Denis Poroy  /  AP
Solar paneling is added to the roof of the home at center in this San Diego, Calif., development.
updated 8/11/2004 9:34:20 AM ET 2004-08-11T13:34:20

California officials are proposing that half of all new homes in the state be running on solar energy in 10 years, an effort spurred by $100 million in annual incentives paid for by electricity consumers.

The move comes three years after the state suffered through an energy crisis that left utility customers paying off billions in debts incurred when wholesales electricity rates hit record-high levels.

The plan proposes that the state give rebates to home builders who install solar panels on new homes, and incentives for installing panels on existing homes, according to a California Environmental Protection Agency draft unveiled this month.

Surcharge but also surplus
The program would be paid for with a new monthly utility bill surcharge of about 25-30 cents per household, projected to raise $1 billion before the surcharge ends in 10 years. But homeowners would be free to sell excess solar energy back to electricity companies, leaving them with no net cost.

“Each month, the homeowner would save more money in reduced electricity charges than the homeowner would have to pay on the solar mortgage,” according to the draft presented by EPA Undersecretary Drew Bohan.

Environmental groups said the proposal would once again make California a national trendsetter while encouraging technical advances that would help make solar power more affordable worldwide.

“This is so far ahead of any other state ... there’s no comparison,” said Bernadette Del Chiaro of Environment California. The state already is the world’s third-largest market for solar technology, but would start to catch up with leaders like Japan and Germany, she said.

The solar power installations would be the equivalent of 36 new, 75 megawatt natural gas plants and would avoid pumping 50 million tons of carbon dioxide into the air from the accompanying combustion, the EPA estimated.

The incentives should be enough to get solar panels on 40 percent of new homes by 2010 and 50 percent by 2013, the EPA projects. If the incentives aren’t enough, the proposal would require panels on 5 percent of homes by 2010 and half of new homes by 2020. Proponents estimate 1.2 million homes would be producing solar energy by 2017, including 884,000 new and 313,000 older houses.

Gov. Arnold Schwarzenegger, who ran on a pledge of getting California homes to use solar power, has not endorsed the plan.

“My hope is he comes out even stronger” by increasing the incentives and mandates, and applying the requirements to commercial buildings as well, said Del Chiaro. “There’s no guarantee the builders will take advantage of incentives, even though the incentives are great.”

Legislation also weighed
Many environmentalists also are backing solar home incentives in pending legislation.

A solar incentive bill, approved by the Senate and pending in an Assembly committee, would require that 15 percent of new homes come with solar panels by 2006. The requirement would increase by 10 percentage points a year until it would mandate that 55 percent of homes come solar-equipped by 2010.

The building industry opposes the legislative solar homes bill, but said the incentives proposed by the energy commission are the way to encourage technological and economic improvements that will make widespread use of solar energy more realistic.

“It’s a much more sensible approach than an outright mandate,” said Tim Coyle, senior vice president of the California Building Industry Association. He said home solar systems can cost $17,000 to $20,000 and currently won’t pay for themselves since customers would typically pay $120 a month and receive about $70 in benefits.

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