowly in April 1998 with small IOU customers offered "green market" premium rates from renewable power supplies, %n10%n the PV buy down rebate program assumes that declining PV costs will increase demand for solar energy systems and accelerate solar technology acceptance.

Rhode Island. As the first state to move to a competitive market in August 1996, Rhode Island's law established a "wires charge" or SBC to support renewable energy technologies and energy efficiency programs. The five-year SBC of 2.3 mills per kWh of electricity sold raised $19 million in 1998. Next door in Massachusetts, the new 1 mill SBC raises $40 million for renewables.

SBC funds were used to study potential renewable energy sources in Rhode Island and Massachusetts in 1997. The study found that 50 to 75 grid-connected PV systems provide 0.3 MW, with a potential of 250 MW from PV by 2017. %n11%n

Approved and proposed solar projects from the