California's Public Utilities

Commission has voted to create

the largest solar program of its

kind in any state in the U.S. The

ten-year California Solar

Initiative will provide US$2.9 bil-

lion to accelerate the transition

to clean energy and to reduce

the consumer costs of solar elec-

tricity. The goal is to increase the

capacity of installed rooftop PV

panels by 3,000 MW by 2017.

The Solar Initiative includes $2.9

billion in rebates which will

decline steadily over the decade,

with funds coming from electric

and gas distribution customers

of investor owned utilities to

fund installation of solar PV at

the start, with solar thermal

water heating and solar heating

and cooling systems being

added later. The California

Energy Commission will oversee

a component of $350 million

which will focus on builders and

developers of new housing, to

encourage solar installations in

the residential new construction

market. The PUC will oversee

the majority of $2.5 billion to

cover existing residential hous-

ing, as well as commercial and

industrial properties. The pro-

gram sets aside 10% of pro-

gram funding for low income

customers and affordable hous-

ing installations. The PUC will

explore the option of offering

low cost financing options to

those types of installations in

workshops this year. The pro-

gram includes an additional

amount of up to 5% of the

annual budget for potential

R&D, with emphasis on demon-

stration of solar and solar relat-

ed technologies. It also includes

a requirement that solar incen-

tives be made not just for

installed capacity, but also with

emphasis on the performance

and output of solar systems, and

requires all facilities that receive

an incentive to undergo an ener-

gy efficiency audit to identify

cost effective energy efficiency

investment options. The incen-

tives will go to solar PV and

solar thermal electric projects

under 1 MW capacity, with an

initial PV level of $2.80 per watt

to be reduced by 10% each

year. The incentive for solar ther-

mal electric and solar space

heating will be determined this

year. Electricity customers will

pay an average of $12 a year

and residential natural gas con-

sumers will pay $1.40. The total

impact on residential bills will be

minimal because the cost of the

solar program will be offset by

the 2007 expiry of a surcharge

on utility bills to repay rate

reduction bonds authorized in

1996 for electric sector restruc-

turing. The California program is

the second largest in the world,

after Germany, and the Vote

Solar group estimates the initia-

tive will result in a net positive

benefit for California of $1.2 to

$18.2 billion, depending on the

cost of avoided power and time-

frame, and would create 39,948

to 61,458 job-years by 2026.

Elsewhere in the State, the

California Academy of Science

will soon also be the home to the

largest photovoltaic (PV) solar

energy glass canopy in the coun-

try. Barnabus Energy, Inc., a

California-based company that

specializes in renewable energy

projects, has just been contracted

by The Academy to develop and

install the system as part of an

extensive rebuilding project in

Golden Gate Park, a contract

worth over $1.5 million. The new

system will generate in excess of

213,000 kW of electricity per

year. www.cpuc.ca.gov

General NEWS

4 reFOCUS January/February 2006 www.re-focus.net

Billion dollar solar programfor California

New wind in SouthernCalifornia on Indian land

The 50-MW Kumeyaay Wind

Farm began commercial opera-

tion in Southern California in

mid-December 2005 following

more than two years of challeng-

ing federal and state regulatory

hurdles. Billed as the largest

wind farm on American Indian

land, Superior Renewable Energy

of Houston, Texas developed the

project with financial backing

from GE Energy Financial Services

and Babcock & Brown. The wind

farm is now selling power to San

Diego Gas & Electric Co. The 25

Gamesa 2-MW turbines are

expected to produce 100,740

MWh and $8 million annually in

revenues. Furthermore, the wind

farm will save approximately

110,000 tons a year in green-

house gas emissions. The wind

contract, the third largest in

SDG&E's renewable resource

arsenal, will help the utility meet

its state-mandated target of sup-

plying at least 20% of its cus-

tomers' electricity from renew-

able resources by 2010.

Superior Renewable Energy shep-

herded the project through a

myriad of federal and state regu-

latory agencies, including the

Bureau of Indian Affairs, the trib-

al councils of the Kumeyaay and

Campo Indians, and the

California Public Utilities

Commission. Located on the

Campo Indian Reservation atop

the Tecate Divide 70 miles east of

San Diego and 18 miles north of

the Mexican border, the wind

farm was constructed in eight

months, plus a month of testing.

GE Energy Financial Services

invested $51 million and will get

the Federal production tax credits

and depreciation. Babcock &

Brown contributed cash, will

retain a substantial equity interest

and remain the long-term man-

ager. Getting leasing approval for

the 1,600 acres from the Bureau

of Indian Affairs which adminis-

ters Indian lands, presented the

greatest challenge due to its

complex bureaucracy. Another

nine months was spent comply-

ing with National Environmental

Protection Act regulations and

included avian, biological and

archeological reviews.

In contrast, obtaining the

required transmission intercon-

nection study with the California

Independent System Operator,

and a power purchase agreement

with SDG&E "was a piece of

cake," said John Calaway, CEO

of Superior Renewable Energy.

Negotiations with SDG&E began

in Nov. 2003 and the power pur-

chase agreement was signed in

June 2004. However, the

California Public Utilities

Commission rejected the contract

the first time around because

commission staff believed the

bilaterally negotiated contract

conflicted with new procurement

rules. However, once the time-

line during which negotiations

took place was clarified the com-

mission approved the contract in

Oct. 2004. The Indian tribes

received a $1 million payment

when the project commenced

operations and they will receive

revenues of approximately

$350,000 annually, providing a

substantial economic stimulus to

the low-income community.