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Feed-in Tariff’s Impact on California = Germany Runs Out of Solar Panels Due to Generous Feed-In Tariffs

Feed-in Tariffs in California are here! Will 2010 replicate in California the phenomenal expansion of Photovoltaic capacity in California that Germany has experienced in 2009? Susan Kraemer highlights how Germany is reaching the Solar Panel supply capacity limits in Germany Runs Out of Solar Panels Due to Generous Feed-In Tariff.  This is an indication of what could happen in California. On Oct 11, 2009, Governor Schwarzenegger, without any fanfare or press release changed California’ GRID.  Two bills were signed:

AB 920 – Solar and Wind Distributed Generation – Removed the consumer cap on Net Metering. Before, if you produced more power than consumed, the power company was not obligated to pay you for the excess power. That cap is removed, allowing for Feed-in Tarrifs to be set by the Public Utilities Commission (PUC) and compensate consumers.

SB 32 – Renewable Electric Generation Facilities – Mandates the power company buy solar power from small and medium sized installations. This opens park lots, commercial real estate, and other area to get a feed-in tariff set by the Public Utilities Commission (PUC).

This dramatic change in the GRID  was lost in California’s news. Everyone was talking about the Water Bill negotiations and the budget crisis. AB 920 and SB 32 were signed with no notice. The only thing we have are these two statements:

SB 32:

To the Members of the California State Senate:

I am signing Senate Bill 32, which would revise and expand the feed-in tariff (FIT) program
from 1.5 MW to 3 MW for eligible renewable electric generation facilities and authorizes the
Public Utilities Commission (PUC) to adjust the rate to reflect the value of the electricity and
other attributes.

In order to meet our greenhouse gas emission reduction goals and a Renewable Portfolio
Standard of 33% by 2020, we will need to use all of the tools available under our existing
programs to get to that goal. By increasing the size of projects allowed under the FIT program
and increasing the cumulative cap for investor-owned utilities for FIT projects, this bill is a step
in the right direction.

The PUC is also currently exploring an expanded FIT for small to medium scale renewable
generation using a market-based pricing approach. In addition to implementing the provisions of
this bill, I encourage the PUC to continue their work so that we can take advantage of the new
renewable electricity capacity that a robust FIT program can provide.

Arnold Schwarzenegger

AB 920 was just as bad, with no “extra statement” and a slight mention in the Oct 12th, 2009 press release Gov. Schwarzenegger Signs Legislation to Protect Environment, Create Jobs were we get the following:

The Governor also signed AB 920 by Assembly member Jared Huffman (D-San Rafael) that will allow electric utility customers who install solar or wind generators on their property to be paid by their electric utility for all the surplus electricity they produce.

What does this mean? It mean that transformation change comes to California – but with no one noticing. Granted, it will take time to re-educate home owners and businesses to take advantage of California Feed-in Tariffs. It will take time for the PUB to set the rates. It will take time for commercial real estate to realize the “passive cash flow” to be gained through solar installations on their property. It will take time. We’ve see that in Germany. The build up of “market awareness” takes time. As pointed out in  Erik Kirschbaum’s article Germany to post record rise in solar capacity, the ramp up to Germany’s leadership in PV installation (currently a 1/3 of the worlds 15 Mw capacity) took years. This year’s rapid increase is a combination of factors – along with a growth limiter from the financial crisis and scarcity of residential and commercial credit. Imagine what would happen when credit is available? Can this be repeated in California?

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This article was posted on Sunday, November 29th, 2009 at 3:25 pm You can leave a response, or trackback from your own site.
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