AB 1920: the California Solar Surplus Act of 2008

AB 1920 (Huffman), the Solar Surplus Power bill, is inherently about creating fairness within California’s solar market and about spurring ever greater consumer interest in investing in solar power bringing with it important environmental and economic benefits to the state.

Thanks in large part to the support and vision of Governor Schwarzenegger and the California State Legislature, California is a world leader in developing and promoting solar power. Our Million Solar Roofs Initiative is one of the biggest and boldest solar initiatives in the world. The road to a million solar roofs, however, will be long and difficult. While the state saw tremendous growth in solar applications for the state rebate program last year, California has to get to the point of installing roughly 10,000 solar roofs each year (2007) to installing 150,000 solar roofs each year (2016). To achieve this steep growth curve in just ten years California must remove all barriers for consumers wanting to invest in solar energy and more deeply penetrate the consumer driven market for solar power.  

REMOVES CURRENT “SIZE TO LOAD” RESTRICTIONS TO ENCOURAGE GREATER INVESTMENT IN SOLAR POWER: Toward this goal, AB 1920 would remove one important and unnecessary barrier. Specifically, AB 1920 removes the current restriction on homeowners or businesses over-sizing their solar system when compared with their electricity usage, or “load”.

PROVIDES GREATER FAIRNESS FOR CONSUMERS BY REQUIRING WHOLESALE COMPENSATION FOR SURPLUS POWER: In addition, AB 1920 removes another barrier which is the fact that today’s solar system owners “lose” surplus electricity at the end of each year, essentially giving it away for free to their utility, even though the utility can turn around and sell that electricity at the full bundled retail rate to other utility customers. This “give away” to the utility is a barrier for many Californians wanting to go solar.  We estimate that over 500 Californians are generating surplus power each year and giving that power to their utility without compensation.¹ AB 1920 would require the PUC, through a rulemaking procedure, to determine the appropriate wholesale rate. Furthermore, AB 1920 specifies that rebates through the California Solar Initiative apply only to the portion of the solar system sized to load.

REMOVES PERVERSE INCENTIVE FOR CONSUMERS TO WASTE ELECTRICITY: By giving solar system owners fair compensation for the surplus electricity they generate above and beyond their own on-site electricity needs, AB 1920 removes an unintentional but never-the-less perverse incentive for solar system owners to essentially waste electricity so as not to give any way or “lose” any to the utility. Furthermore, in addition to discouraging wasteful practices, AB 1920 would encourage greater efficiency and conservation at home and at a solar business;

ALLOWS UTILITIES TO COUNT PURCHASED SURPLUS POWER TOWARD RPS REQUIREMENTS: To encourage utility support of solar power and to reward those utilities that do the most to support roof-top solar installations, AB 1920 would allow the utility to count the amount of electricity purchased by the utility through this surplus power program toward their annual renewable portfolio standard goals.  The bill specifies, however, that the renewable energy attributes of the electricity used on-site by the solar system owner remain the property of the system owner, consistent with current regulations.

In short, AB 1920 is a simple, no-brainer bill that will help remove unnecessary barriers to solar power in California, help encourage greater conservation and efficiency and provide fairness for both the consumer and the utility company within today’s growing solar market.