Gov. Arnold Schwarzenegger has approved two major initiatives that will require utilities to pay consumers for generating extra power and will boost the payoff for certain solar facilities.
Homes, businesses and schools that have solar panels or wind turbines previously had no financial incentive to use less electricity than they generated. But AB 920, written by Assemblyman Jared Huffman (D-San Rafael), will encourage efficiency, supporters say.
SB 32, by state Sen. Gloria Negrete McLeod (D-Chino), requires utilities to purchase solar electricity from facilities that produce up to three megawatts and could increase installations on unused spaces such as warehouse roofs. The old limit was 1.5 megawatts.
The two bills will go into effect Jan. 1. Schwarzenegger signed them late Sunday, the last day to act on bills from this year's legislative session.
Under AB 920, the state Public Utilities Commission will set a rate for utilities to compensate customers whose solar or wind systems produce more power than they use in a year. Under California's current law, customers are not paid for any surplus electricity they feed back into the grid.
The state requires that when a consumer installs a solar power system, it be the right size to produce only enough power necessary for on-site use. Rebates from the California Solar Initiative, overseen by the utilities commission, discourage anything larger. So customers who later reduce their energy consumption often end up underutilizing their solar panels.
"The current system instills a perverse incentive for people to waste their solar electricity just so they don't give it away for free to the utilities," said Bernadette Del Chiaro, a clean energy advocate with Environment California, which sponsored the bill.
The new law could boost sales of photovoltaics, especially in regions with sunny summers. Homes that use less power than they did when their solar panels were installed -- such as those that add energy-efficient appliances, insulation or weatherproofing -- and those with children who have moved out can also benefit.
"This bill applies to individual homeowners as well as small businesses, farms, wineries, schools and even affordable housing developments," Huffman said in a statement.
Customers can either receive a check for the extra energy or have credit rolled forward on their electricity bills. Experts, however, said they should expect little profit.
