Bright days ahead for solar in California

Today the California Air Resources Board approved state standards that will push utilities there to use less fossil fuel for generating electricity. The express reason for the new, tougher anti-emissions regs: combat global warming.

There are now 31 new rules in California affecting utilities, large factories and refineries. The rules apparently will directly affect the state's huge and lucrative agri-businesses which use enormous amounts of water and energy. The plan includes rebates to home-owners for installing energy efficient or alternative energy devices. There'll also be a carbon trading market in the state for businesses. The target is to get the state's 2020 emissions back to the level of 1990. The usual economic arguments were made on both sides of the issue. The antis saying it'll destroy business and jobs. Supporters saying it will create growth and more greentech jobs.

SOLAR'S SHINING FUTURE

Even before these new California regs, the head of the California Solar Energy Industries Association CALSEIA) told me he saw a strong 2009 for his industry, despite the overall economic gloom. Capital spending may be down but what's spent will be carefully measured against future needs and savings. That should mean more solar installations. This will be further spurred by today's anti-pollution regs.

I spoke by phone with Gary Gerber, CALSEIA president for a second year. He said the next goal for CALSEIA is to get a solar feed-in law passed in Califonria. That would enable twenty-year electricity sale contracts between the solar panel owner and the local electrical utility. Similar laws exist in Germany and other countries already. It allows the solar investor to lay out a business plan, use capital effectively and project a fairly sure source of revenue.

Even before these new regs, Gerber predicted continued growth of solar capacity in California. The Los Angeles Department of Water and Power(LADWP) plans a huge 400 KW regional solar program. LADWP plans to get 20% of its power from alternative energy by 2010, and 35% by 2020. As of last July it was at 8.5%. The future renewable levels are standards being set by the state government.

Gerber hopes there'll be significant support for solar at the federal level, starting next year. He's already appreciative of the recently changed federal tax credits that took the credit cap off residential solar installations, and for the first time included utilities on the eligible list. The latter have the capital and the need to produce more and more capacity. California is still an energy importer. It's been badly hit in the past when energy is in short supply or prices for fossil fuels climb. Neither nuclear plants nor increased use of hydroelectric are going to be politically popular in the state. Solar is going to get a lot of attention. I recently blogged about some projects now getting pushback as solar becomes high profile.

Gerber pointed that simply getting the federal government to solarize its own installations would be a huge boost for the industry. Could that be part of any public works project? Gerber also hopes for attention to the component manufacturing. Nearly all solar panels used in the U.S. now have to be imported.

CALIFORNIA: THE TRUE SUNSHINE STATE?

Gerber pointed to two state measures over the past twelve months that should speed solar growth in his state. First there is AB 811. This will allow municipal solar programs where the city would fund installation of residential and small business solar, then recoup the costs through property taxes on the property. The installation becomes part of the deed of the property. Local governments can create "benefit assessment districts" and each individual property owner can decide whether or not to take action. As local action on global warming is politically popular in parts of the state, AB 811 gives those local governments a chance to push for more solar.

Gerber explained that the IRS has not yet ruled on how it will view such installations for individual taxpayers. If the ruling's favorable the installations are eligible for IRS tax credits, the solar boom could really take off in California.

It's been exactly a year since AB 1470 went into effect. It makes it almost a non-brainer to use solar water heating wherever it is possible in California. It uses revenue from a gas bill surcharge to give rebates to anyone replacing gas water heating with a solar system. California must import much of its natural gas supply. And gas lines are highly susceptible to earthquakes. Solar water heating systems have far lower operating costs.

Further Gerber sees a new focus on green jobs and solar tech training at the California's junior colleges and state universities.

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Most of the members of the CALSEIA are solar installation companies. Gerber himself is founder and boss at Sun Light and Power, Berkeley. The firm has been at this since 1976. CALSEIA members also include some manufacurers and major utilities in California. They're technology neutral Gerber says. There are applications where traditional solar panels work best, other installations are going to use solar thermal. Gerber explained that solar panels can work at some level even during overcast days. Solar thermal concentrators need full sunlight, meaning clear skies. And everyone in the industry is waiting to see what impact will be made by thin film solar as it becomes more competitive and available.