III. Summary of the CEC/PUC Staff Report

The staff report titled "Joint Staff Recommendations to Implement Governor Schwarzenegger's One Million Solar Roofs Program," (Staff report) provides an overview of existing programs in California, Japan, Germany and Spain. Assuming the program reaches the goal of adding 3,000 MW of power (or reduced demand for power) in ten years, as the Governor proposes, the staff report estimates benefits from the CSI program would be just over $1 billion. It makes several recommendations about how to implement the CSI:

1. Consolidate residential and commercial solar incentives program into one program by June 2006;

2. Apply incentives to photovoltaic projects, solar-thermal electric projects, and solar hot water heaters;

3. Limit incentives to those projects with capacity of 1 MW or less;

4. Have the program administered by PG&E, SCE, SoCalGas and SDREO;

5. Fund the program at a level between $1.1 billion and $1.8 billion;

6. Consider a performance-based incentive program rather than incentives based on installed capacity;

7. Provide 125% of incentives to new structures that exceed energy efficiency standards by 10% or more;

8. Require existing structures receiving incentive payments to conduct an energy efficiency audit;

9. Provide 125% of incentive payments to affordable housing projects.

The parties' comments address these recommendations and the assumptions used to reach them. In general, the utilities caution that the program be designed in a way that is cost-effective. They raise questions about how the staff report would justify a goal of 3,000 MW and the suggested spending levels. Solar industry members and large consumer groups are encouraged by the proposal but want to know more about the details of the program and how it will be funded.