California

Overview

California is a partially deregulated state. In California, the Single-Family Affordable Solar Homes (SASH) Program launched in 2009 along with its sister program, the Multifamily Affordable Solar Housing (MASH) Program. The programs were financed using 10 percent of the overall $2.2 billion budget from the ratepayer-funded California Solar Initiative (CSI), California’s unprecedented investment in solar market transformation that started in 2006. SASH and MASH are the first-of-their kind programs in the nation. Prior to SASH/MASH, there had not been dedicated low-income solar programs of this size and scope in any state.

The nonprofit organization GRID Alternatives was selected by the California Public Utilities Commission (CPUC)  as the program administrator for SASH. The program provides qualified low-income homeowners fixed, up-front, capacity-based rebates to help offset the cost of a solar electric system. Currently, the SASH program offers one incentive level of three dollars per watt. Eligible applicants must have a household income that is 80 percent or below the area median income, own and live in their home, receive electrical service from one of three investor owned utilities (PG&E, SCE, or SDG&E), and live in a home defined as “affordable housing” by California Public Utilities Code 2852.

Additional program elements include:

  • Gap funding from GRID Alternatives to cover the entire cost of the system;
  • Multilingual marketing and outreach to educate and establish trust in low-income communities;
  • Energy efficiency education and training for all participants;
  • Workforce development and job training initiatives that are incorporated into every installation; and
  • A focus on volunteerism and broad community engagement with solar in low-income communities.

Although the California Solar Initiative was scheduled to sunset in 2016, SASH/MASH were reauthorized by Assembly Bill 217 (Bradford, 2013), which extended funding until 2021 or until incentives are encumbered, whichever occurs first. By reauthorizing SASH, the California Legislature recognized that despite reduced solar equipment pricing, low-income families will continue to remain on the sidelines of the clean energy economy without continued price support and incentives. Under AB 217 (the Equitable Access to Solar Energy Act), implemented in January 2015, the SASH Program now also allows a “families-first” third-party ownership model that brings the benefits of the federal ITC to participating households. By increasing low-income households’ access to solar, the SASH program helps ensure that all ratepayers who contribute to solar programs also have the opportunity to access the benefits of the programs.

Additionally, in 2014 the state allocated California Climate Investments funds (funds generated by its cap-and-trade program) for low-income solar projects through the California Department of Community Services and Development’s Low-income Weatherization Program (LIWP). SB 535, passed in 2012, required that 25 percent of the cap-and-trade funds be used to benefit environmentally and economically disadvantaged communities. Using a similar structure to the SASH program, this program provides up-front rebates to qualifying residents, and can be used in tandem with SASH incentives for residents who qualify for both. The LIWP Program, presently includes a direct incentive ($4.75/watt to $1.75/watt rebate, based on eligibility for other funding programs); gap financing provided by the program administrator; and comprehensive programming (direct energy efficiency coordination and workforce development requirements).

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Guiding Principles Addressed

Accessibility and Affordability. The SASH Program utilizes ratepayer funds collected from electric ratepayers as authorized by SB 1 (Murray, 2006). In 2006 under  Assembly Bill 2723 and via D.07-11-045, the original SASH allocation was $108M. In 2013 under Assembly Bill 217 via D.15-01-027, another $54M was allocated to SASH. The program provides qualified low-income homeowners fixed, up-front, capacity-based rebates to help offset the cost of a solar electric system. Currently, the SASH program offers one non-declining incentive level of three dollars per watt. The remaining costs are borne by the program administrator, a nonprofit organization.

Community Engagement. Every SASH installation includes opportunities for community members and job trainees to participate. On sub-contracted installations, at least one job training graduate must be on site as a paid worker. These green job training opportunities form the backbone of SASH and create lasting value in local communities by helping foster a new green workforce – a workforce of skilled laborers, many hailing from the same communities that SASH aims to serve – that will have high employability in California’s expanding solar job sector.

Consumer Protection. The statewide program administrator for SASH ensures that all systems are cash-flow positive for a low-income household from day one. Incentives are deliberately set at a level to cover a significant percentage of the system cost. Any gaps in financing between the available incentives and the system cost are filled by the program administrator, a non-profit organization that contributes proceeds from a third-party ownership (TPO) arrangement and its own philanthropic fundraising. Under the SASH TPO offering, participating households have no financial liability to the system owner. The SASH program’s TPO model must meet 12 baseline consumer protection minimum standards, including ensuring customers receive at least 50% of the savings, as compared to standard utility rates, from the solar generating equipment. In practice, the minimum 50% savings is a “floor,” as most SASH households participating in the TPO model realize 80% savings or higher.  Importantly, the SASH TPO offering includes other consumer protections such as a prohibition on placing a lien on the customer’s home, requiring a clear explanation of how utility rate changes can affect savings, and protecting the customer against terms that could change after the contract is signed.  Aside from the TPO offering, the SASH program administrator acts as a consumer advocate.  Among other things, the SASH program administrator vets sub-contractors,  ensures field inspections are conducted for at least one in twelve installations, helps participants review contracts and contractual terms, translates materials into multiple languages, and ensures a 10 year warranty term for no-cost equipment repair and replacement (it’s a 20 year warranty for third-party owned projects).

Sustainability and Flexibility.  A successful low-income solar program must encourage long-term market development and be flexible in order to best serve the unique low-income market segment over time and as conditions and circumstances change. Since the SASH program launch in 2009, the program administrator GRID Alternatives has worked closely with the CPUC’s Energy Division staff to make program modifications as needed. Recommendations made by a third-party program evaluator can help inform program improvements. When the SASH and MASH programs were reauthorized under AB 217 in 2013, the Legislature and CPUC made significant changes to the programs by codifying a job training and workforce development requirement. The SASH program had incorporated workforce development since its inception, while the MASH program had not. Both programs had new reporting requirements for workforce development under the renewed funding. Recognizing the maturation of the third-party ownership market in CA, the CPUC allowed the introduction of a TPO model into the SASH program, provided a model was developed by the program administrator that met 12 baseline requirements ensuing consumer protection. The CPUC approved the first SASH TPO model and partner in June 2015 and the TPO model is used in over 75% of SASH projects in 2015-present.

Compatibility and Integration. The SASH program sizes systems based on annual electric usage, and reduces load to account for energy efficiency (EE) opportunities. Sizing systems under load incentivizes participating households to adopt EE measures, and the program administrator provides basic EE education and refers participants to the utilities’ no cost EE programs for low-income families. System size is capped at 5 kW in order to allow more families to participate in and benefit from the program while also ensuring substantive savings. The average installed system size for SASH is approximately 3 kW, well under CA’s state average of approximately 4.5 kW, and reflecting the modest-size homes the SASH program serves.

Last updated: Oct 2017