Solar Power Gets $2.85 Billion Lift From California
By REBECCA SMITH
Staff Reporter of THE WALL STREET JOURNAL
January 13, 2006; Page A2
A divided California Public Utilities Commission authorized creation of the nation's largest solar-power program, committing utility customers to fork over $2.85 billion over the next 11 years to subsidize the installation of 3,000 megawatts of new solar capacity.
The goal is to create enough electricity on sunny days to idle six large power plants, lessening the state's dependence on fossil fuels and reducing related pollution. But the price tag is generating criticism.
The program was approved only after Gov. Arnold Schwarzenegger made a last-minute appointment to the commission. Rachelle Chong, an attorney and former member of the U.S. Federal Communications Commission, cast her first vote on the state panel in favor of the measure. Mr. Schwarzenegger has been an ardent supporter of solar power.
Under the program, eligible residential or commercial solar installations would receive an initial subsidy of $2.80 a watt of capacity. That is enough to cover 25% to 30% of the cost of the average residential installation, which can run $10,000 or more. The subsidy would drop to 25 cents a watt in the final year, 2016, in expectation that system costs would have dropped by then. The program is expected to increase average residential utility costs, for customers of the state's big investor-owned utilities, by about $1.10 a month.
California has more solar capacity than any other state, at 1,200 megawatts, but embarked on a path to boost its renewable portfolio and encourage conservation after the state's energy crisis of 2000-2001. Since then, the commission has taken to heart scientific evidence assigning to the power industry partial responsibility for global warming. As a result, it opposes utility development of conventional coal-fired plants, even in neighboring states.
Michael Peevey, president of the state public-utilities commission, said the solar program is intended to support "a sustainable solar-power industry" able to make continued strides in solar-panel efficiency and cost. Mr. Peevey said that "this is the time to assert California leadership on solar. We can't turn our backs on this."
Solar-power executives applauded the program, though the industry has been growing so fast that it has had trouble, at times, finding enough silicon to make solar panels. Howard Wenger, executive vice president of PowerLight Corp. in Berkeley, Calif., which designs and installs solar systems, said the program "provides funding certainty that will encourage the industry to ramp up."
Commissioner Geoffrey Brown, who voted against the initiative, said he objected to the "huge new subsidies" and cost to ratepayers, who already are paying some of the highest rates in the nation. He said the commission hadn't done an adequate job of looking at alternatives that might have produced the same benefit at lower cost. "We put our enthusiasm before our prudence," he said.
Despite the cost, the commission said it received a record 50,000 letters or emails in support of the solar initiative. |
