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California Ties Water Heating to Sun

The California Public Utilities Commission (CPUC) last Thursday established the California Solar Initiative (CSI) Thermal Program to promote the installation of solar water heating systems in new and existing homes and businesses.

The newest statewide solar initiative applies to the service territories of the four major private sector utilities regulated by the CPUC and would include both natural gas- and electric-backed solar water heating systems. Natural gas enjoys major penetration in the state's water heating market, with more than 90% of the market. The goal is to displace millions of therms and kilowatt hours of gas and electricity now going to heat water. The program will run through the end of 2017, or until funds are exhausted, the CPUC said.

A state law passed in 2008 (AB 1470) drives the water heating effort, seeking to do what an earlier law (SB 1) set in motion for solar photovoltaic (PV) systems, which is now embodied in the 10-year California Solar Initiative, according to CPUC President Michael Peevey.

Support for the latest effort will come from $250 million collected from retail gas utility ratepayers and another $108 million from retail electric utility customers, which is already authorized under the solar PV initiative. The program will attempt to address not only the upfront costs of the solar systems but other factors affecting the transformation of the water heating sector in the state, Peevey said. Generally, the incentives should offset about 30% of the solar systems.

The goals of the CSI program are to:

Incentives will be paid upfront based on the first year of gas or electric energy displacement, and they will decrease in a four-step process over time. Solar-gas system incentives will begin at $1,500 and decline to $550 in the fourth step; for solar-electric the incentives start at $1,010 and drop to $380 in the fourth step. Up to 40% of the installations in the program will be in single-family homes.

"The dispersion of solar heating systems can play an important role as we strive to achieve the goal of zero net energy in residential and commercial buildings by 2020 and 2030 respectively, as outlined in the California Energy Efficiency Strategic Plan," said Commissioner Dian Grueneich.

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