The CEC Emerging Renewables Program (ERP)

The ERP was created by Assembly Bill (AB) 1890,⁸ the legislation which adopted the framework for a competitive electricity industry in California. AB 1890 established a separate utility rate component known as the Public Goods Charge (PGC) to fund energy efficiency and renewables development. The ERP provides incentives primarily for small solar and wind projects. The CEC staff receives and processes all program applications, and authorizes individual rebate amounts. Rebates are based on installed capacity; most current rebates for PVs are $2.80 per watt.

Until 2001 there was minimal interest in the program. As the energy crisis progressed, program demand increased, and funds became scarce. On several occasions, funds were transferred from the state's General Fund and other Renewable Resources Trust Fund accounts into the ERP to meet the rising demand. In 2002, the legislature approved the 5 year investment plan and allocated 17.5 percent of the Renewable Energy Program Funds ($118 million) for the ERP, which equates to less than half of the annual demand for rebates in the prior two years. The Energy Commission began accepting applications on March 3, 2003. Significant 2003 program changes included the following:

· Reduced rebate from $4.50 per watt to $4.00/watt.

· Eliminated the cap that kept incentive payments under 50% of installed costs.

· Developed a schedule for rebates to decline $0.20 per watt every July 1 and January 1,

· Limited participation to projects less than 30 kW to reduce overlap with the SGIP.

· Allowed five years of funding to be made available on a first-come first-served basis to reduce uncertainty of funding availability.

Despite the rebate level reductions, ERP participation nearly doubled from the previous two years. The following chart (Figure 1) shows the system capacity for applications received as the rebate level has changed.

Figure 1: ERP Participation2001-2004

Since 1998, ERP allocated a total of $371 million for customer rebates to offset system purchase costs. The CEC estimates current funding will last through 2005.

⁸ Statutes of 1996, Chapter 854, Brulte