COM/MP1/avs Date of Issuance 1/22/2010

Decision 10-01-022 January 21, 2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding Policies, Procedures and Rules for the California Solar Initiative, the Self-Generation Incentive Program and Other Distributed Generation Issues.

Rulemaking 08-03-008 (Filed March 13, 2008)

DECISION ESTABLISHING THE CALIFORNIA SOLAR
INITIATIVE THERMAL PROGRAM TO PROVIDE
SOLAR WATER HEATING INCENTIVES

TABLE OF CONTENTS

Title Page

DECISION ESTABLISHING THE CALIFORNIA SOLAR INITIATIVE THERMAL PROGRAM TO PROVIDE SOLAR WATER HEATING INCENTIVES 22

1. Summary 22

2. Background 33

3. Overview of Staff Proposal 44

4. Cost-Effectiveness 66

4.1 Comments 1010

4.2. Discussion 1111

5. Goals, Strategy and Program Design Principles 1515

5.1. Comments 1717

5.2. Discussion 1818

6. Technology Eligibility 2121

6.1. Comments 2323

6.2. Discussion 2525

7. Incentive Design 2828

7.1. Gas-Displacing Incentives 2828

7.1.1. Incentive Rate 3030

7.1.2. Incentive Declines 3131

7.1.3. Incentive Caps 3232

7.1.4. Incentive Budget Allocations 3434

7.2. Electric-Displacing Incentives 3737

7.2.1. Incentive Rate, Caps and Declines 3939

7.2.2. Counting Electric Displacement 4040

7.3. Incentive Calculator 4141

8. System Performance Monitoring 4242

9. Program Administration 4444

9.1. Administrative Structure 4444

9.2. Coordination with Energy Efficiency Program 4646

9.3. Other Administrative Issues 5151

10. Budget 5252

10.1. Gas-Displacing Budget 5353

10.2. Electric-Displacing Budget 5757

11. Energy Efficiency Requirements 6161

12. Market Facilitation, Marketing and Outreach 6464

Title Page

13. Measurement and Evaluation 6666

14. Implementation Timing and Program Handbook 6969

14.1. Comments 6969

14.2. Discussion 7070

15. Low-Income CSI Thermal 7373

16. Comments on Proposed Decision 7474

17. Assignment of Proceeding 7676

Findings of Fact 7676

Conclusions of Law 7878

ORDER 8383

APPENDIX A - California Solar Initiative Thermal Program

DECISION ESTABLISHING THE CALIFORNIA SOLAR
INITIATIVE THERMAL PROGRAM TO PROVIDE
SOLAR WATER HEATING INCENTIVES

1. Summary

This decision establishes a California Solar Initiative (CSI) Thermal Program to provide incentives to promote the installation of solar water heating systems in the territories of Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCalGas). The CSI Thermal Program will be funded by $250 million in collections from gas ratepayers, pursuant to Assembly Bill (AB) 1470 (Stats. 2007, Ch. 536), as well as up to $100.8 million in funds already authorized and currently being collected through the general market CSI photovoltaic program and earmarked in Senate Bill 1 (Stats. 2006, Ch. 132) for solar thermal projects such as solar water heating. Monies collected under AB 1470 from gas ratepayers will fund incentives to solar water heating systems that displace natural gas usage, while funds collected through CSI from electric ratepayers will fund electric displacing solar water heating systems.

The CSI Thermal Program will be administered by PG&E, SCE, SoCalGas, and by the California Center for Sustainable Energy (CCSE) in the SDG&E territory. PG&E and SDG&E, in coordination with its program administrator, CCSE, will disburse incentives to both electric and gas ratepayers who install eligible solar water heating systems in their territories. SCE will disburse incentives through the CSI Thermal Program to customers who install electric displacing solar water heating systems. SoCalGas will disburse incentives to customers in its territory who install gas displacing solar water heating systems.

This decision sets forth the details necessary to implement the CSI Thermal Program, including program goals, technology eligibility, incentive structure, energy efficiency requirements, performance monitoring, program administration, budget and implementation timing.