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Gov. acts to salvage solar in California

Legislative deal will lower electricity rates linked to state rebates. Installations fell as law's fine print added costs.

May 10, 2007|Marc Lifsher | Times Staff Writer

SACRAMENTO — Gov. Arnold Schwarzenegger announced Wednesday he is moving quickly to fix an unintended glitch that threatened to pull the plug on his ambitious Million Solar Roofs initiative.

Requests for rebates have plummeted this year, after a new law inadvertently made it uneconomical for many homeowners to put electricity-generating solar panels on their homes. Solar equipment installers have complained that business is tanking.

The governor said he'd reached a deal with key lawmakers to rush a bill through the Legislature that would drop a requirement that rebate applicants sign up for costly pricing plans from the state's three investor-owned utilities.

"Last year's legislation had an unintended flaw we are seeking to immediately fix so we can maximize Californians' participation in the program," Schwarzenegger said in a statement released by his office late Wednesday.

The agreement came Tuesday at a meeting called by the governor's office, attended by representatives of the solar installation industry, environmentalists and electricity regulators.

At issue has been fine print in the governor's solar bill, which took effect Jan. 1. It forced applicants for government solar rebates to purchase expensive supplemental electricity contracts on a "time of use" basis.

The utilities charged homeowners more for electricity consumed during times of peak demand, such as hot summer afternoons.

As a result, some homeowners, particularly those people living in the desert regions served by Southern California Edison Co., complained that they were being penalized for investing in solar systems and would save less on their electric bills than they expected.

In the worst cases, people who run air conditioners for long periods could pay more with solar panels on their roofs than they'd pay without them.

Many solar installers blamed confusion about cost savings for their difficulties in closing sales.

Industry experts said applications for state solar rebates dropped more than 70% in the first three months of the year compared to the same period in 2006.

The deal worked out by the governor's office directs the California Public Utilities Commission to vote in June to allow prospective owners of solar energy systems access to the lower rates charged non-solar utility customers. The plan would be in force for two years.

In the meantime, new rates would be developed as part of the PUC's next general ratemaking cases for Edison, Pacific Gas & Electric Co. and San Diego Gas & Electric Co., beginning in 2009.

One lawmaker who worked on the compromise, Sen. Jim Battin (R-La Quinta), said he was hopeful that the new rates "will make it financially feasible for desert homeowners to use the program."

Long Beach solar installer Patrick Redgate praised the governor's compromise for making it easier to persuade homeowners to spend $10,000 or more on a system. "I do believe this will eliminate a big roadblock to our sales and ability to make estimates on energy savings," he said.

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marc.lifsher@latimes.com

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