Legislative Update

The solar industry has emerged victoriously from harrowing legislative battles on three fronts:

1. Net metering bill AB 58 is signed into law on Tuesday, Sept. 24, 2002. Read the details ...


2. Governor Davis signed SB 1038 into law on Thursday, Sept. 12, 2002, renewing funding for the CEC Buydown program for 10 more years. More information ...


3. The state's 15% solar tax creditfor purchasers of solar energy systems escaped the budget axe. More information ...

Net Metering is here to stay

Gov. Davis signed AB 58, the net metering bill, into law on Sept. 24, 2002 after the bill unanimously passed the Assembly (78-0!) and Senate (24-11). Thanks to everyone who came together to make this happen. Special thanks to Les Nelson, Kathy Lynch, Ed Murray, and Vince Schwent for their tireless efforts to move this through the legislature in the face of strong utility opposition. Thanks as well to Kari Smith, Tor Allen, Juliette Anthony, Craig Stevens and others for their grass-roots efforts.

Read the Governor's press release about AB 58 and other energy bills

AB 58 (Keeley) extends net metering for customer/generators with photovoltaic systems sized between 10 kilowatts and one megawatt. Without this bill, net metering for those systems would have ended this year. Net metering means that the utility (like PG&E or Southern California Edison) credits customer/generators who generate excess power (meaning the electrical meter runs backwards).

The law contains these key provisions:

• True net metering at full retail value for customer/generator PV systems up to 1 MW.


• The total amount of net metering is limited to one half of one percent of a utility's peak demand.


• Net metering are exempt from "exit fees" or "departing load fees".


• Inter-class cost shifting that results from net metering is prohibited.


• Municipal utilities are allowed to permit either net-metering or co-metering, which credits customers for generation on a "time-of-use" basis for the generation value of their production.


• The California Energy Commission is required to establish a separate rebate for pubic sector affordable housing projects. The CEC may establish a rebate level of up to 75% of total installed costs for these projects.


• Legislative intent is established that the Treasurer should consider net metering and co-metering projects as sustainable building methods or distributed energy technologies for purposes of evaluating low-income housing projects.


• Projects permitted prior to December 31, 2002 and completed before September 30, 2003 will be "grandfathered" in.


• Wind energy projects up to 50 kW are permitted to net meter. (The bill already contains provisions allowing solar projects up to 1,000 kW to net meter.) This amendment also requires wind energy projects from 50 kW up to 1 MW to utilize "wind energy co-metering" which provides for time-of-use pricing and credits.

This represent a favorable outcome for solar advocates and consumers in this state!

Please read more of the background of this bill and how it affects the solar industry.

Net metering is already in place and it works. The number of large-scale PV systems for local government, schools and businesses have increased ten-fold since this law was signed last year. This is an outstanding success and a benefit to everyone who relies on the power grid.

• AB58 background
• AB 58 info on California Legislature's web site.

"Buydown Rebate" bill SB 1038 signed into law

On Sept. 12, 2002, Gov. Davis signed S B 1038, authored by Senator Byron Sher, a bill that includes the Renewable I nvestment Plan (RIP) legislation authorizing the renewal and extension of the CEC Emerging Buydown Program fund for an additional 10 years. Originally the buydown fund was authorized only through the end of 2002. SB 1038 became linked to another bill, SB 1078 - the Renewable Portfol io Standard (RPS) - which Gov. Davis also signed into law.

Under the buydown program, which has been very effective in encouraging peopl e to install photovoltaic systems, the state pays $4.50 per watt or up to half t he cost of an installed and grid-tied renewable energy system. Those who have ta ken advantage of this rebate are now generating clean electricity and sending it onto the grid, reducing the amount of electricity the state has to buy during t he afternoon peak demand periods.

Provisions in SB 1038 were also intended to eliminate the "hole" in funding o f renewable energy systems larger than 10kW and less than 30kW by raising the si ze limit of "small systems" from 10kW (the current definition) to 50kW. Systems above 30kW are also covered by the Self-Generation Incentive Program (SGIP) administered by the Califor nia Public Utilities Commission. The bill also authorizes funding for the Public Interest Energy Research (PIER) Program.

Read the Governor's press release about SB 1038 and SB 1078.
See the final version of SB 1038 on t he California Legislature web site.

Solar tax credit

The Legislature rejected suspension of the solar tax credit, SB 1849, in the final hours of wheeling and dealing to get a State budget passed. (Read the news article.) This means that the solar tax credit remains intact, and anyone who purchases solar energy systems will benefit from this 15% tax credit.

Last year, a 15% income tax credit was established for those who purchase and install a solar energy system. The Governor and others have been toying with the idea of suspending this tax credit for a couple of years as a means of balancing the state budget. Last month, solar advocates successfully lobbied to get the tax credit pulled off the suspension list. CCEnergy helped by organizing its members and other supporters - people like you - to write to their legislators and express their views. The tax credit crept back onto the suspension list but in the end was retained in the final budget.