U.S. Department of Energy - Energy Efficiency and Renewable Energy

Water Power Program

New California Energy Acts Include Incentives for Solar Water Heating

October 17, 2007

California Governor Arnold Schwarzenegger approved a number of energy bills on October 12th, including the Solar Water Heating and Efficiency Act of 2007. The act requires the California Public Utilities Commission (CPUC) to create financial incentives that will encourage the installation of solar hot water systems that displace the use of natural gas for water heating. As noted in the act, the California Solar Initiative currently provides incentives for solar hot water systems that replace electric water heaters, but no such analogue exists for systems that replace gas water heaters. The act requires the CPUC to establish a new fund for the incentives by adding a surcharge to the bills for most natural gas customers. See the bill on the California Legislative Information Web site.

Governor Schwarzenegger signed the solar water heating bill along with a number of other energy-related bills, including a bill that requires the California Energy Commission (CEC) to adopt energy efficiency standards for general purpose lights, a move that will likely phase out the use of inefficient incandescent light bulbs in the state. The bill, AB 1109, will also limit the use of toxics such as mercury in general purpose lights. In addition, AB 662 allows the CEC to set water standards for appliances, AB 1103 requires utilities to maintain energy-use data for nonresidential buildings, and AB 1560 requires the CEC to incorporate standards for water efficiency and conservation into the state's existing building standards. See the governor's press release and the information on AB 1109, AB 662, AB 1103, and AB 1560.

The governor also signed more energy-related bills later in the week, including AB 118, which raises vehicle registration fees by $2 to fund the Alternative and Renewable Fuel and Vehicle Technology Program. The new program will provide grants, loans, loan guarantees, revolving loans, and other appropriate measures to develop and deploy fuels and vehicles that will help California meet its climate change policies. The governor also approved AB 809, which limits the use of state funds for hydrogen vehicles, based on their greenhouse gas benefits, and which also expands the state's definition of hydropower that is eligible for the state's renewable energy requirements. The bill includes hydropower installed in water supply systems as well as incremental hydropower additions achieved through efficiency improvements at existing facilities. In addition, the governor approved AB 532, which extends the deadline for state buildings to install solar energy systems; AB 1613, which authorizes the CPUC to require utilities to buy excess power from combined heat and power systems; and SB 1036, which eliminates the Renewable Resource Trust Fund and refunds it to customers. See AB 118, AB 809, AB 532, AB 1613, and SB 1036.