It's a great day to start a blog!

My day began with the fantastic news that Governor Schwarzenegger signed in two important bills this week that increase incentives to invest in solar energy.  AB 920 changes the current net-metering law to require utility companies to buy back annual energy surplus from customers who generate it via solar panels.  This is a huge step, one that many debated could happen at all.

When you install solar panels on your home, the energy generated rolls back your electricity meter averaged over a year of usage.  Because more power is often consumed in months with the least amount of sunlight, this averaging allows your summer sun to pay for your winter heat.  Prior to AB 920, if your system generated more power than you used, the utilities essentially got that power for free.  At the end of the year your balance went back to zero.

Now the utility companies have to pay for ALL your power, at a rate determined by the California Public Utilities Commission. This is a huge step!  It means that you can earn money by not using power!   It will also encourage investment in ample or oversized systems for those who can afford them, those who want to offset their carbon footprint, those who live is especially sunny areas like the desert, and those who use certain buildings on a part-time or seasonal basis.

The second bill, SB 32, expands the “feed-in tariff” system approved by the California Public Utilities Commission in early 2008.  The system as originally approved by the CPUC allowed the government to regulate the rate that utility companies pay for private power generation from facilities up to 1.5 megawatts in capacity.  Under the CPUC program private customers are paid only a market rate for their solar power, essentially exchanging the cost of “brown power” for that generated with solar cells. Some feel that this incentive is not good enough and does not accurately take into account the benefits of this clean power.  Not only is the energy produced with fewer resources, but because the solar cells can be located closer to the user, there can be less energy required for transmission.  That only 14MW have been installed under the CPUC program since it began is an indicator that these critics are correct.

SB32 changes the way the pricing structure is determined, adding in environmental and distributed generation attributes in the tariffs, which are now determined by avoided cost, and not just current market rate.  It also doubles the capacity covered, so that facilities up tp 3 megawatts now fall under this umbrella.
The hope is that these changes will encourage both private investors and utilities themselves to build solar facilities.  There are successful examples in Europe, where feed in tariffs have been in place for some time.  Germany has had exceptional success, in part due to the over market price German utilities pay for private generation of clean power.

Lets hope the results of these incentives follows Germany’s example!
Ontario recently launched a similar but much more aggressive program, considered to potentially turn Ontario into a “green-energy titan.” Their program allows private producers of solar electricity to earn up to 80.2 cents per kilowatt for solar power (wow!) and between 11-19 cents for other forms of green power such as wind farms, biogas facilities and mini-hydro plants (the exchange rate from Canadian to US dollars is almost 1:1).  This is a huge step in moving Canada towards their impressive goal of shutting down all coal plants by 2014.  Go Canada!