History of California's Renewable Energy Programs

California with its abundant natural resources has had a long history of support for renewable energy. In 2009, 11.6 percent of all electricity came from renewable resources such as wind, solar, geothermal, biomass and small hydroelectric facilities. Large hydro plants generated another 9.2 percent of our electricity.

Following deregulation of the electric utilities in 1998, the California Energy Commission was placed in charge of a new Renewable Energy Program. It was begun to help increase total renewable electricity production statewide. This followed decades of bipartisan legislative and gubernatorial support for renewable energy helping to make California a recognized leader in the field.

In 2002, California established its Renewables Portfolio Standard Program, with the goal of increasing the percentage of renewable energy in the state's electricity mix to 20 percent by 2017. The Energy Commission's 2003 Integrated Energy Policy Report recommended accelerating that goal to 2010, and the 2004 Energy Report Update urged increasing the target to 33 percent by 2020. Governor Schwarzenegger, the Energy Commission, and the California Public Utilities Commission (CPUC) endorsed this enhanced goal for the state as a whole. Achieving these renewable energy goals became even more important with the enactment of AB 32 (Núñez, Chapter 488), the California Global Warming Solutions Act of 2006. This legislation sets aggressive greenhouse gas reduction goals for the state and its achievements will depend in part on the success of renewable energy programs.

In the ongoing effort to codify the ambitious 33 percent by 2020 goal, SBX1-2 was signed by Governor Edmund G. Brown, Jr., in April 2011. In his signing comments, Governor Brown noted that "This bill will bring many important benefits to California, including stimulating investment in green technologies in the state, creating tens of thousands of new jobs, improving local air quality, promoting energy independence, and reducing greenhouse gas emissions.

This new RPS preempts the California Air Resources Boards' 33 percent Renewable Electricity Standard and applies to all electricity retailers in the state including publicly owned utilities, investor-owned utilities, electricity service providers, and community choice aggregators. All of these entities must adopt the new RPS goals of 20 percent of retails sales from renewables by the end of 2013, 25 percent by the end of 2016, and the 33 percent requirement being met by the end of 2020.

The Energy Commission's Renewable Energy Program has provided market-based incentives for new and existing utility-scale facilities powered by renewable energy. It also offers consumer rebates for installing new wind and solar renewable energy systems. The program also helps educate the public regarding renewable energy. Find out more about the history of the program.

From 1998 to December 31, 2006, the Energy Commission's Emerging Renewables Program funded grid-connected, solar/photovoltaic electricity systems under 30 kilowatts on homes and businesses in the investor-owned utilities' service areas, wind systems up to 50 kW in size, fuel cells (using a renewable fuel), and solar thermal electric. The California Public Utilities Commission (CPUC) funded larger self-generation projects for businesses. Since 2007, the Emerging Renewables Program has focused on providing incentives toward the purchase and installation of small wind systems and fuel cells using a renewable fuel.

Go Solar California logo

Effective 2007, the solar portion of the Emerging Renewables Program ended and was replaced with Senate Bill 1's vision for California to have two programs to support onsite solar projects: the Energy Commission's New Solar Homes Partnership and the California Public Utilities Commission's California Solar Initiative. In addition, there would be a variety of solar programs offered through the publicly owned utilities. This statewide effort is known collectively as Go Solar California and has a statewide campaign goal of 3,000 MW of solar generating capacity with a budget of $3.35 billion.

The CPUC's California Solar Initiative (CPUC ruling - R.04-03-017) moved the consumer renewable energy rebate program for existing homes from the Energy Commission to the utility companies under the direction of the CPUC. This incentive program also provides cash back for solar energy systems of less than one megawatt to existing and new commercial, industrial, government, nonprofit, and agricultural properties The CSI has a budget of $2 billion over 10 years, and the goal is to reach 1,940 MW of installed solar capacity by 2016.

The Energy Commission's New Solar Homes Partnership, a $400 million program, offers incentives to encourage solar installations, with high levels of energy efficiency, in the residential new construction market for investor-owned electric utility service areas. The goal of the NSHP is to install 400 MW of capacity by 2016.

History of the Energy Commission's Renewable Energy Program

The California Energy Commission's Renewable Energy Program was organized under five categories as originally directed by Senate Bill 90 (SB90 - Statues of 1997, Chapter 905, Sher):

  • Existing Renewable Resources - Support market competition among in-state existing renewable electricity facilities through varying incentives.
  • Emerging Renewable Resources - Stimulate renewable technology market growth by providing rebates to purchasers of on-site renewable energy generation while effecting market expansion.
  • Consumer Education - Inform the public about the benefits of renewable energy and available choices of emerging renewable energy technologies through information dissemination and project demonstrations.
  • New Renewable Resources - New Renewable Resources Account of the Renewable Resource Trust Fund abolished effective July 1, 2008 - Encouraged prospective renewable electricity generation projects built in California through production incentives. Under the original program, funds were allocated to the lowest bidders during three competitive solicitation processes, with incentives paid over a five-year period once a project began generating electricity. The program evolved to offer financial production incentives, termed supplemental energy payments, to cover the above-market costs of meeting the Renewables Portfolio Standard. However, effective January 1, 2008, Senate Bill 1036 terminated the Energy Commission's authority to award supplemental energy payments to new renewable electricity generators. Visit the New Renewable Resources Account page for more information.
  • Customer Credit - Discontinued in 2004 - Provided incentives to renewable energy electricity service providers to lower the cost of renewable electricity to eligible customers.

The initial funding allocations for the program were established through legislation, but the Energy Commission was given flexibility to reallocate the funds within the program as market conditions changed. Reallocations are executed with public input and are reported to the Legislature in the Renewable Energy Program's Annual Report to the Legislature.

Besides the Renewable Energy Program, public goods charge funds are also being directed toward research in renewable energy technologies. Those funds are allocated under the Public Interest Energy Research (PIER) Program's Renewable Energy Program Area.

Renewable Energy Program Funding 1998-2001

Assembly Bill 1890 AB 1890 - Statutes of 1996, Chapter 854, Brulte) was the initial electricity industry deregulation legislation and was signed into law by Governor Pete Wilson in September 1996. It required California's three major investor-owned utilities (Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas & Electric) to collect 540 million from their ratepayers via a "public goods surcharge" on electricity use. Bear Valley Electric, another investor-owned utility, continues to participate in the Renewable Energy Program as well and has collected more than 550,000 from its ratepayers from 1998 through 2007. In addition, voluntary contributions from the public have added nearly 20,000 to the Renewable Resource Trust Fund in support of renewable energy.

The following year, Senate Bill 90 implemented the provisions of AB 1890 by creating the Renewable Resource Trust Fund as a depository for AB 1890 fund collections and directed the activities of the Energy Commission relating to renewable energy.

Renewable Energy Program Funding 2002 to 2006

In September 2000, the legislature adopted the Reliable Electric Service Investments Act as the result of legislation: Assembly Bill 995 (AB 995, Statutes of 2000, Chapter 1051, Wright) and Senate Bill 1194 (SB 1194, Statutes of 2000, Chapter 1050, Sher). These two pieces of legislation mandated the three major investor-owned utilities to collect 135 million annually for 10 years beginning in 2002 to support the Renewable Energy Program.

Senate Bill 1038 (SB 1038, Statutes of 2002, Chapter 515, Sher), signed in September 2002, incorporated the "Investment Plan" with changes. The bill directed the Energy Commission on how to implement the Renewable Energy Program from 2002 through 2006. The funding allocations differed from the initial allocations with subsequent changes due to the discontinuation of the Customer Credit Program as shown in the table below. More detailed account funding information, including program activity, is available in the Renewable Energy Program's Quarterly Updates.

Renewable Energy Program Funding Allocations
1998 through 2006

Program 1998-2001 2002-2006 2002-2006
(Reallocation of Customer Credit)
  Percent of Total $ Million Percent of Total $ Million Percent of Total $ Million
New Renewables Facilities 30 162.0 51.5 347.625 51.5 347.625
Emerging Renewables 10 54.0 17.5 118.125 26.5 178.875
Existing Renewables 45 243.0 20.0 135.000 20 135.000
Consumer Education 1 5.4 1 6.750 0 0.000
Customer Credit 14 18.90 10.0 67.500 0 0.000
TOTAL 100 540.0 100 675.000 100 675.000

Renewable Energy Program Funding 2007 through 2011

Funding allocations for 2007-2011, legislated by SB 107 and SB 1250, changed with the enactment of SB 1036, effective January 1, 2008. SB 1036 abolished the Energy Commission's authority to award supplemental energy payments and eliminated the New Renewable Resources Account effective July 1, 2008. The Energy Commission was also directed to refund unused supplemental energy payment funds to the utilities whose ratepayers contributed funds to support the Renewable Resource Trust Fund. Consequently, beginning 2008 through 2011, SB 1036 established new funding allocations for the remaining programs: Existing Renewable Facilities Program (20%), Emerging Renewables Program (79%), and Consumer Education Program (1%).

Renewable Energy Program Funding Allocations 2007 through 2011

Program 2007 2008-2011
  Percent of Total Million Percent of Total Million
New Renewables Facilities 51.5 75.110 0 0
Emerging Renewables 37.5 54.691 79 227.52
Existing Renewables 10 14.584 20 57.60
Consumer Education 1 1.459 1 2.88
TOTAL 100 145.844 100 288.00

Renewable Energy Program 2008 through 2011

  • Existing Renewable Facilities Program - Funds for existing technologies are distributed through a cents-per-kilowatt-hour production incentive. Beginning 2007, facilities are required to apply for funding. Applications must include a project-specific target price request and a cents/kWh cap on funding for energy produced in a calendar year.

    For current information, please visit the Existing Renewable Facilities Program page.

  • Emerging Renewables Program - This program provides rebates to purchasers, lessors, or sellers of eligible electricity generating systems for generation on-site. Through 2006, eligible technologies were solar photovoltaic, small wind, fuel cells using renewable fuels, and solar thermal electric. Effective 2007, only small wind systems (rated output of 50kW or less) and fuel cells (using a renewable fuel) are eligible. The California Solar Initiative has replaced the solar components of both the Energy Commission's Emerging Renewables Program and the California Public Utilities Commission's Self-Generation Incentive Program.

    The California Solar Initiative is a $3.35 billion solar incentive program administered by the CPUC, Energy Commission, and publicly-owned utilities from 2007 through 2016. The CPUC is responsible for providing incentives to the nonresidential and existing residential markets. The Energy Commission's New Solar Homes Partnership program, a subset of the Emerging Renewables Program, offers incentives to encourage solar installations, with high levels of energy efficiency, in the residential new construction market for investor-owned electric utility service areas.

    For more information, please visit the Emerging Renewables Program page and the Go Solar California website.

  • Consumer Education Program - The Consumer Education Program increases public awareness of renewable energy and its many benefits and helps build a consumer market for renewable energy and small-scale emerging renewable technologies. It also adds value to renewable energy by developing products that verify and track energy generation and validate retail product claims.

    More information is available on the Consumer Education Program page.

Voluntary Contributions to the Renewable Energy Program

The program allows voluntary contributions from Californians to help support the program. If you would like to contribute to the Renewable Energy Program, you may write a check payable to "Renewable Resource Trust Fund" and mail it to:

California Energy Commission
Renewable Resources Trust Fund
P.O. Box 944295
Sacramento, CA 94244-2950

Or you can also send your Renewable Energy Program contribution to your utility (which forwards your donation to the California Energy Commission).



For assistance regarding the Renewable Energy Program areas, please contact:

Renewable Energy Call Center
Toll Free - 844-217-4925
Outside California - 916-653-0237
E-mail: Renewable@energy.ca.gov

Renewable Energy Rebates & Incentives

Renewable Energy Programs

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