What is California Solar Initiative?

Countries around the world have realized the importance & necessity of renewable energy technologies & the way forward for such realisations have come to life successfully in Germany through the feed-in-tariffs & the California Solar Initiative. Such movements prove time and again that the right technology with the right policy action can go a long way.

The Go Solar California! campaign is a solar initiative which aims to install 3,000MW of solar energy systems on households and commercial blocks by the end of the year 2016. The California Solar Initiative (CSI) is a key component of the above mentioned campaign.  This initiative is basically a solar cash back program for existing & new solar energy system customers . The total budget for the CSI program is $2,167 million. The program will be implemented via 1,940MW of new solar generation systems & 200,000 new solar hot water systems . Incentives are awarded based on characteristics of solar energy systems (example: location, system sizing and orientation) & also on the output from the system in its initial years.

Benefits of California Solar Initiative

The initiative has led to installations of 212 MW of Solar Power in the year 2009, making California the leader of solar installations in the United States . Such an initiative has won the support of many solar and environmental enthusiasts & the California public at large. The program has initiated the building up of a sustainable & effective infrastructure for the State of California. The success of the program will lead to the stability and confidence required to attract investments in new sustainability projects to work towards a model futuristic state.

The solar industry requires long term reliable programs like the California Solar Initiative to attract large investments to ramp up manufacturing capacities to meet the constant rising demand.  Such initiatives unlock new markets; stimulate new production & lower costs of the technology which are key in transforming the solar technology from a non-conventional source of energy to a mainstream form of energy .

There is ample room for improvement in the field of solar technology today. With Government initiatives like the CSI accelerating the demand for solar systems in the market, new players stepping in to the solar space would make the industry cost competitive leading to improvements in the technology of current systems driving down the cost per watt of solar technology. A classic example of this phenomenon is the solar panel prices which have dropped by 30% since the beginning of 2010 .

With the support of the California Solar Initiative, the solar industry has grown by leaps. Currently, there are 5,600 solar based companies in the United States employing more than a 100,000 Americans, which is double the amount of workers since 2009. Hence in the era of layoffs and pink slips, there has been a rise in demand for manpower in the solar industry aiding the American economy.

California Solar InitiativeThe demand for energy is rising with increasing population & improved standard of living. Dwindling coal reserves cannot suffice the future energy demands & Governments have to relieve coal & gas based power plants soon to keep up with the emission control norms as stated by the Kyoto Protocol. The California Solar Initiative is the ideal solution for the current scenario encouraging neighbouring states & countries to replicate such programs for building a clean & sustainable future.  

Current Scenario of CSI

Although The California Solar Initiative has been hugely successful in its attempt to promote solar based power generation, the program is experiencing some tough times. The state financial support for non-residential solar projects is diminishing, causing hardships for many projects in the pipeline. Although the rebates represent a small chunk of the project installation cost, it affects the overall profitability of the project, discouraging future projects. Without the rebate, the payback for these systems is driven to a period of 20 years, which is too long for developers & investors. This has resulted in the completion of only 21 MW of solar installations & the approval 46 MW of systems which was originally designed for 120 MW .

The Solar thermal rebate provided by CSI has barely been utilized. There are 2,244 rebate eligible solar PV Installers in California & just 374 solar thermal installers ! This lack of solar thermal installers in the state is the major cause for the under utilization of the rebates. Heating and plumbing contractors, best suited for the job are unaware of the large untapped market which holds great potential for them. Also the existent solar PV installers lack the skills to install a solar hot water system. 

What next with California Solar Initiative?

The California Solar Initiative needs to build in sustainability into the program to ensure its future success. Thus, its heavy dependency on rebates should be curtailed. Using the feed-in tariffs principle similar to Germany would be the right approach to achieve sustainability.

The current program makes special provisions for non profits and government agencies issuing them higher payments to compensate for their inability to access federal tax credits. This resulted in a loss of the benefit of the higher rebate. While commercial solar projects received an additional benefit worth $0.07/KWh. To make the program uniform for all, two separate feed in tariffs can be applicable depending on their access to federal tax credits .

The scope for growth in solar thermal related projects is massive. With recent engineering innovations, solar hot water systems have become extremely simple to install. With the use of public awareness programs & more PV installers willing to work in this field, solar thermal rebates can be well utilized.