California
Incentives/Policies for Renewables & Efficiency
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Last DSIRE Review: 07/16/2009
| Incentive Type: |
Public Benefits Fund |
| State: |
California |
| Eligible Efficiency Technologies: |
Yes; specific technologies not identified
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| Eligible Renewable/Other Technologies: |
Solar Thermal Electric,
Photovoltaics,
Landfill Gas,
Wind,
Biomass,
Hydroelectric,
Geothermal Electric,
Municipal Solid Waste,
(Note: small hydro is 30 MW or less),
Anaerobic Digestion,
Small Hydroelectric,
Tidal Energy,
Wave Energy,
Ocean Thermal,
Fuel Cells using Renewable Fuels
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| Applicable Sectors: |
Commercial,
Industrial,
Residential,
General Public/Consumer,
Utility,
Institutional
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| Types: | Renewables, Energy Efficiency, RD&D |
| Total Fund: | Renewables: 2002-2006: $135 million annually*; 2007: $135 million annually*; 2008-2011: $65.5 million annually*
Efficiency: $228 million annually
RD&D: $62.5 million annually
Beginning 2005, natural gas subaccount baseline funding of $12 million with increase of up to $3 million annually, capping at $24 million |
| Charge: | Rates vary by utility and customer type:
Renewables: ~1.6 mills/kWh
Efficiency: ~5.4 mills/kWh
RD&D: ~1.5 mills/kWh |
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Summary:
California's 1996 electric industry restructuring legislation (AB 1890) directed the state’s three major investor-owned utilities (Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas & Electric) to collect a "public goods surcharge" on ratepayer electricity use from 1998 through 2001 to create public benefits funds for renewable energy ($540 million), energy efficiency ($872 million), and research, development & demonstration (RD&D) ($62.5 million).
Subsequent legislation in 2000 (AB 995 and SB 1194) extended the programs for 10 years beginning in 2002, with annual funding of ~$135 million* for renewable energy programs (at the time projected to be ~$150 million annually for 2007-2011), $228 million for energy efficiency programs, and $62.5 million for RD&D. In September 2005, the California Public Utilities Commission (CPUC) boosted energy efficiency funding to $2 billion for 2006 – 2008.
SB 1036, enacted in 2007, made changes to renewable energy programs consequently reducing collections to $65.5 million annually* (projected to be ~$72 million annually) for 2008-2011. Calendar year 2007 actual collections totaled ~$145.8 million.
Renewable Energy Program
Beginning 2008, the California Energy Commission manages the renewables funds through three programs: - Existing Renewable Facilities Program - 20% ($14.40 million/year)
- Emerging Renewables Program - 79% ($56.88 million/year)
- Consumer Education Program - 1% ($720,000/year)
The Existing Renewable Facilities Program provides production incentives, based on kilowatt-hours generated, to support existing renewable energy facilities. Under SB 1250’s revised program structure, effective January 1, 2007, facilities must reapply for funding on an annual basis in order to establish that calendar year’s target price and production incentive cap. Although existing wind facilities are technically eligible for funding, they currently do not require assistance. Therefore, all Existing Renewable Facilities Program funds are available for eligible existing solid-fuel biomass facilities and solar thermal electric facilities.
The Emerging Renewables Program is administered through a rebate program. Through 2006, photovoltaics, solar thermal electric, fuel cells that use renewable fuels, and wind turbines were eligible under this program. However, effective January 1, 2007, only small wind and fuel cells using renewable fuels are eligible, with the program’s solar component replaced by the New Solar Homes Partnership program. As part of the $3.35 billion California Solar Initiative, the 10-year, $400 million New Solar Homes Partnership Program is focused on encouraging solar installations in the residential new construction market. Its goal is to install 400 MW of solar capacity by the end of the program and have 50 percent of new homes at that time built with solar systems.
The Consumer Education Program provides funds to promote renewable energy and help build the market for emerging renewable technologies.
*The total amount collected each year is adjusted annually at a rate equal to the lesser of the annual growth in electric commodity sales or inflation, as defined by the gross domestic product deflator.
Energy Efficiency Programs
The California Public Utilities Commission (CPUC) oversees the allocation of energy efficiency funds for program implementation to each of the four investor-owned utilities in California: Pacific Gas & Electric (PG&E), Southern California Edison, Southern California Gas Company, and San Diego Gas & Electric. (The original restructuring legislation did not address surcharges on natural gas companies; AB 1002, signed in 2000, established a gas surcharge for energy efficiency, low income assistance, and RD&D, beginning in 2001.) Every year, the CPUC approves each utility's plan for efficiency programs, which the utility then carries out within its service territory. A number of programs are also coordinated on a statewide basis.
See the financial incentive section of DSIRE’s California page for individual utility energy efficiency incentive programs.
Energy efficiency programs are designed to provide a fair distribution of funds among residential and nonresidential customers, while maximizing energy savings. There are special programs overseen by the Low-Income Oversight Board, to provide energy efficiency services specifically for low-income households.
Public Interest Energy Research (PIER) Program
The PIER Program annually awards funds to support electricty and natural gas RD&D projects focusing on the following program areas:- Energy Efficiency and Demand Response
- Advanced Electricity Generation
- Renewable Energy Technologies
- Transmission and Distribution
- Transportation
- Climate Science
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