Highlighting California’s central role in the cleantech economy, Gov. Jerry Brown on Tuesday signed into law an ambitious mandate that requires the state’s utilities to get 33 percent of their electricity from renewable sources like geothermal, wind and solar by 2020.

The move, which gives California the most aggressive clean energy standard in the nation, is expected to create cleantech jobs up and down the state as utilities race to secure contracts with renewable energy power producers.

“Instead of taking oil from thousands of miles away we’re taking the sun,” Brown said before the signing ceremony at SunPower’s (SPWRA) solar manufacturing facility in Milpitas. “This is about California leading the country, and America potentially leading the world.”

U.S. Energy Secretary Steven Chu also brought good news to California on Tuesday, announcing at the heavily attended event that the Department of Energy has awarded SunPower and NRG Solar a $1.2 billion conditional loan guarantee for the California Valley Solar Ranch, a 250-megawatt power plant to be built in San Luis Obispo County. The solar plant is expected to create 350 jobs and generate enough power for 60,000 homes.

“The efficiencies created by the California Valley Solar Ranch project will help lower the cost of solar power and encourage more utility-scale solar deployment,” Chu said.

First major legislation

San Jose-based SunPower designs and manufactures solar cells and solar panels for residential, commercial and utility clients. The company has more than 5,100 employees worldwide, including about 4,300 in the Philippines, where it has two factories.

But SunPower is eager to manufacture closer to home. It recently opened its first domestic solar manufacturing facility in Milpitas, which is expected to create 100 jobs.

Under current California law, the state’s three largest utilities are required to procure 20 percent of their power from renewable sources. In 2009, former Gov. Arnold Schwarzenegger signed an executive order that raised the bar to 33 percent by 2020.

But Brown’s signing of the new law — his first major legislation since taking office — carries far more weight than an executive order, which can be reversed by the governor. It also extends to all utilities in the state, including municipal utilities in Palo Alto and Santa Clara.

In 2009, according to figures from the California Energy Commission, California as a whole generated 14 percent of its electricity from renewable sources.

“This is going to electrify California’s economy and reduce air pollution and global warming,” said Jim Metropulos of the Sierra Club.

But the California Manufacturers & Technology Association warned that the new mandate could potentially drive up the cost of electricity for the state’s businesses. “A 33 percent mandate is going to increase energy costs for industrial users,” said association spokesman Gino DiCaro. “It’s a competitive disadvantage for manufacturing in California.”

Pacific Gas & Electric, which has generally supported a 33 percent mandate, also has concerns about the details of the law, which requires the vast majority of electricity to be produced in-state. PG&E also warns that large-scale renewable projects are often delayed by the need for multiple permits, which can drive up costs.

“We’re looking for the best projects, and we think we can do everything to meet the goals, but hitting the target remains to be seen,” said Aaron Johnson, PG&E’s director of renewable energy policy and strategy. “There are a lot of permitting issues and financing challenges.”

Biomass, geothermal, solar, wind, wave and tidal power and small hydroelectric dams — which cause less harm to the environment than large hydro dams — all count toward meeting the law, and utilities can use a combination of renewable power sources to meet the 33 percent target.

Currently, most utilities heavily rely on hydropower, biomass and geothermal. But solar and wind are expected to make up the vast majority of new contracts in the coming decade.

“Solar is the fastest-growing part of our renewable portfolio, because the cost has come down drastically in the last two years,” said Marc Ulrich, vice president for renewable and alternative power for Southern California Edison.

The renewables law also contains provisions designed to protect consumers from rising and often volatile fossil fuel prices and requires regulators with the California Public Utilities Commission to approve any renewable energy contracts.

‘Market will respond’

“We’ll make sure that ratepayers are protected,” said PUC Commissioner Mike Florio, who was a consumer advocate with TURN, The Utility Reform Network, for three decades before being appointed to the PUC by Brown.

Tuesday also marked a huge victory for state Sen. Joe Simitian, D-Palo Alto, who has pushed for the 33 percent standard for four years.

“If we send a clear signal to the market, the market will respond — with investment, tax revenue and jobs,” he said.

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.