Damon Franz (df1@cpuc.ca.gov)

California Public Utilities CommissionACEEE 2010 Hot Water Forum

May 13, 2010

The California Solar Initiative -Thermal Program

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Introduction

• Statewide effort to transform the market for solar thermal through rebates, standards, training and marketing

What is the CSI-Thermal Program?

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Introduction

• Rebates are now available!• CSI-Thermal Program began offering

rebates to single-family residential customers on May 1, 2010

• CPUC is currently finalizing the multi-family and commercial portion of the program

• Applications for low-income housing and non-water heating technologies likely in the fall or early next year

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Program Development Timeline

• July 2007 – December 2009: SWH rebates introduced as a pilot program in San Diego, administered by CCSE.

• October 2007: Assembly Bill 1470 (Huffman) directs CPUC to study the results of the Pilot, and if cost-effective, design and implement a statewide program

• April 2009: Itron releases analysis of pilot data on SWH rebates

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Program Development Timeline

• July 2009: CPUC Energy Division issues Staff Proposal recommending statewide rebate program

• January 2010: Decision authorizing statewide incentive program approved by the CPUC Commissioners

• May 1, 2010: Incentives are available for single-family residential customers

• May 24, 2010: Program Administrators file Handbook for Multifamily/Commercial Incentives

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CSI-Thermal Program Design

• Funding is separate for SWH systems that displace natural gas than for those that displace electricity (as required by law)• N-G displacing systems are funded from N-G

ratepayers under AB 920• Electric-displacing systems are funded from

electric ratepayers under CSI• Incentive amounts for the two types of systems

are different due to differing economics

• Both types of systems use the same application forms, database, etc.

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Design Builds on Prior Efforts

• The CSI-Thermal Program incorporates lessons learned from the SWH programs of the 1970s and 1980s• Incentives that are too rich can increase the

retail price for SWH systems• Quality control is essential• Government support is not eternal, and we

should plan for the day when it no longer exists by reducing incentives gradually

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CSI-Thermal Program Goals

• Increase the size of the market in California• Install the equivalent of 200,000 residential systems,

displacing 585 million therms of natural gas

• Increase consumer confidence and understanding of SWH technology• Program requirements and inspections protect

consumers ensure quality systems are installed • SRCC Certification is required• Maximum allowances on shading and other installation

parameters• Random inspections and penalties ensure that contractors

comply with quality standards

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CSI-Thermal Program goals

• Support reductions in the cost of SWH systems through efficiency and innovation• Installer training and “learning by doing” likely

to reduce labor costs• Competition for market share can spark

innovation that drives technology costs lower

• Reduce other market Barriers• Example: Program will provide training for

local permitting officials to reduce cost and time of obtaining a permit

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Market Transformation

• The CSI-Thermal Program is designed to drive market transformation through three parallel efforts• Cash-back rebates for solar thermal systems• Funding for advertising, public outreach and

awareness• Training for installers and building inspectors

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Rebates

• Total of $305.8 million in rebates structured to drive market transformation• Incentives start high to encourage market entrants,

then decline to foster competition• Incentives start at about $1,500 for a single-family system

gas-displacing system and decline in 4 steps to $550 for the same system

• Incentive declines are triggered by growth on the natural-gas side of the market

• Rebates are based on system output to encourage efficient, well-performing systems

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Rebates

• Rebates split between two customer classes• 40% of rebates set aside for single-family

residential class• Multi-family/commercial class may use up to

60% of rebates• Capped at $500,000 per system

• Large systems more cost-effective, but small systems have more “market transformation” potential

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Rebates – Natural Gas

Step Rebate for average system

Maximum rebate

Incentive per therm

displaced

Funding amount

1 $1,500 $1,875 $12.82 $50 M

2 $1,200 $1,500 $10.26 $45 M

3 $900 $1,125 $7.69 $45 M

4 $550 $687.5 $4.70 $40 M

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Rebates – Electric

Step Rebate for average system

Maximum rebate

Incentive per kWh

displaced

1 $1,010 $1,263 $0.37

2 $820 $1,025 $0.30

3 $600 $750 $0.22

4 $380 $475 $0.14

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Market Facilitation

• Total budget of $31.25 is split between marketing, outreach and training• PAs will undertake a statewide marketing

campaign to increase customer awareness of solar thermal technologies

• Technical training will be offered to increase the pool of qualified installers

• Training and outreach will be offered to local permitting officials to reduce the time and cost of obtaining building permits

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Measurement and Evaluation

• Program has a budget of $6.125 million for measurement and evaluation• A sample of systems will be monitored and

the data recorded• Participants and non-participants will be

surveyed

• Market knowledge gained from this program will inform and improve future efforts

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Questions

• What are the additional barriers to widespread market adoption of solar thermal technologies?

• Which technologies have the greatest potential for widespread adoption?

• How can government best promote these technologies with minimal distortions of the market?

• How can we encourage creative financing arrangements to mitigate high up-front costs?

• Others questions?