HomeMy WebLinkAboutAgenda Report - November 2, 2016 I-01TM
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA ITEM
I
AGENDA TITLE: Provide Direction on the Setting of Rebate Caps for the Annual Lodi Electric Utility
Solar Rebate Program
MEETING DATE: November 2, 2016
PREPARED BY: Business Development Manager
RECOMMENDED ACTION: Provide direction on the setting of rebate caps for the annual Lodi
Electric Utility Solar Rebate Program
BACKGROUND INFORMATION: Senate Bill 1 (SB1) was enacted by the State of California in August
2006 to encourage the installation of high-quality solar photovoltaic
(PV) systems. Also known as the "California Solar Initiative" SB1 set
a statewide goal of adding 3,000 MW of new solar PV systems over 10 years and mandated the
establishment of solar PV incentive programs for publicly owned utilities (POU's). In the first year,
SB1 required POU's to provide a rebate incentive of no less than $2.80/watt; declining at a rate of 7
percent each year thereafter.
Lodi Electric Utility (LEU) has provided rebate incentives for the installation of solar PV systems since
2008. In the absence of new legislation, 2017 will be the 10th and final year of LEU's solar rebate
program. SB1 is an unfunded state mandate; however, POU's are allowed to collect a separate
surcharge to be used for solar PV system rebate incentives. LEU's Program is funded by the California
Solar Surcharge ("CSS"). The amount collected for CSS is $0.00125 per kilowatt-hour assessed on each
customer's utility bill. LEU's annual solar rebate program budget totals approximately $600,000.
When LEU's solar rebate program began in 2008, the maximum system rebate amount or "cap" was set
at $375,000 and funds were distributed by rate class (i.e. residential; non-residential), on a first-come,
first -serve basis. Over subsequent years, as the cost of solar decreased and interest became more
widespread, the rebate cap has been substantially reduced in an effort to incentivize a greater number of
solar installations. When annual demand for rebate incentives exceeded available program budget, LEU
began using a lottery selection process in an effort to distribute funds in a fair and equitable manner.
Over the last few years, solar rebate incentive caps have been set at $7,000 for residential and $40,000
for non-residential, with no more than 50 percent of total project costs eligible. Even under this approach,
the number of interested customers has exceeded available rebate funds.
At the February 2 Council meeting staff was directed to launch the 2016 solar rebate program with a
reduced incentive cap of $5,000 for residential, while retaining the same $40,000 limit for non-residential.
Staff was also directed to maintain a waiting list that could be carried forward to 2017, should applications
exceed available funding. Based on the number of applications received in prior years, approximately
two-thirds of the $610,000 solar rebate budget was allocated to residential solar rebate incentives and
the balance was allocated for non-residential solar rebate incentives.
APPROVED:
Step en Schwaba
ty Manager
Rebates were ultimately reserved for all 84 of the residential solar applications submitted; a greater
number than would have otherwise been funded under the prior rebate limit. On the non-residential side,
a total of 15 applications were received, requesting rebates in excess of available program budget. Staff
selected applications through a lottery to establish the order funding would be awarded to each project.
This resulted in an initial waiting list of 10 projects; most of which may still be eligible for a rebate in 2017,
reducing the availability of solar rebates available to new applicants. As an example, if all 10 projects
move forward and are eligible to receive the maximum $40,000 non-residential solar rebate, two-thirds of
the 2017 solar rebate program would be unavailable to new applicants.
FISCAL IMPACT:
FUNDING AVAILABLE:
Modification of the annual solar rebate program incentive caps will not
result in a fiscal impact to Lodi Electric Utility; however, such changes could
impact the effectiveness of the solar rebate incentive program.
LEU's Program is funded by the California Solar Surcharge. The amount
collected is $0.00125 per kilowatt-hour assessed on each customer's utility
bill.
Adam Brucker
Business Development Manager
LODI ELECTRIC SOLAR
r,o' REBATE PROGRAM
Agenda Item 1-01
Provide Direction on the Setting of Rebate Caps
Lodi Electric Solar Rebate Program
2016 program to date
$61 0,OOO ($410k residential/$200k nonresidential)
Residential
84 applications received
$5,000 maximum rebate
Non-residential (commercial/industrial)
15 applications received
$40,000 maximum rebate
Lottery selection
Lodi Electric Solar Rebate Program
a.
❑ 2016 rebate payments
Residential
74 projects paid rebates totaling $345,065
4 projects in process $20,000
6 projects withdrawn
Non-residential
4 projects paid rebates totaling $141,000
2 projects in process totaling $80,000
1 additional waiting list project offered funding
o Remaining balance will be carried over to 2017 program
Lodi Electric Solar Rebate Program
❑ 2017 program - final year of state mandate
D $600,000 budget (plus any remaining 2016 balance)
O 8 non-residential projects carried over from waiting list
O Considerations
Rebates for carry-over projects
Allocation of remaining funds for Residential, Non-residential
Rebate limits (or caps)
Lodi Electric Solar Rebate Program
si
❑ Option 1
Fund carry-over non-residential rebates at 2016 cap
$40,000 x 8 projects = $320,000
Allocate remaining $280,000 balance
Residential $180,000
36 projects at $5,000 rebate cap
Non-residential $100,000
2.5 projects at $40,000 rebate cap
Lodi Electric Solar Rebate Program
Mho
❑ Option 2
Fund carry-over non-residential rebates at 2017 cap (new)
$30,000 x 8 projects = $240,000
Allocate remaining $360,000 balance
Residential $240,000
80 projects at $3,000 rebate cap
Non-residential $120,000
4 projects at $30,000 rebate cap