V. Funding Levels and Sources

In 2005, the SGIP provided $42 million in incentive payments to solar projects larger than 30 kW. The SGIP program administrators have had to move funds from non-solar technology program elements to keep pace with demand for solar project incentives. Currently, there are no remaining 2005 funds in the SGIP for solar incentives and a large number of projects are on a waiting list for incentives. SDREO comments that its own program has stalled because it has funding for only half of pending incentive requests.

SB 1 would have funded solar project incentives at a level of $1.1 to $1.8 billion over ten years, an amount which our staff report uses as a basis for analyzing the CSI program. The parties who filed comments on the staff generally propose funding at levels between $1.2 billion and $3 billion. Annual funding may be inferred from those ten-year funding proposals.

Neither the staff report nor the record in this proceeding analyzes an appropriate level of CSI funding. The staff report naturally takes its cue from the Governor's proposal and SB 1. Because we are deferring action on the adoption of the CSI and therefore a longer term and more elaborate solar incentive program, we also defer our resolution of the issue of a total long term budget. We do, however, find an urgent need to increase funding for the solar element of the SGIP in recognition of the exhaustion of SGIP funds and our commitment to continue to promote solar development. Our decision also recognizes that projects on the SGIP waiting list seek a total of more than $200 million in funds.

Recognizing that we cannot divine an optimal funding level - and that we may change funding levels in the future to correspond to market conditions, the structure of the future program or other circumstances, we increase funding for the 2006 SGIP solar program element by $300 million.