More Info About the
Emerging Renewables Program

old Renewable Program logo

Assembly Bill 1890 (Brulte, Chapter 854, Statutes of 1996) and Senate Bill 90 (Sher, Chapter 905, Statutes of 1997) created the Energy Commission's Renewable Energy Program. The Legislature directed that a portion of the funds collected from the customers of the three major investor-owned utilities (IOUs) be used for statewide public benefit programs, including incentives for renewable electricity systems. Under this legislation, the program continued through 2002 to provide financial incentives to support existing, new, and emerging renewable resources in a market environment.

In 2002, Senate Bill 1038 (Sher, Chapter 515, Statutes of 2002), reauthorized Renewable Energy Program through 2006. Its approach, however, for supporting renewable energy development was impacted by the energy crisis of 2000 and 2001. California's move to a restructured electricity market and the resultant energy crisis prompted policy makers to pursue a new method to encourage the development of renewable power: the Renewable Portfolio Standard (RPS). Under the RPS, the Renewable Energy Program's focus is twofold:

  1. To increase, in the near term, the quantity of California's electricity generated by renewable energy resources, while protecting system reliability, fostering resource diversity, and obtaining the greatest environmental benefits for California residents.
  2. To identify and support emerging renewable energy technologies with the greatest near-term commercial promise that merit targeted assistance.

The program continues to build a market for renewable energy by offering consumer rebates for on-site renewable energy systems; and consumer information on the purchase, installation, and available incentives for renewable energy.

Emerging Renewables Program

The Emerging Renewables Program was formerly called the Emerging Renewables Buydown Program. It initially provides rebates and production incentives to end-use consumers who purchase and install renewable energy technologies, primarily solar photovoltaic and small wind systems, for on-site generation.

The initial allocation of $54 million under the California Energy Commission's Emerging Renewable Resources Account was for the four-year period following the March 1998 start of the program. Payments from the Emerging Renewables Program are intended to reduce the net cost of generating equipment using emerging renewable technologies and thereby stimulate substantial sales of such systems. Increased sales of generating equipment are expected to encourage manufacturers, sellers, and installers to expand their operations and reduce their costs per unit.

Along with expanding the sales of emerging renewable technology systems, another goal of the Emerging Renewables Program is to encourage the siting of small, reliable distributed generating systems throughout California in locations where the produced electricity is both needed and consumed. To be eligible for the Emerging Renewables Program rebate, these generating systems must be located on the premises of customers of California's investor-owned electrical utilities (Bear Valley Electric, Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric, and sized so that the electricity they produce offsets part or all of the electrical needs of the premises.

Although the Emerging Renewables Program is open to emerging renewable generating systems of various sizes, subject to certain conditions and restrictions, it was designed to favor small generating systems, such as those typically used by residential or small commercial and agricultural customers. These conditions and restrictions are outlined in Emerging Renewables Program Guidebook, which can be downloaded from the website.

Applicants for funding from the Emerging Renewables Program must submit a reservation request that describes the system they are purchasing. The system must include equipment on the list of certified equipment established by the Energy Commission. Once a reservation is accepted, applicants have up to six months to complete their systems. Applicants of projects on public and charter schools and in new construction have up to 18 months to install their systems. Only upon proof of installation, along with an appropriate five-year warrantee covering the system, will the Energy Commission provide the buydown funding for the system based upon the system characteristics as installed. Requirements encourage applications to the program that reflect quality equipment and serious intent to purchase and install the equipment.

SB 1038 authorized the use of public goods charge funds collected from electricity ratepayers January 1, 2002, through December 31, 2006, to support the Renewable Energy Program. The enactment of SB 1250 (Perata, Chapter 512, Statutes of 2006) provided new authority to use funds collected over the following five years (2007-2012) to support the Renewable Energy Program.

On January 1 2007, the Emerging Renewables Program formally changed. Incentives for solar was split between the Public Utilities Commission and the Energy Commission. Incentives for wind and fuel cells continued under the Energy Commission.

Million Solar Homes & California's Solar Initiative

Go Solar California logo

On August 20, 2004, Governor Arnold Schwarzenegger laid the groundwork for the California Solar Initiative when he announced the "Million Homes Solar Plan."

The program's key components included:

  • The California Energy Commission will initially offer homeowners incentives for both new and retrofit applications.
  • Starting in 2008, home builders will offer solar panels as one of the options for new homes in California. This will apply to every subdivision with 25 homes or more.
  • The same way they receive savings and cost estimates for major appliances, buyers will be presented with an estimate of the costs and savings that come with installing a home solar system.
  • Customers who install the system will pay a time-of-use rate, increasing their savings further.
  • Customers will sell back excess electricity to the electrical utility at retail prices.
  • The program includes investor-owned and municipal utilities.

At the direction of Governor Schwarzenegger, the California Solar Initiative was approved by the California Public Utilities Commission (CPUC) on January 12, 2006. The initiative creates a $3.3 billion ten-year program to put solar on a million roofs in the state. This program changes the way the state's renewable energy incentives and rebates will be managed.

The CPUC is overseeing the program to provide incentives for existing residential customers and for all non-residential customers. See more about the California Solar Initiative (CSI).

The California Energy Commission is managing a 10-year, $400 million program to encourage solar in new home construction, known as the New Solar Homes Partnership (NSHP). The Energy Commission will work with builders and developers to incorporate high levels of energy efficiency and high-performing solar systems to help create a self-sustaining solar market where home buyers demand energy efficient, solar homes. The NSHP will specifically target single family, low-income, and multi-family housing markets.

While solar incentives spun off to the CSI and the NSHP, the Energy Commission modified its Emerging Renewable Program to continue funding for wind and renewable-powered fuel cell systems.

Legislative History

  • AB 1890 required the state's three major IOUs -- Pacific Gas and Electric Company (PG&E, Southern California Edison Company (SCE, and San Diego Gas and Electric Company (SDG&E) -- to collect $540 million from their ratepayers from 1998 through 2001 to support existing, new, and emerging renewable resources.
  • SB 90 created the RRTF as a depository for funds collected under AB 1890 and authorized the Renewable Energy Program to distribute the funds consistent with the Energy Commission's 1997 renewable energy investment plan. Subsequently, the Energy Commission adopted overall funding directives, eligibility requirements, yearly allocations, and specific guidelines to assist program participants in applying for funding.
  • AB 995 and SB 1194 extended the collection of $135 million per year, initiated under AB 1890, through 2011.
  • SB 1038 authorized the Energy Commission to use funds collected pursuant to AB 995 and SB 1194 for the continued administration and support of the Renewable Energy Program from 2002 through 2006, and directed the distribution of these funds consistent with the Energy Commission's 2001 renewable energy investment plan.
  • SB 1078 (Sher, Chapter 516, Statutes of 2002), established the state's comprehensive RPS and requires retail sellers to increase their procurement of renewable energy to 20 percent by 2017. California's current energy policy accelerates the RPS target to 20 percent renewables by 2010 and the Governor expanded the goal to achieve 33 percent by 2020.
  • SB 704 (Florez, Chapter 480, Statutes of 2003), required the Energy Commission to allocate $6 million from the RRTF for incentives to electricity-generating facilities that increased their utilization of qualified agricultural biomass for the 2003-2004 fiscal year.
  • SB 183 (Sher, Chapter 666, Statutes of 2003), amended and recast the provisions of Public Utilities Code sections 383.5 and 445 governing the Renewable Energy Program into Public Resources Code sections 25740 through 25751.
  • SB 67 (Bowen, Chapter 731, Statutes of 2003), modified the eligibility requirements for renewable generators located out-of-state.
  • SB 168 (Bowen, Chapter 733, Statutes of 2003), made technical amendments to Public Utilities Code sections 383.5 and 445, which were chaptered out because SB 183 recast those provisions into the Public Resources Code.
  • AB 135 (Reyes, Chapter 867, Statutes of 2004), authorized the use of an additional $60 million of RRTF dollars for the Emerging Renewables Program element of the Renewable Energy Program. These funds may only be expended until December 31, 2008, and are subject to the repayment requirements of Public Resources Code section 25751, subdivision (f).
  • AB 200 (Leslie, Chapter 50, Statutes of 2005), modified the eligibility requirements for renewable generators located out-of-state serving the load of utilities such as Sierra Pacific and PacifiCorp that have a limited number of customers in California and serve customers outside California.
  • SB 1 (Murray, Chapter 132, Statutes of 2006), establishes in statute the California Solar Initiative, a $3.35 billion rebate program for the installation of photovoltaic projects. The Emerging Renewables Program will be responsible for encouraging solar installations in the residential new construction market.
  • SB 107 (Simitian, Chapter 464, Statutes of 2006), accelerates California's Renewables Portfolio Standard target by requiring retail sellers of electricity to increase renewable energy purchases by at least 1 percent per year with a target of 20 percent renewables by 2010.
  • SB 1250, (Perata, Chapter 512, Statutes of 2006), authorizes the Energy Commission to use funds collected from January 1, 2007, through January 1, 2012, for the continued administration and support of the Renewable Energy Program.

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

Renewable Energy Call Center
Toll Free - 1-844-454-2906
Outside California - 916-653-0237

Renewable Energy Program