SB 32 CalSIA FIT Bill Becomes Law--Could Bring Incremental Improvement

September 16, 2009 (Updated October 12, 2009)

By Paul Gipe

SB 32, one of several feed-in tariff bills in the California legislature passed the night of September 11, 2009. Governor Schwarzenegger signed the bill into law October 11, 2009.

The bill was introduced by Senator Gloria Negrete McLeod (D-District 32)on behalf of the California Solar Energy Industries Association (CalSIA) in December, 2008.

The bill slightly amends the largely ineffective feed-in tariff introduced by the California Public Utility Commission (PUC) January 31, 2008. SB 32 raises the project size cap to 3 MW from 1.5 MW.

The tariffs introduced by the PUC are based on avoided cost or the Market Price Referant (MPR) in California. Thus, there is only one tariff, but it varies by season and time of day. There is no differentiation by technology, size, or resource intensity.

In a recent analysis of the California PUC's existing feed-in tariff, Toby Couture of E3 Analytics found that only 14 MW have been installed in the 500 MW program.

SB 32 does not change the way tariffs are determined except that it directs the PUC to include environmental and distributed generation attributes in the tariffs. The bill is another of the efforts in the state legislature to gradually improve existing feed-in tariff policy.

SB 32 will primarily benefit commercial solar PV projects, it's unlikely to provide any benefit to wind or other forms of renewable energy.

Another measure, AB 1106, was held over to the next session. AB 1106 proposes feed-in tariffs for projects up to 5 MW based on the cost of generation as in successful European programs.

SB 32

• Raises project cap to 3 MW from 1.5 MW,
• Allows greenfield projects,
• Contracts for 10, 15, and 20 years,
• Determines tariffs by avoided cost (MPR or value-based),
• Includes environmental and distributed attributes (values) in tariffs, and
• Raises program cap from 500 MW to 750 MW.

"SB 32 provides a small incremental improvement to the AB 1969-based FITs in California, which have proven to be almost useless due to the pricing mechanism being set at MPR for all technologies," says Craig Lewis, a proponent of the competing bill, AB 1106.

Sierra Club California, advocates for comprehensive feed-in tariffs in the state, were neutral on SB 32.

SB 32 History

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