Other Issues

In comments, parties raised a number of additional issues, which we address below.

CALSEIA makes a number of proposals regarding the ongoing review of the program budget and also offers some suggestions to ensure that projects that have subscribed under the program are viable and will result in installed capacity. We appreciate CALSEIA's suggestions and while many of these may have merit, we do not believe this decision is the appropriate vehicle to address them. A ruling issued on July 26, 2010 in this proceeding includes a staff proposal for CSI modifications which addresses a number of programmatic issues and potential reforms. We believe the staff proposal and subsequent proceeding addressing that proposal provides a more appropriate forum for consideration of the various proposals put forward by CALSEIA.

TURN also made a number of suggestions regarding the incentives and potential changes thereto. In particular, TURN suggests that the incentives offered should be reevaluated to be reflective of the opportunity various entities may have to take advantage of tax credits and financing benefits. TURN is incorrect in its implied assertion that the current incentives do not incorporate the differential ability of entities to take advantage of tax credits. For example, in
D.06-08-028,the higher incentive offered to government and non-profit entities was expressly adopted to account for the inability of these entities to take advantage of tax credits. Further, the tax status of the system owner, not the host customer, is used in determining the incentive type available to participants.

Several parties, including Solar Alliance, PG&E, SolFocus, and TURN argue that the Commission should not be overly fixated on the capacity goals of the program. These parties offer various suggestions to eliminate later steps of the program altogether or measure progress in MWh rather than on a capacity basis. We agree that the Commission should not take actions intended to preserve program budget and overall capacity targets at the cost of substantial market disruption. However, we also believe that prudent management of the program requires us to take some action to address the projected budget shortfall given its magnitude and the fact that we believe the changes adopted herein will have limited impacts on the solar industry. That said, we agree that it is useful to track the total amount of energy delivered by CSI supported systems, and direct the PAs to work in consultation with staff to ensure that this metric is continued to be reported alongside other metrics used to assess the performance of the CSI program.¹⁹

Lastly, a number of parties, including CCSE, CALSEIA, the Solar Alliance, and SolFocus also take a longer term view of the future of support for solar in the state, and make various suggestions regarding other ways in which the state can provide for the long-term viability of a solar industry. These suggestions include encouraging the Commission to implement a feed-in tariff for solar, authorizing the use of tradable renewable energy certificates for compliance with the Renewables Portfolio Standard program, leveraging of smart-meter infrastructure, and extending or expanding tariffs that are favorable to solar. We appreciate the parties' thoughtful comments on these issues. However, the suggestions raised go well beyond the scope of this decision. With regard to the specific suggestion regarding the extension of tariffs that are favorable to solar, we strongly encourage solar industry stakeholders to actively participate in General Rate Cases where tariff design issues are addressed. We also note that on July 26, 2010, the Staff Proposal in this proceeding raised a number of issues specifically related to solar tariffs, such as Net Energy Metering and Virtual Net Metering. We plan to address those issues in a later phase of this proceeding.

¹⁹ See CSI 2009 Impact Evaluation Report at Section 5 for more information about the energy and capacity impact of CSI solar systems. http://www.cpuc.ca.gov/PUC/energy/Solar/eval09.htm.