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Solar Firms Say Sun Rises and Sets With Bill's OK

Posted on: Monday, 10 October 2005, 03:01 CDT

By Long, Jessica

The fate of California's solar industry is in the hands of state legislators this month, say local installers and manufacturers who contend that their businesses would be "killed" if lawmakers fail to pass Senate Bill 1, the so-called Million Solar Roofs bill.

The bill, which is awaiting final approval by the Assembly, proposes a revamp of the state's current solar roof rebate program, which is expected to run out of funding in 2006. If approved by lawmakers, the bill would allot enough incentives - roughly $2 billion worth - to fund 1 million new solar roofs, or 3,000 megawatts of solar power capacity, on both commercial and residential properties by 2018. That would be the capacity equivalent of two large nuclear plants, according to the San Diego Regional Energy Office. But if SB 1 fails, it could spell trouble for companies such as Borrego Solar.

Aaron Hall, the president of the El Cajon-based installer, said if legislators fail to provide incentives for solar customers, businesses like his will not be able to turn a profit since most people contend that solar roofs are too expensive to install without financial incentives.

Borrego Solar, which also has an office in Berkeley, is the largest residential solar electric installer in the state. Since 1999, the company has designed and installed more than 200 solar photovoltaic systems.

The company's current competitive quote to outfit a typical singlefamily home with an average $150 a month energy bill is roughly $40,000 pre-rebate, which varies with the individual and often includes prolonged state tax credits in addition to other deferences.

"(Solar energy) is incentive driven," Hall said. "Without the incentives, it just costs too much."

Because funding under the state's previous rebate program is increasingly limited, there are 65 companies in San Diego alone on a waiting list to get affordable solar roofing, Hall said.

Like most businesses, the way to cut the cost of installing a solar roof is to advance the technology and create a more competitive marketplace, Hall said. But advancing the technology that could reduce installation costs is not something manufacturers will do without SB 1's passage, said Cecilia Aguillon, the director of business development and government relations for Arizona-based Kyocera Solar, which has an office in San Diego and a plant in Tijuana.

"We definitely support long-term policies because the goal for us, and all manufacturers really, is to have guaranteed subsidy," Aguillon said. "What this bill does is send a signal that it's OK for us to invest in the market."

If manufacturers invest in the market, it'll lead to not only more products on the market but more jobs dealing in silicon, glass and steel supplies, as well as engineering and design, Aguillon said.

Hall said SB 1 also would keep installation crews busy for the next 10 years, helping attract new employees and ensure qualified, experienced workers remain in the industry.

What's Next?

The Assembly's Appropriations Committee was scheduled to hear the bill late last week. The bill was expected to reach the Assembly floor by Monday, Aug. 29, and then make it to the Senate next week for a final review and vote before it can head to Gov. Arnold Schwarzenegger for his signature.

Because the legislative bodies are both set to recess Sept. 9, the final vote on SB 1 is expected in the next two weeks.

Although Schwarzenegger has publicly supported the bill and it appears to have has a sizable amount of bipartisan support, SB 1 is not without opposition.

"There's huge challenges because it's a major, major piece of legislation, but there also seems to be great momentum behind this bill," said Robb Deignan, communications director for Sen. Kevin Murray, D-Los Angeles, the bill's cosponsor, along with Sen. John Campbell, R-Costa Mesa.

Although opponents of the bill include some utilities opposed to decentralized electricity generation, San Diego Gas & Electric is not one of them.

Peter Hidalgo, a spokesman for the Sempra Energy affiliate, said SDG&E was initially concerned about the sheer cost of SB 1, but has since decided to support the bill.

"SDG&E has been very supportive of the governor's interest in finding new renewable energy sources and as long as the price tag is acceptable, we'll support it," Hidalgo said, noting SDG&E currently uses solar energy in some of its operations.

If the bill can make its way through the Legislature, it could lead to an entirely self-sufficient California energy industry in he next 20 years, according to Hall.

Hall said he believes that if the bill is approved, the cost for solar roofing will drop so dramatically by the time the new rebate program runs out, that there won't be a need for subsidies after that.

Copyright San Diego Business Journal Aug 29, 2005

Source: San Diego Business Journal

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