Who really pays for solar power in California?

Auburn Union School District debates solar power deals
By: Sara Seyydin Journal Staff Writer
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A local school district is moving forward with a major solar installation in July that is expected to generate 80 percent of its power. The installation of the project, which could save the Auburn Union School District $7 million to $8 million over 25 years, will either be funded through financing from the Placer County treasury or a power purchase agreement with iecRenewables LLC, the company that will install the solar panels. Tonight the district will discuss each option and hear from the public on the project. District officials say the project presents a significant savings to the district, in addition to being more energy efficient. IecRenewables officials say most of the savings will come from rebates through the California Solar Iniative. PG&E officials say as an administrator of the iniative, their electric ratepayers fund these rebates through their utility bills, which some taxpayer advocacy groups say is driving up the cost of electricity in California. Savings in electric bill will pay for solar project Monica Williams, chief business officer for the Auburn Union School District, said the money saved on the district?s electric bill will pay for the project. She said panels will be installed at four school sites, including Rock Creek Elementary School, E.V. Cain Charter Middle School, Auburn Elementary School and Skyridge Elementary School. Some of the solar panels will be installed as shade structures over existing parking lots. ?I think it?s very exciting when we can do something with alternative energy and have it actually be a savings for the district from current expenses and projected expenses,? Williams said. Initially, the district had planned to enter into the power purchase agreement with iecRenwables LLC, but was later approached by the county with a loan that could be a better deal, said Daniel Berlant, president of the district?s board of trustees. If the district moves forward with the power purchase agreement, then iecRenwables will own the solar panels. But if it takes the 20-year loan being offered by the county at a total cost of $3.8 million, the school district will own the solar panels. Jenine Windenshausen, Placer County treasurer/tax collector, said the funds from the treasury are a combination of county funds, school district funds and special district funds that the treasury invests like a bank for county governments. She said the county has had PG&E verify the estimated savings. She said with most the treasury?s portfolio invested in Wall Street, it also wants to help local entities, too. ?We want to make sure that we are investing in something that is sound,? Windenshausen said. ?What we are looking to do is to help our Placer County local government. Most of that portfolio is invested in Wall Street, so we are looking for ways to invest in Main Street.? She said the financing plan is still subject to approval by the district?s board of trustees and the Placer County Board of Supervisors because it is over more than a five-year term. The owner of the panels will receive an incentive of 8.8 cents per kilowatt hour for the first five years. Williams said she estimates that if it owns the panels, the district will receive a total of $460,000 in incentives in the first five years. Berlant said the board has already approved the project, but can stop it if it finds the savings won?t be as much as initially projected. Berlant said given the rising cost of electricity, he doesn?t anticipate that happening. ?We have really done our homework to make sure this is a wise decision for us,? Berlant said. ?It?s not just about the dollars and the savings. It?s also about using more efficient, greener energy.? Anything that enables the district to save money during the difficult economic climate is a benefit, he added. Eddie Jordan, director of renewable energy for iecRenewables LLC, said the project is a combination of energy conservation measures, including the solar panels and higher-efficiency lighting and thermostats. If the district enters into the power purchase agreement, then iecRenewables LLC would own the solar panels and sell the power back to the district at a reduced rate. The panels have a 25-year life expectancy. Williams said there may be new technology in 25 years that doesn?t even exist today. Electric ratepayers pay for solar-users incentives In 2008, former governor Arnold Schwarzenegger signed Executive Order S-14-08, which requires all retail sellers of electricity to serve 33 percent of their load with renewable energy by 2020. By the end of 2013 all sellers have to serve 20 percent of their load with the renewable sources, according the California Energy Commission. Denny Boyles, PG&E spokesman, said having solar customers helps PG&E reduce peak demand, so that it doesn?t have to build plants that might not be as clean for the environment. He said the company still retains customers with solar panels because not all of their needs can be met with solar power. As an administrator of the California Solar Iniative, along with Southern California Edison and San Diego Gas and Electric, Boyles said the company?s electric ratepayers fund the initiative?s incentives. ?It is a fact that non-solar customers do help pay for these solar customers, not just for the rebates, but a portion of your electric bills,? Boyles said. ?It?s built into our rate structure.? The company works hard to keep the rate system fair, though, he said. PG&E customers who have installed solar panels through the California Solar Iniative have earned incentives totaling $783,672,911 for 45,536 solar projects, according to statistics from its website. Jon Coupal, president of the Howard Jarvis Taxpayers Association, said while PG&E is acting pursuant to state law, state mandates forcing the total energy mix to be ?renewable? hurts the state?s economy. He said there are instances that solar installations make sense, but the state doesn?t even include hydroelectric power as a renewable source. ?It is one of the reasons California electric rates are so much higher than other ratepayers in the rest of the nation and that is hurting our economic competitiveness,? Coupal said. ?The broader issue from the perspective of ratepayers is the mandates that energy companies generate a certain percentage of their power from what has been identified as renewable sources, which does not include hydroelectric. Those mandates are hurting the California economy.? Andrew Kotch, information officer for the California Public Utilities Commission, said the California Solar Iniative helps create a better environment in California. ?The more solar power, the less impact on the electricity grid to produce power at peak times,? Kotch said. ?Going solar reduces carbon footprints, leaving a better environment for everyone now and in the years to come.? Reach Sara Seyydin at, or follow her on Twitter @AJ_News.