3. Program Overview and Goals

The Energy Division Staff Proposal contains a recommended incentive structure and implementation strategy for a $108 million solar photovoltaic (PV) incentive plan for qualified existing affordable multifamily housing developments.7 The MASH program is targeted at existing multifamily affordable housing that meets the definition of low-income residential housing set forth in Pub. Util. Code § 2852.8 Specifically, this means multifamily housing financed with low-income housing tax credits, tax-exempt mortgage revenue bonds, general obligation bonds, or local, state or federal loans or grants. The housing must also meet the definition of low-income households in Health and Safety Code § 50079.5.

According to a study for the Commission on the characteristics of the low-income population in California, approximately 50% of low-income households in the state, or approximately two million households, live in multifamily dwellings. (See KEMA Phase II Low Income Needs Assessment, October 12, 2007, pp. 4-8.) It is unclear what percentage of these multifamily dwellings meets the definition of low-income residential housing in § 2852.

The proposed program is designed to substantially subsidize solar energy systems in multifamily housing, which will, in combination with energy efficiency measures, offset energy loads and provide economic benefits for both affordable housing property owners and managers and building occupants.

The Staff Proposal recommends incentives solely for solar PV systems that generate electricity because CSI is funded solely by electric ratepayers in accordance with SB 1, which precludes the Commission from collecting CSI funds from gas distribution ratepayers.

The Staff Proposal is designed to provide incentives for solar power installation, coupled with energy efficiency, which will improve the energy utilization of affordable housing properties in California, with benefits accruing to both owners and tenants. With that mind, the Staff proposes the following goals for the program:

· Stimulate adoption of solar power in the affordable housing sector;

· Improve energy utilization and overall quality of affordable housing through application of solar and energy efficiency technologies;

· Decrease electricity use and costs without increasing monthly household expenses for affordable housing building occupants; and

· Increase awareness and appreciation of the benefits of solar among affordable housing occupants and developers.

In comments on the Staff Proposal, most parties agree with the overall program goals, but differ with the details of how to implement the program goals and strategy. We will adopt the basic program goals as set forth in the Staff Proposal. We will address suggested modifications to program details in the sections below as we consider the various program topics.

7 Newly constructed affordable housing may apply to the CEC's NSHP for solar incentives.

8 All statutory references are to the Public Utilities Code, unless otherwise noted.

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