Good Idea? Or Not? | Green Energy News

August 8, 2004 – Vol.9 No.20

GOOD IDEA? OR NOT?

When every American fills up at a gas station a portion of the tax he pays is allocated to build and maintain roads and mass transit.

Each driver pays some. All get to use the roads and to ride the transit if they choose to do so.

There’s legislation now pending in California to raise and spend $100 million each year for ten years ($1 billion) to help fund the installation of solar systems on one half of new homes built in that state for a decade. There also are incentives in the package for solar systems installed on existing homes.

The plan would give rebates starting at $2.80 per watt of installed solar photovoltaic system. A two-kilowatt system, for instance, would get a $5600 rebate. The homeowner - and owner of solar system - would also be allowed to sell electricity back to the grid to bring the net cost of the system down even further - possibly to zero.

Money for the program would come from 25 to 30 cents per month tax on utility customers. With some simple math each ratepayer would pay out $30 - 36 over the ten-year period. Not a lot of money.

Proponents of the bill say the incentives should be enough to put solar systems on 40 percent of new homes by 2010 and 50 percent by 2013. If funding wasn’t enough, a mandate in the legislation would require solar systems on 5 percent of new homes by 2010 and half of new homes by 2020.

Proponents, including the state’s Environmental Protection Agency, estimate that by 2017 1.2 million homes in California would have solar systems - 884,000 new homes and 313,000 older homes.

For an example of how big this incentive would be in terms of new solar capacity, and business for solar companies, according to the California Building Industry Association about 200,000 single family homes will be built in 2004. That number grows each year with the states population and economy. Imagine the business for solar installers.

Still, while everyone in the state will benefit indirectly in the long term if the bill gets Governor Schwarzenegger’s signature (reduced greenhouse gas emissions and slightly cleaner air), only a portion will be able to have the solar systems on their homes. Those who will get the systems will be the wealthier since the expensive systems still have to be purchased in the first place. The rebate would cover only part of the cost.

So unlike taxes on fuel that give every driver the direct benefit of better roads, this tax would allow only a fraction of California homeowners the direct benefits of solar such as possibility of free electricity.

Other solar legislation approved by the Senate and pending in Assembly committee has similar results with 15 percent of new homes with solar systems by 2006 and 55 percent by 2010.