Program Rationale

California is in the midst of planning for future economic, energy and environmental needs. Economists forecast robust growth over the next ten years, growth in population, business development, and housing. Along with welcome economic growth comes the need for expanded transportation, education, and energy infrastructure. Multiple planning efforts are underway to assess the magnitude and the potential impacts associated with our infrastructure needs.

The CPUC and CEC work in collaboration and in tandem to ensure California's energy supply is safe, reliable, and reasonably priced. In the aftermath of the energy crisis, the agencies adopted aggressive energy efficiency standards and renewable procurement goals to reduce peak demand and harmful environmental impacts associated with conventional energy generation. Most recently, the Governor announced his intent to address greenhouse gas emissions (GHG) and climate change issues. To that end, the CPUC requires the energy utilities to assess the financial risk associated with GHG emissions, and is looking at options to establish a GHG emissions reduction target for energy utilities.

The agencies are also in the midst of a proceeding to develop a common cost-benefit methodology for use in utility resource planning and procurement, and to determine incentives for procurement resources. This proceeding will help to quantify the costs and benefits of distributed solar energy systems in the state. As the costs and benefits of solar are quantified, we will incorporate the determined value in our CSI program design.

Of all commercially available distributed generation technologies, photovoltaic and concentrated solar systems have the greatest technical potential but also the highest cost. After eight years and close to $1 billion of subsidies, installed solar costs in California have decreased only slightly, and the industry has made little progress in reaching a self-sustaining market. California policies are clearly supportive of the on-grid solar market, but that support was unevenly distributed and often unavailable.