California PUC considering higher rebate level for tax-exempt entities

The California Public Utilities Commission (CPUC) issued a ruling in July directing the California Solar Initiative (CSI) program administrators, including Pacific Gas & Electric, Southern California Edison and the California Center for Sustainable Energy, to stop issuing CSI incentive reservations for new applications seeking government/non-profit incentives and performance-based incentive (PBI) applications (the PBI incentive structure applies to solar projects larger than 30 kilowatts). Any government/non-profit or PBI applications received after July 9, 2010, will still be reviewed for completeness, but will be queued for reservation processing on a first-come, first-served basis after the CPUC takes action on the ruling’s proposed modifications.    

Through June 23, 2010, the CSI Program had received 764 megawatts of applications for over 42,000 new solar projects. The goal of the CSI Program is to install 1,750 megawatts of solar energy systems by 2016. Due to unexpected participation rates and mistaken assumptions about the types of incentives applied for, the CPUC is concerned that the CSI budget could be depleted before the CSI achieves its megawatt goals.

To combat budget exhaustion, CPUC is considering three main incentive system modifications. First, CPUC may adjust or remove the discount rate built into the PBI incentive payments. Second, and most significantly for public agencies, the CPUC may establish a higher rebate level for tax-exempt entities such as government and non-profit institutions. Due to considerable decreases in the cost of solar equipment in the last few years, an increase in the CSI incentive level available to public agencies could have a significant impact on the overall cost of solar projects for public agencies. Third, the CPUC ruling issued proposes to shift $20 million in program administrative funds to the incentive budget. This would increase the total amount of incentives available from $1,707,000 to $1,727,000.

A copy of the CPUC Ruling is available by clicking here.  

Source: Best Best & Krieger LLP, Sophie A. Akins


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