Findings of Fact

1. In D.10-01-022, the Commission established the CSI Thermal Program but limited incentives to SWH systems that displace gas or electricity usage.

2. Section 2851(b) of the Public Utilities Code allows the Commission to fund $100.8 million for incentives to solar thermal and SWH systems.

3. Electric customers of PG&E, SCE, and SDG&E who use propane to heat water contribute to the CSI Program budget but are unable to access CSI Thermal incentives.

4. Residents who heat water with propane are likely to convert to a SWH system because propane is significantly more expensive than natural gas for water heating.

5. SWH systems that displace propane usage can decrease fossil fuel combustion and greenhouse gas emissions.

6. Preventing propane-displacing SWH systems from receiving CSI Thermal Program rebates creates a perverse incentive for customers to increase electric demand.

Conclusions of Law

1. It is reasonable to allow electric customers who use propane to heat water to qualify for incentives under the CSI Thermal Program.

2. D.10-01-022 should be modified to allow the CSI Thermal PAs to provide incentives to electric customers of PG&E, SDG&E, and SCE who install qualifying SWH systems that displace propane usage.

3. Electric customers seeking rebates for SWH systems that displace propane should meet all of the eligibility requirements that apply to electric-displacing SWH systems.

4. Incentives for propane-displacing SWH systems should be equivalent to incentives to systems that displace electricity.

5. Incentives for propane-displacing SWH systems should be funded on a first-come, first-served basis from the $100.8 million allocated in the general

market CSI Program for electric-displacing solar thermal technologies.

6. Incentive funds used for propane-displacing systems should count against Step 10 of the general market CSI program in the same manner as funds used for electric-displacing SWH installations in D.10-01-022.

ORDER

IT IS ORDERED that:

1. Decision 10-01-022 establishing the California Solar Initiative Thermal Program is modified as set forth in Appendix A of this decision.

2. Within 30 days of the effective date of this order, the California Solar Initiative Thermal Program Administrators (namely, Pacific Gas and Electric Company, Southern California Edison Company, and the California Center for Sustainable Energy) shall jointly file a Tier 2 advice letter to modify the CSI Thermal Program Handbook incorporating the changes in this decision and summarized in Appendix A.

3. The California Solar Initiative Thermal Program Administrators (namely, Pacific Gas and Electric Company, Southern California Edison Company, and the California Center for Sustainable Energy) may accept applications from qualifying electric customers of Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company for incentives for solar water heating systems that displace propane usage no later than 30 days after the advice letter in Ordering Paragraph 2 is approved.

4. The Administrative Law Judge may modify the compliance dates set forth in this order for good cause and as needed to ensure effective program implementation.

5. This proceeding remains open for consideration of additional issues as set forth in the Scoping Memo Ruling of November 9, 2010.

This order is effective today.

Dated November 10, 2011, at San Francisco, California.

APPENDIX A

Modifications to Appendix A of Decision (D.) 10-01-022

The following section should be added to the description of the California Solar Initiative (CSI) Thermal Program found in Appendix A of D.10-01-022:

Incentives for Propane-Displacing Solar Water Heating Systems

Applicants who install a solar water heating (SWH) system to displace an existing propane water heating system may be eligible for incentives if:

Propane may be used as a back-up fuel for an applicant's SWH system.

Incentive levels for propane-displacing systems shall be set at the same level as incentives to electric-displacing systems.

The CSI Thermal Program Administrators will pay incentives to qualifying propane-displacing SWH systems on a first-come, first-served basis using the $100.8 million in funds collected from electric ratepayers for the general market CSI Program. Incentive funds used for propane-displacing systems should count against Step 10 of the general market CSI program in the same manner as funds used for electric-displacing SWH installations in D.10-01-022.

(End of Appendix A)

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