California Extends Expired Solar Rebates Creating Free Energy

October 5th, 2011 by Susan Kraemer

Last December California Solar Initiative (CSI) funding for non-profits ran out too soon. Schools, churches, and other non-profits were using up their utility rebates for solar too fast. This week, Democratic Governor Jerry Brown signed into law a bill that pumps additional money into the program.

The CSI program has resulted in nearly 1 GW of rooftop solar, employed over 36,000 people and leveraged $4.5 billion in private capital. There are now more solar roofs in California than four other nations worldwide.

These roofs will pump out solar power for about 40 years, with the latter half or more being completely free. To help reduce the upfront costs of installation, upfront utility rebates are funded by CSI, based on their expected output of clean electricity to the California grid.

Then California’s big utilities also credit solar-power producing homes, businesses, schools and churches for their actual monthly output, because every MW of power that solar homes make is one megawatt-worth of new power plant that California utilities won’t have to build. This energy credit for production also reduces consumers’ ongoing monthly electricity expenses, or eliminates them entirely, if their solar roof is big enough to supply as much as they use.

How CSI makes free energy

CSI utility rebates mean Californians stand to save millions over the next decades in energy costs, and to then reap free energy for the remaining life expectancy of solar, which totals on average 40 years.

Many people mistake the manufacturer warranty periods: typically 25 years, for solar panel lifetime estimates. But because solar panels can be expected to lose about 12% of their originally rated output in 25 years, manufacturers cannot claim full rated output after then. But they still produce power for another fifteen years or more, totalling 40 years. The loss is trivial over that timescale, because the appliance efficiency improvements you’d expect over that kind of timescale would more than make up the loss.

The bill adds $200 million in funding. The solar rebate program, begun in 2006, was not intended to zero out till 2016. But it has been so successful that even by 2010 the power being added by rooftop installations was pushing against the ceiling, with a cap of 2.5% of peak demand on the California grid. The legislature voted to raise the cap up to 5% last year.

The rebate program was designed to help drive down the cost of solar installation, creating a vibrant, sustainable industry for California over the long term.

It has succeeded in driving down solar prices in California to cheaper than the cost of utility energy for many consumers, which is great for consumers, but not so great for some manufacturers, such as Solyndra, which were unable to compete on these price levels.

Most heartwarming beneficiaries: California’s cash-strapped schools

An example of a school savings comes from Los Angeles Unified School district, which will save $114 million in utility bills in the first 20 years of solar production from their roofs. And after that the savings will be even higher, as the panels are fully paid off. That money can now go to education rather than energy bills.

Susan Kraemer

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