Calif Governor Signs Solar-Power Feed-In Tariff Bill Into Law
October 12 2009 - 12:17AM
Dow Jones News
California Governor Arnold Schwarzenegger signed legislation
Sunday that will create a European-style above-market tariff,
called a feed-in tariff, for small solar-panel generators.
California's abundant sunshine, relatively high utility rates
and solar subsidies have already made the state one of the world's
top solar markets. The proposal seeks to expand the market by
requiring California utilities to buy power from solar-panel
generators of 1.5-3.0 megawatts in size, at set rates above what
the utilities would pay for wholesale power from conventional
sources.
Some solar companies said the bill's pricing scheme would create
a feed-in tariff of about 15 to 17 cents a kilowatt-hour, which
they said wouldn't be high enough to spur significant investment.
But others said the program would create opportunities for
lower-cost projects for which there isn't currently a market.
Supporters of the legislation, including the California Solar
Energy Industries Association, said the bill's feed-in tariff will
be high enough for schools, local governments, farms, warehouses
and other low-cost property owners to take advantage of it.
Suntech Power Holdings Co. Ltd. (STP), SunPower Corp. (SPWRA),
Applied Materials Inc. (AMAT) and other companies have pointed to a
separate effort at the California Public Utilities Commission to
establish a feed-in tariff-type program as more viable.
The CPUC staff has proposed requiring the state's three large
utilities, owned by PG&E Corp. (PCG), Edison International
(EIX) and Sempra Energy (SRE), to collectively buy 1,000 megawatts
of power from solar-panel generators sized between 1 MW and 20 MW
over four years through "reverse auctions" in which they would pick
the projects with the lowest bids to meet their requirements. The
agency is still reviewing proposals for the program and could make
a decision sometime next year.
In a letter to the state Senate on Sunday, Governor
Schwarzenegger said he was signing the bill because the state "will
need to use all of the tools available" to meet its goal of using
renewable sources for a third of electricity sold by utilities by
2020.
The CPUC should proceed with its own feed-in tariff program, he
said.
-By Cassandra Sweet, Dow Jones Newswires; 415-269-4446;
cassandra.sweet@dowjones.com