California Passes Feed-in Tariff, Net Metering Bills
Governor Arnold Schwarzenegger signed two major renewable energy bills, AB 920 and SB 32 on October 11, 2009. AB 920, which expands the state’s net metering program, requires utility companies to pay households, businesses, and schools for extra electricity produced by the customer’s solar or wind power systems. Under previous net metering rules, utilities received excess generation at no cost, so the customer had no financial incentive to use less electricity than they produced. Supporters of the bill say this updated measure will encourage net metering customers to be more efficient. The California Public Utilities Commission (CPUC) will set the compensation rate paid to customers for any surplus electricity sent back to the grid.
SB 32 modifies the existing feed-in tariff by requiring that investor-owned and large public utilities purchase all renewable electricity from facilities producing up to 3 MW at a set rate until they reach their portion of a statewide cap of 750 MW. The previous facility limit was 1.5 MW with a statewide cap of 500 MW. The CPUC is responsible for setting the rate, which will be higher than market price to spur the deployment of renewable energy sources.
Both laws take effect January 1, 2010.