PHOTON International The Photovoltaic Magazine

Passage of California solar bill might be delayed again

Labor issues have sucked California's Million Solar Roofs Initiative into the vortex of partisan politics. If unions get their way with a controversial »prevailing wage« provision, they may force the governor to veto his bill.

	© Environment California
Bernadette Del Chiaro from Environment California with a copy of the ad that ran in the New York Times on Aug. 17^th calling on the Assembly to pass the Million Solar Roofs bill. While the ad was signed by a broad, bipartisan coalition, later several Republican politicians took an oppositional stance toward the bill.

»You turn the screws / It's what you choose to do / You think I must turn them too.« So sings the popular Sacramento, California-based rock band Cake on their album Prolonging the Magic. At an Aug. 14 concert in Anaheim, the band belted out their support for their home state's Million Solar Roofs Initiative (MSRI), Senate Bill 1. Amid a chorus of high-profile backers that included bill sponsor Gov. Arnold Schwarzenegger, Cake called on California's legislators to prolong the magic of cost-cutting subsidies for solar power.

Unfortunately, by the time the bill passed the Assembly Appropriations Committee on Aug. 25 – its last committee stop before heading to Assembly and Senate floor votes and potentially Gov. Schwarzenegger's desk by Sept. 9 at the latest – many of the bill's most ardent supporters felt that the screws were being turned on them.

»I am angry. Very angry,« wrote Sen. John Campbell, a Republican from Irvine and co-author of the initiative in his weekly report the day the bill passed out of committee. Union amendments added to the bill just before committee passage forced Sen. Campbell and other Republican legislative supporters of SB1 to take an oppositional stance. If left unaltered, the so-called »prevailing wage« issue – a requirement under state law for projects using a substantial public subsidy to pay union-level rates for labor performed – could create a situation where Schwarzenegger is called upon by his party to veto the bill. While the overwhelming public and political support for solar power in California may still encourage parties to reach a compromise, the lines are starkly drawn on this issue, and it is obfuscating the actual purpose of the legislation: namely, to create a long-term state program to install solar energy systems on one million residential and commercial sites by the end of 2018 (or 3,000 MW of peak generating capacity), stimulating a self-sustaining solar industry in 10 years, diversifying California's resource mix, improving air quality, and spurring a stronger local solar industry with more local jobs.

»Prevailing wage is a hugely charged partisan issue,« says Bernadette Del Chiaro, clean energy advocate at the non-profit organization Environment California. »If you're a Democrat, you must be for it. If you are Republican, you must be against it.« That was on vivid display in Sen. Campbell's angry divorce from his legislation. »The union bosses plan to take over this bill,« he wrote. »Through Assembly Speaker Fabian Núñez, the unions are proposing to put in place a clause that requires that people installing these solar panels pay a 'prevailing wage.'... This will increase the cost of solar energy by about 30 percent.« Campbell said he would have his name removed from the bill if the prevailing wage amendment was included. It was. And he did. »This bill means a lot to the Governor, but I hope he will veto it,« he added.

Prevailing wage triggered dissent not only among legislative solar supporters, but also within the solar power industry. »From a public policy standpoint, this is a bill the governor should veto even though it was his own idea,« says Barry Cinnamon of solar contractor Akeena Solar. In a recent white paper, Cinnamon estimates that requiring all work on solar systems to be done at prevailing wage rates would add $750 million to the cost installations over the life of the MSRI. The Appropriations Committee estimates that electric ratepayers in California will pay between $1.6 billion and $2.6 billion over 10 years, depending on participation from municipal utilities. Costs are capped at $1.8 billion for California's three investor-owned utilities – Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric.

Meanwhile, Environment California's Del Chiaro and others are concerned that the highly volatile labor issue is blurring the most important change to the legislation: net metering. The Appropriations Committee amended the net metering cap, which was to rise from a current limit of 0.5 percent of the utilities' aggregate peak demand to 2 percent, and then to 5 percent after the PUC has developed a time-variant net metering rate. But Committee struck 5 percent and entered 2.5 percent, which according to Del Chiaro would allow for only for cumulated installation of about 900 MW. She said she hoped parties could at least compromise on a 3-percent cap, which would allow for roughly 3,000 MW.

»I think there are workable compromises, and we are going to work very hard,« says Jan McFarland of manufacturing lobby group Americans for Solar Power. The industry could proceed without the necessary net metering requirements this year, and come back next year with a dedicated net metering bill. First, however, Schwarzenegger has to sign the Solar Bill by Sept. 9; only then will the public see if the screws were turned too tight.