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Solar legislation to stop utilities profiting from homeowners' panels

Owners of solar and wind energy systems will soon be eligible for compensation and credits for generating more power than they consume.

On Oct. 12, Gov. Arnold Schwarzenegger signed into law AB 920, which will require utilities to compensate customers for excess power generated.

The California Public Utilities Commission must determine the rate utilities will be required to pay residential producers of solar and wind power before 2011.

Customers served by San Diego Gas & Electric currently return surplus power to the grid without compensation, said SDG&E spokesperson Jennifer Briscoe.

“Under existing law any excess generation is essentially donated to the grid,” Briscoe said.

The legislation applies to approximately 8 to 10 percent of solar customers, who produce excess power, said Andrew McAllister, director of programs for the California Center for Sustainable Energy.

The group’s ranks are growing as customers with solar panels begin taking other measures to increase their efficiency and reduce consumption.

As it stands, many customers are reluctant to turn over their excess power to utilities.

Some even use more power than necessary to avoid gifting excess energy to utility companies.

AB 920 will encourage conservation and energy efficiency retrofits, said Sue Kateley, executive director of the California Solar Energy Industry Association (CALSEIA).

“I think some customers will look at efficiency as a way to ensure they receive a credit each year,” Kateley said.

The CPUC is unlikely to set the compensation rate for solar customers at the retail rate, McAllister said.

Customers will most likely receive a lesser wholesale rate, however the incentive will be large enough to encourage more people to go solar.

AB 920 will be a boon to solar contractors, said Karen Prescott, assistant manager and director of local government relations for the National Electrical Contractors Association San Diego chapter, which trains apprentices to install solar panels.

“Every time we have an incentive offered we will see more interest,” Prescott said.

Assembly Bill 920 was also strongly backed by County Supervisor Dianne Jacob who brought the issue to the attention of the County Board of Supervisors in November 2008.

She believes the legislation will generate an explosion of interest in the renewable energy industry, creating jobs and helping improve air quality.

“The governor is to be commended for giving green-minded San Diegans a fair return on their investment,” Jacob said in a written statement. “The utilities have been allowed to profit from the investments of home solar and wind customers for long enough.”

However, Angiolo Laviziano, chief executive officer of San Luis Obispo-based contractor REC Solar, said AB 920 is a positive development, but “not the strongest piece of legislation”.

The bill currently applies to few people but will likely generate interest in larger systems, Laviziano said.

California will not become the first state to compensate customers for excess power.

Colorado, Connecticut, Maryland, New Jersey and Minnesota have already enacted similar legislation.

In Oregon, credit from surplus solar power is granted to customers enrolled in the state’s low-income assistance programs.

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