Crossing the Finish Line for Shared Renewables in California


On September 11, 2013, the California Assembly passed Senate Bill 43 (“SB 43”) by a vote of 57-16 and the California Senate passed SB 43 by a vote of 27-12. SB 43, when signed into law, will create the Green Tariff Shared Renewables Program (the “Program”), which will enable rental tenants, schools, cities and many other interested parties to invest in California’s renewable energy projects.

SB 43 will allow customers of three investor-owned utilities– Pacific Gas and Electric Co. (PG&E), San Diego Gas & Electric Co. (SDG&E), and Southern California Edison Co. (SCE) -- to purchase up to 100% renewable electricity for their homes or businesses. The Program will enable utility customers that have no access to suitable on-site renewable energy generation to obtain renewable energy from an off-site renewable energy facility. Customers who buy shares in renewable developments will pay the associated costs and receive any associated financial benefits through lower electric bills. The Program will be administered by the California Public Utilities Commission (CPUC), which will decide which clean energy projects qualify for the program and oversee how the cost benefits are allocated to the customer.

The Program will be capped at 600 megawatts (MW). Of this total, 100MW of new renewable energy projects less than 1MW in size will be set aside to be built in disadvantaged communities, and 100MW will be reserved for residential consumers, such as renters and other customers who are unable to put solar panels on their own roof.

The Program requires no state subsidies. It is estimated that the Program will accommodate participation by 20,000 residential ratepayers, will create around 6,000 new jobs in the state, and will generate over $2.2 billion in economic activity within the next few years.

SB 43 is now on its way to Governor Brown, who is expected to sign the bill into law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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