NCPA - National Center for Policy Analysis


March 24, 2006

California's taxpayers will begin paying at least $3.2 billion over the next 11 years to finance a costly solar energy initiative rejected by the state's legislature in fall 2005 but implemented by the California Public Utilities Commission (CPUC) on December 13, says Environment and Climate News.

Indeed a virtually identical proposal to CPUC'S plan, the Million Solar Roofs proposal, died in the state assembly in September 2005 because of the bill's high costs. Rebuffed by the state legislature, Gov. Arnold Schwarzenegger took the plan directly to CPUC, which adopted the proposal.

The Million Solar Roofs proposal:

  • Tried placing solar power systems on the roofs of half of all new homes built in the state.
  • Contained a patchwork of electricity price hikes, subsidies and installation mandates designed to increase solar power, despite its prohibitive cost, to a 5 percent share of electric power generation in the state.
  • Meant each rooftop solar power system would cost homeowners approximately $27,000 but provide only about half of a home's power needs.

The News says even the estimated $3.2 billion price tag for the California Solar Initiative seems overly optimistic:

  • CPUC provided the estimate based in part on the assumption that the cost of solar equipment would decline.
  • Yet, solar power costs hover three to four times higher than electricity from gas-fired plants, according to Berkeley economist Severin Borenstain.

CPUC defended its Solar Initiative as the only way Californians can build and utilize solar power equipment and drive solar prices down, says the News.

Source: James M. Taylor, "California Utilities Commission Approves Costly Solar Plan," Environment and Climate News, February 2006.


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