(a) In 2007, the San Francisco Solar Task Force (the “Solar Task Force”), convened by then Assessor-Recorder Phil Ting to provide analysis and policy proposals on how best to increase the development of solar energy in San Francisco, recommended creating the Solar Energy Incentive Program.
(b) The Solar Task Force report noted recent California Energy Commission data showing that average cost per kilowatt of solar energy installed in San Francisco was above the average cost of seven surrounding Bay Area counties; and data collected from the California Energy Commission and the California Public Utilities Commission showed that San Francisco ranked last in the Bay Area in terms of the solar energy installed per capita.
(c) The San Francisco Public Utilities Commission (the “SFPUC”) serves 17% of the City’s electrical demand, electric service providers serve 8% and Pacific Gas & Electric Company serves the remaining 75%. The SFPUC has installed eight megawatts of solar generating capacity as well as three megawatts of methane gas cogeneration capacity, which projects have bolstered the in-City renewable energy portfolio.
(d) The SFPUC continues to evaluate the development of additional large scale renewable energy generation assets within the City with the objectives of expanding and diversifying the renewable energy resources available to City departments and other SFPUC customers, boosting the City’s clean energy industry, and improving overall in-City energy reliability.
(e) The SFPUC has launched CleanPowerSF, a Community Choice Aggregation program, within the City. Implementation of CleanPowerSF allows the SFPUC to partner with private enterprise, leverage the purchasing power of a wider customer base and access the capital markets on a broader scale in order to expand its renewable energy generation asset portfolio.
(f) The Solar Task Force recommended implementation of a Solar Energy Incentive Program as one method to address this cost trend, in that an increase in private demand combined with appropriate measures to attract investment in the City’s solar manufacturing and installation industries over the long term could reduce the overall cost of solar energy as costs of importing such manufacturing technology and installation expertise are reduced or eliminated and economies of scale are introduced to the in-City solar industry.
(g) A successful solar incentive program would increase the installation of solar power, thus providing greater supply during peak demand times during the day and improving the reliability of in-City generation capacity using clean solar energy.
(h) The development of a more efficient and cost-effective in-City solar manufacturing and installation industry over the long term would result in savings for the SFPUC’s solar projects.
(i) The SFPUC has paid over $23 million in solar energy incentives since 2008. These incentive payments supported almost 3,800 installations that produce more than 13 megawatts of solar power, and created 172 new jobs for disadvantaged San Franciscans.
(j) Since 2008, the cost of solar power has declined significantly in San Francisco and the rest of the world.
(k) The Solar Energy Incentive Program is supporting more projects than ever before with less money. The annual budgets in fiscal years 2013-2014 and 2014-2015 were not fully subscribed but the kilowatts of solar power installed in San Francisco in those years was more than double the kilowatts of solar power installed in San Francisco in fiscal years 2011-2012 and 2012-2013.
(l) California’s Solar Initiative (“CSI”) has been ramping down its incentives and in 2014, the California Public Utilities Commission concluded that CSI has largely achieved its goal of stimulating widespread solar adoption and creating a self-sustaining market.
(m) The 30% federal tax credit for solar power has been extended, and the California Public Utilities Commission has put into place favorable net-energy metering terms for Pacific Gas and Electric Company customers installing solar power. San Francisco offers similar net-energy metering terms for its CleanPowerSF customers.
(n) In 2016, the Office of the Controller audited the Solar Energy Incentive Program and recommended improvements to the qualifications for additional incentives for low-income customers.
(o) Section 908 of the Environment Code requires San Francisco to reduce greenhouse gas emissions by 25% below 1990 levels by 2017; by 40% below 1990 levels by 2025; and by 80% below 1990 levels by 2050.
(p) In view of the City’s objectives in addressing the challenge of climate change, the positive benefits for the City’s overall power consumption market and the particular benefits for the SF-PUC’s Power Enterprise, the SFPUC intends to allocate $7.275 million of power revenues, including $2 million of Solar Energy Incentive Program surplus funds from fiscal year 2014-2015, towards funding the implementation of the solar incentive program described in this Chapter 18, with the objective of providing declining annual appropriations through fiscal year 2023-2024.
(q) To maximize the value of this investment, and in light of the reduced cost of solar power and the maturation of the solar power market in San Francisco, the SFPUC should simplify and reduce the solar incentives over time, while maintaining additional incentives for low income residents, Environmental Justice Districts, and use of installers maintaining their principal place of business in San Francisco.
(r) The City and the SFPUC intend this program to complement the SFPUC’s renewable energy capital programs, including CleanPowerSF, by attracting additional investment that will expand the development of renewable energy within the City and will spread the costs and risks of that development across a more diverse range of stakeholders.
(s) The SFPUC finds it beneficial to its customers and the environment to have financial incentive programs that will continue to be replenished during future budget cycles to support renewable energy and energy efficiency programs.
(t) As a complement to this initiative, the SFPUC, the Mayor, and the Board of Supervisors are pursuing the establishment of a stable rate structure for all of the SFPUC’s power customers, to enable the SFPUC to become a creditworthy bond issuer and to finance the City’s own renewable energy development projects on a more advantageous tax-exempt basis.