2. Background
In late 2007, the Governor signed Assembly Bill (AB) 1470, authorizing the creation of a $250 million incentive program to promote the installation of 200,000 solar water heating (SWH) systems in homes and businesses that displace the use of natural gas by 2017. Specifically, Public Utilities Code Section 28661 establishes eligibility requirements and other provisions of a low-income SWH incentive program, and requires that not less than 10 percent of the overall program funds be devoted to installing SWH systems on low-income residential housing. (See Section 2866(a).) Section 2861(e) of the statute defines low-income residential housing as residential housing financed with government tax credits, bonds or loans, or a residential complex in which at least 20 percent of the total units are sold or rented to lower income households. In addition, Section 2866(c) allows the Commission to extend eligibility for funding to include residential housing occupied by ratepayers participating in a Commission-approved and supervised gas corporation Low-Income Energy Efficiency (LIEE)2 program.
The statute does not prescribe an incentive amount or formula for incentives to qualifying low-income households. Instead, the statute directs the Commission to "maximize incentives to properties that are committed to continuously serving the needs of lower income households ...." (Section 2866(e)(1).) Further, Section 2866(d) requires the Commission to ensure that ratepayers receiving low-income SWH incentives benefit from the installation of the SWH system through reduced or lowered energy costs. Finally, Section 2866(e) requires the Commission to ensure that properties on which SWH systems are installed remain low-income residential properties for at least 10 years from the time of installation, including property ownership restrictions and income rental protections.
In order to implement AB 1470, the Commission issued a ruling in July 2009, requesting comments on a proposal by the Commission's Energy Division (Staff Proposal) for an SWH incentive program as envisioned by the statute.3 A portion of this Staff Proposal dealt with the mandate of Section 2866 regarding incentives for low-income residential housing. (See Staff Proposal, Section 4.12.)
After consideration of the Staff Proposal and comments on that proposal, the Commission issued Decision (D.) 10-01-022, which established the California Solar Initiative (CSI) Thermal Program to provide financial incentives to promote the adoption of SWH systems that displace usage of electricity and natural gas for water heating in California. In D.10-01-022, the Commission budgeted $25 million for low-income SWH incentives but stated that a future decision would establish details of those low-income incentives. This decision now addresses the details concerning low-income SWH incentives, including incentive levels, eligibility requirements, and other program implementation details.
1 All statutory references are to the Public Utilities Code unless otherwise noted.
2 The LIEE program is now known as the Energy Savings Assistance Program (ESAP).
3 See "Administrative Law Judge's Ruling Noticing Workshop and Requesting Comment on Staff Proposal for Solar Water Heating Program," Rulemaking (R.) 08-03-008, July 15, 2009.
