Close
Home
Collections
Login
USC Login
Register
0
Selected
Invert selection
Deselect all
Deselect all
Click here to refresh results
Click here to refresh results
USC
/
Digital Library
/
University of Southern California Dissertations and Theses
/
Solar energy: Some variable influencing increased utilization
(USC Thesis Other)
Solar energy: Some variable influencing increased utilization
PDF
Download
Share
Open document
Flip pages
Contact Us
Contact Us
Copy asset link
Request this asset
Transcript (if available)
Content
SOLAR ENERGY: SOME VARIABLES INFLUENCING INCREASED UTILIZATION Barbara Elaine Born A Dissertation Presented to the FACULTY OF THE GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR of PHILOSOPHY (Public Administration) December 1986 UMI Number: DP31160 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI Dîssflftaîiûfii UMI DP31160 Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 UNIVERSITY OF SOUTHERN CAUFORNIA THE GRADUATE SCHOOL UNIVERSITY PARK LOS ANGELES, CALIFORNIA 90089 This dissertation, written by Barbara Elaine Born under the direction of h.fJ.. Dissertation Committee, and approved by all its members, has been presented to and accepted by The Graduate School, in partial fulfillment of re quirements for the degree of DO C TO R OF PHILO SO PHY Dean of Graduate Studies Date December 19, 1986 DISSER l TIO N c o m m it t e e Chatrverson 11 DEDICATION Super Friend Solar Cat Muncher Ill ACKNOWLEDGMENTS I would like to thank my chairperson, David Lopez-Lee and committee members Elizabeth Graddy and Michael Moore for their encouragement and helpful sug gestions. My guidance committee members, Terry Cooper, James Ferris, and Donald Winkler, offered helpful com ments in the initial stages of this dissertation. The School of Public Administration's faculty and staff pro vided a positive environment throughout my doctoral pro gram. Thanks everyone for your support. To my friends, thanks for your encouragement, accepting me for who I am, and offering a counter-point to the academic world--for we cannot live in a one di mensional world, but must give priority to our spiritual values and a social consciousness. iv TABLE OF CONTENTS Dedication ii Acknowledgments iii Tables vi Figures viii I. ENTRANCE 1 Problem Statement 1 Research Design and Development 2 Dissertation Outline 4 II. LITERATURE REVIEW 6 Reasons for Concern 7 Solar Analysis Models 11 The Energy Market Place 12 Scenarios 14 Incentives 24 The Literature and this Dissertation's 28 Research III. SOLAR ANALYSIS MODEL 31 Development of the Model 31 Hypotheses 34 Research Design 35 Data Base Collection 36 Data Analysis 39 Results 40 Model Revision 49 Data 50 IV. DISCUSSION AND POLICY IMPLICATIONS 83 Need to Retain Tax Credits 84 A Decreasing Dependence on Petroleum 84 Reserves Employment 84 Revenue Generator 85 Environemntal Savings 85 Photovoltaics 86 Affordability for Low Income Consumers 86 Programs to Assist or Replace Tax Credits 88 Municipal Solar Utilities 89 Tax on Excessive Energy Use 90 Public/Private Research Lab 90 Housing Energy Efficiency Ratings 91 V Conclusion 92 Data 99 Bibliography 136 Appendix 148 Residential Solar Energy Tax Credit Survey 149 State Energy Offices Receiving Solar Energy 152 Tax Credit Survey of May 1985 Additional Information Sources Contacted 156 Municipal Solar Utilities Survey 158 Municipal Solar Utilities 159 Life-line Rates Survey 160 Utility Bills and Life-line Rates 162 TABLES vi 1:1 Federal Solar Tax Credits Summary 5 2:1 Eight Energy Scenarios 16 2:2 Equity Impact of Solar Energy Incentives 26 3:1 Tax Credits 51 3:2 Number of Residential Solar Systems 53 3:3 Spearman's r Calculation for Hypothesis A 54 3:4 High Tax Credit vs Low Tax Credit States 56 3:5 Annual Natural Gas Use per Residential Consumer 57 3:6 Annual Natural Gas Cost per Residential Consumer 59 3:7 Monthly Electricity Use per Residential Consumer 61 3:8 Monthly Electricity Cost per Resiential Consumer 63 3:9 Annual Fuel Bill per Consumer: 1984 65 3:10 Fuel Mix for Electricity Generation 1980-4 67 3:11 Solar Radiation: Annual Langleys 70 3:12 Per Capita Income 72 3:13 Energy Consumption and State Energy Self- Sufficiency 74 3:14 Property Tax Exemption for Residential Solar Systems 76 3:15 1984 Data 77 3:16 1981 Data 78 3:17 1980 Data 79 3:18 Hypothesis B Summary 80 4:1 Solar Tax Credits vs A General Tax Reduction 93 4:2 Lifetime Emission Reductions for Solar Systems Presently Installed in California 95 4:3 Solar Market Development Concept 96 4:4 Municipal Solar Utilities Questionnaire 107 4:5 Municipal Solar Utilities Cities' Population 108 4: 6 Municipal Soalr Utilities Cities' Median Income 109 4:7 Types of Municipal Solar Utilities 110 4:8 Goals of Municipal Solar Utilities 111 4:9 Percentage of Electricity Consumers Exceeding Life-line Amount 118 4:10 Percentage of Natural Gas Consumers Exceeding Life-line Amount 119 4:11 Baseline Rate Systems 120 4:12 Difference Between Life-line and Baseline Rates 121 vil 4:13 Life-line and Average Residential Electricity 122 Use 4:14 Life-line and Average Residential Natural Gas 123 Use 4:15 Percentage of San Diego Gas and Electric 124 Customers Exceeding Life-line Amounts 4:16 Tax on Electricity Consumers Exceeding Life- 12 5 Line Limits 4:17 Tax on Natural Gas Consumers Exceeding Life- 126 Line Limits 4:18 Major U.S. Photovoltaic Firms 130 4:19 Photovoltaics' Federal Budget Cuts 131 4:20 Market Barriers to Photovoltaic Development 132 4:21 Potential Revenue from Photovoltaics Research 133 Lab FIGURES VllL 2:1 Adoption of Innovations 20 2:2 Solar Decision Process 22 3:1 2X2 Gontingency Table Design 40 3:2 Hypothesis A: Tax Credits 42 3:3 Hypothesis B: Utility Costs 42 3:4 Hypothesis C: Fuel Mix 42 3:5 Hypothesis D: Solar Radiation 42 3:6 Hypothesis E: Income 43 3:7 Hypothesis F: Energy Consumption 43 3:8 Hypothesis G: Property Tax Exemption 43 3:9 Hypothesis A: 3X2 Contingency Table 45 3:10 Hypothesis G: 3X2 Contingnecy Table 45 3:11 Hypothesis D: 3X2 Contingency Table 45 3:12 Hypothesis A: Point Totals 46 3:13 Hypothesis G: Point Totals 46 3:14 Hypothesis D: Point Totals 47 3:15 Calculation Actual versus Ideal Points 47 3:16 Summary Actual versus Ideal Points 47 4:1 California's Solar Market Development Concept 97 4:2 Product Location in California's Solar Market 98 Development Concept CHAPTER I ENTRANCE Following the 1973-4 energy crisis, Americans in vestigated options to petroleum fuels. Biomass, wind, and cogeneration emerged as alternatives to supplement the nation’s energy mix. But solar energy became the primary alternative fuel source. With tax credits, some western states asserted the solar energy option, while other western states failed to offer incentive programs. In i i this environment, solar technology expaned during the la ter part of the decade, but budget cutting by states in the 1980's diminished or eliminated solar energy tax cre dits. This dissertation attempts to answer an obvious question: do tax credits increase the installation of residential solar systems? Problem Statement During the 1970's, federal and state tax credits encouraged and supported solar energy (see table 1:1 for summary of federal tax credits; state tax credits are summarized in chapter three.). Early 1970's solar tech nology failed to be cost effective compared to petroleum based fuels, so selected western states initiated tax credits to promote the industry's growth and development. During the secondary energy crisis of 1978-9, solar tech nology achieved closer parity as petroleum based fuel pri ces accelerated while the cost of solar hardware decrea^ sed. With this development, plus budget cutting measures in many ststes, the early 1980's were a time to question solar energy tax credits' future. Thus, we have a unique opportunity to address the earlier raised question: have western states' solar energy tax credits increased resi dential solar system installations or have other variables influenced installations? Research Design and Development The author's interest in solar energy arose ten years ago, in response to two national concerns. Ini tially, solar technology offered the option to utilize a renewable energy source and decrease dependence on vari able petroleum supplies. Secondly, solar technology raised concern for environmental quality. Solar techno logy was perceived as a vehicle to accomplish many tasks performed by petroleum based fuels, without the harmful environmental side effects from petroleum exploration, delivery, pipelines, and pollutants from combustion. In response to these two national concerns, solar technology expanded towards providing a major portion of the nation's energy needs. My exposure to solar technology included energy ex positions, visiting solar designed homes, solar generating stations, and extensive reading of solar technology and policy literature. During the ten years, I traveled ex tensively in the western states and observed that some states experienced rapid growth in the number of solar systems, while others did not. I noticed that states with tax credits appeared to have more solar systems installed. Against this backdrop of experiences, I have forwarded this dissertation--not so much to test whether incentives for using solar energy systems work, but rather to assess the extent and form of this relationship as mo dified by other variables. What follows in chapter two is a review of the literature, emphasizing a clear specifi cation of the literature's influence on the hypotheses' development; which is further described by the modeling process articualted in chapter three. The nature of this paper's model building was to hypothesize from my experiences and develop an environment to evaluate the hypotheses. By seeing solar hardware adaptations and reading the literature, I had experienced solar technology. Questions for which I had no answers surfaced and I could not readily identify the format or variables that contributed to the increased utilization of residential soalr applications. Dissertation Outline In the following literature review, I provide an analysis of the current solar literature and how my re search differs from previous studies. Chapter three pre sents the model, hypotheses to be tested, reserach design, data base collection, data analysis, results, and revised model. Drawing upon chapter three's findings, chapter four presents alternative information and funding sources to maintain solar system installations at current or ac celerated levels. TABLE 1:1 FEDERAL SOLAR TAX CREDITS SUMMARY Residential solar equipment has a 40 percent tax credit for the first $10,000 of cost, for a maximum credit of $4,000. The $4,000 maximum credit is a one time credit per dwelling, but renewable for new owners. Business can utilize the 10 percent investment tax credit plus depreciation on solar equipment with more than a three year property life and adjustments for Accelerated Cost>Recovery .System (ACRS), if elected. Solar energy tax credit limited to tax liability minus credit for elderly, investment tax credit, targeted job creidt, child care credit, political contribution credit, and foreign tax credit. The present law expired December 31, 1985, but the tax credit carryover remains for two years when tax liability is less than the tax credit. CHAPTER II LITERATURE REVIEW The mid 1970's energy crisis created gasoline and power rationing, in addition to an extensive array of en ergy literature. By forecasting the nation's collective energy future, the literature focus was broadly based. Projections forecasted prospects for the nation's energy mix and use, including proponents of nuclear power, coal, oil shale, wind, cogeneration, conservation, and solar. From this era arose a consenus for conserving energy while moving away from a heavy reliance on petroleum based fuels, due to instability of price and supply. The 1978-9 energy crisis saw a return of gasoline lines and power rationing. The literature focus shifted and became more myopic as a reaction to the mid 1970's energy crisis (Stobaugh and Yergin, 1979). Instead of a concern for national energy policy, the literature reflec ted means for conservation and alternative fuel sources, as people focused on means to alter their individual ener gy consumption patterns. For this chapter, the purpose is not to review the literature of a decade ago, but to evaluate the current literature. In three sections, the literature review ----------- y will present current books, government documents, and journals. Section one, "Reasons for Concern", addresses why solar is a policy issue of national concern. After establishing the national importance of solar, section two, "Solar Analysis Models", reviews the limited role solar plays in the national market, due to entry barriers and externalities. In addition, three of the literature's scenarios provide a focus for solar's limited role in the nation's energy market. Section three, "Incentives", re views tax credit and low interest loan programs that en hance solar's national viability. Throughout chapter two's first three sections, the literature's weaknesses are identified. Section four, "The Literature and this Dissertation's Research", dis cusses these deficiencies and introduces variables to ad dress the literature's weaknesses. Reasons for Concern From the mid 1970's energy crisis, the need for a balanced energy picture arose. It became evident that de pendence on one fuel source could contribute to severe supply shortages or price fluctuations. Attempting to diversify the nation's energy sources, the solar industry contends they failed to receive equitable tax and funding treatment compared to other fuels comprising the nation's energy supply. 8 Of the nation's $3 trillion GNP, one-seventh is spent on energy. (Energy investment comprises 40 percent of new factory and industrial equipment expenditures.) Studies by Heede and Zuckerman (1985) suggest present en ergy expenditures promote the least productive and most expensive forms of energy. Forty four billion dollars in federal spending supported the energy industry through agency budgets and low cost financing during fiscal year 1984. This equals one-fourth of the $180 billion federal budget deficit. Fossil fuel depletion and exploration lost the government $3.3 billion in revenues and depreci ation for capital intensive power plants diminished fe deral tax revenues by $17 billion (1984 dollars). During the same time, renewable energy tax credits lost the go vernment $550 million in revenue. Tax savings, low inter est loans, and agency expenditures provide greater bene^ fits for non-renewables fuels, as shown by the following distribution: Fuel Source Annual Lost Government Revenues Electric Utilities $22.0 billion Nuclear 15.0 Oil and Gas 13.0 Re new ab1ë s ; ; 11.7 Conservation .86 Fuel Source Nuclear Hydro Oil Efficiency Improvements Amount of Electricity Supplied per Fuel Source 2 percent 2 25 25 percent savings last 10 years 9 Percentage of Government Energy Related Expenditures 34 percent 5 20 less than 2 percent Heede and Zuckerman suggest that such expenditures encourage expensive and increasinly uncompetitive power plants. The authors suggest heavily subsidized energy supplies create fewer jobs per dollar invested compared to renewables and efficiency improvements. Another area of concern is the rationality of elim inating solar energy tax credits, just as emerging solar companies gain market maturity. According to the Califor nia Energy Commission, the lack of tax incentives to at tract private investment and a proven track record to ob tain conventional bank financing might cause many solar companies to face financial failure. The Commission's analysis supports the effectiveness of tax credits since California attributes the 10 percent of its energy supply from alternative fuels during the last five years to tax I credits. This contrasts with less than 2 percent five years ago (Imbrecht, 1983). Twenty-five percent by 1996 and SCE will provide 30 percent of its generating capacity from renewable sour ces by 1995, 10 To keep solar in the forefront of energy technology, Reece (1979) calls for solar companies to remain indepen dent of major corporations. He cites major corporation officers serving on alternative energy governmental com mittees and these same corporations continue capital in tensive traditional energy projects--while failing to in vestigate and implement solar technology. Reece perceives solar tax credits as a major support for independent solar companies to implement solar projects and increase the nation's alternative energy supply. Finally, the momentum of programs established during the 1970's is a reason to maintain solar energy tax cre dits. To neglect solar might signal the demise for solar development programs, such as the Solar Energy Research, and Demonstration Act (SERI--Solar Energy Research Insti tute, Golden, Colorado), Solar Heating and Cooling Demon stration, and Non-nuclear Energy, Research, and Development Act that promotes research, development, and demonstration opportunities for emerging solar technology (New and leer- man, 1980). Emerging solar companies rely on agencies such as SERI to improve technology and marketing strategies for introducing residential solar systems. The current tax incentives offered to traditional fuels, the question of which individuals or corporations influence national solar policy, and the concern to main- Il tain momentum from established solar development programs highlight the literature's emphasis on today's solar tech nology and development. The previous articles discussed by Heede and Zuck erman (1985), Reece (1979), and New and Icerman (1980) ad dresses solar policy expenditures, maintaining tax credits, and energy policy structure on a national basis. While these authors delineate issues of national concern for solar policy, they fail to assess solar policy's regional variations. This dissertation addresses this deficiency by including regional variables, such as state tax credits, utility rates and supply, climate differences and solar system property tax status. Section two will review con straints placed on solar's expansion due to entry barriers and externalities. In addition, three scenarios address limitations that might prevent solar from enhancing its position in the nation's energy future. Solar Analysis Models Residential solar market analysis contains several issues, including solar's position in the energy market place. Do barriers to entry exist, are externalities present that diminish solar's role as an issue of national concern, as expressed in section one. Secondly, several scenarios project parameters to limit solar's growth in the nation's energy picture. 12 The Energy Market Place New and Icerman (1980) present a series of barriers to the commercialization of solar energy. Mid 1970's tech nical concerns include improving collector efficiency, de veloping energy storage systems, and encouraging mass pro duction of solar units. These created barriers to entry since improving collector efficiency and developing sto rage systems require large research and development budgets and small firms had trouble generating the capital to fund expansion. Since the basic core of solar technology has been developed, the first two technical barriers have been mitigated. Future technology changes will probably be im provements on the basic knowledge core. Tax credits in creasing the demand for solar should encourage large scale production of solar systems, since in many applications solar cost per kilowatt equals the cost for conventional fuels. Residential consumers fail to realize solar cost is competitive with traditional utilities and this false per spective remains an entry barrier. Economic barriers influence residential solar con sumers. The high initial cost entails a significant capi tal outlay and is balanced with minimal long-term operating and .repair costs (New and Icerman, 1980). The consumer must weigh this against conventional fuels, with low ini tial costs and long-term operating and maintenance costs. 13 Solar energy tax credits reduce the initial capital out lay and a portion of the economic barrier. New and Icerman cite technical and economic con cerns as solar entry barriers. These barriers are the primary concerns for residential consumers considering solar. Further, the authors suggest consumers be informed of life-cycle costing, to compute energy systems' life n time cost and not just the initial purchase price. When shifting to non-renewable energy supply, sup ply and demand externalities place another constraint on solar. Noll, Roach, and Palmiter (1979) suggest consumers pay the average cost for utilities (past + current cost of infrastructure to supply utilities) on the demand side. After the 1970's, economies of scale in large power plants declined and due to inflated construction costs additions to present capacity cost more than previous additions. Today, consumers pay cheaper utility rates than if rates were based on today's generating station replacement costs. Further, the authors suggest that if consumers pay today's generating station replacement costs, the average cost of non-renewable utilities would exceed the consumers' cost for solar and consumers might install solar systems. This assumes solar options have equal accessibility with tradi tional fuels. With fewer consumers utilizing traditional fuels, the fixed cost for each remaining consumer would 14 increase and these consumers might be financially less able to convert to solar. On the supply side, Noll, Roach, and Palmiter sug gest that without tax credit incentives to invest in al ternative technologies, builders will construct the lowest cost structure allowable under the building code. For consumers, this might not be the most energy efficient and cheapest option in the long run. Scenarios While the first part of section two looked at entry barriers and externalities, constraints on solar's inclu sion in the national energy picture, the following scenar ios look at national, individual, and attitudinal forecasts placing constraints on solar energy. Pleatsikas, Hudson, and Goettle (1982) present a national dynamic general equilibrium model to create eight scenarios (see table 2:1). From their analysis, the auth ors present four energy forecasts: Economic growth continues under all energy conditions investigated. Under the worst conditions, the economy grows by 73 percent (HPHC), while the most favorable increases by 76 percent (LC) from 1980 to 2000. This suggests the economy demonstrates ability to adjust to 15 adjust to large changes in energy c conditions. While the difference in economic performance is small in relative terms (3 percent from 76 percent to 73 percent), the cumulative GNP losses for the least favorable HPHC compared to the most favorable LC case total nearly $700 billion. The economic effects of increased costs for non-renewable energy are considerably larger than the economic effects of changes in the cost and/ or quantity conditions for renewable energy. Reduced costs for renewable energy have . a beneficial effect on economic performance. 16 TABLE 2:1 EIGHT ENERGY SCENARIOS Lower Market Penetration of Renewables Fuel Prices and ITebhnology Costs for Non-renewable Energy Fuel Prices and Technology Costs for Renewable Energy Most Likely Lower Baseline trend R LC High trend HC LHC Higher Market Penetration of Renewables Fuel Prices and Technology Costs for Non-renewable Energy Fuel Prices and Technology Costs for Renewable Energy Most Likely Lower Baseline trend HP HPLC High trend HPHC HPLHC R LC HC LHC HP HPLC HPHC HPLHC Reference case Lower costs for renewables case Higher costs for non-renewables case Lower renewables costs and higher non renewables costs case Higher renewables penetration case Higher Penetration and lower costs for renewables case Higher renewables penetration and high non-renewables costs case Higher penetration and lower costs for renewables, with high costs for non renewables case 17 TABLE 2 :1--Continued SOURCE; Christopher J. Pleatsikas, Edward A. Hudson, and Richard Goettle IV, Solar Energy and the US Economy (Boulder, Colorado: Westview Press, 1982), p. 12. 18 Pleatsikas, Hudson, and Goettle feel a constraint on solar energy occurs as the nation follows the least favorable HPHC, instead of decreasing renewable cost per kilowatt and increasing GNP by following LG. As opposed to the previous scenario's broad nation al scope, Feldman and Wlrshaftr (1980) present a systems scenario to project the cost effectiveness of residential solar systems. This format reflects numerous governmental programs to compute cost savings from residential solar installations. The authors cite interest rates, fuel costs, and solar system costs as critical variables in computing cost feasibility. While these models are an at tempt to approximate solar energy savings, they present several theoretical concerns. One concern is the ease of using a model as a tradeoff with a model's accuracy. An example: Using a dwelling's square footage to determine energy demand and solar cost feasibility is a simplistic calculation, but accuracy is sacrificed because housing exposure (natural lighting, heating, and cooling potential), number of occupants, house construction type (stucco, brick), and quality (insulation R value; higher R value means greater insulation protection) all influence residen tial solar system cost feasibility. The model's ability to integrate long term weather projections is another problem. Most models select one 19 year's data and this might not reflect long term weather conditions. A final hard to quantify variable is the variation in consumers electricity load (average daily kilowatt use.) Since individual use of electrical appliances differs, the authors feel variation in consumer demand is particularly important in the cost-effectiveness model. Without a widely accepted cost-effectiveness scenario (by the solar industry and energy consumers), a constraint is placed on solar's role in national energy policy. Ambiguity creates confusion for an industry developing nationwide product standards and consumers comparing solar products. While the previous scenario looked at consumers' behavior for various dwelling styles, Farhar-Pilgrim and Unseld (1982) approach solar utilization through vari ables influencing consumers' attitudes towards solar. Traditional perceptions, that solar is an experimental technology, might constrain consumers' thoughts of solar's role in the national energy picture. The authors develop diffusion of innovations into a solar innovation decision process scenario. Adoption of innovations occurs over a long time frame and individual response is categorized into five divisions (see figure 2:1). Early adopters ben efit from the experience of innovators and minimize risk. Early adopters are frequently opinion leaders and act as a 20 social catalyst to encourage new projects. The late ma jority adopt innovation to avoid being left in a worse position relative to the rest of society. Laggards adopt innovation when they receive little benefit from new tech nology. When most people have adopted the innovation, market saturation occurs. Depending on the project, the o time frame might be one year or fifty years. I nno va t o r Early Early Late Laggards Adopters Maj ority Maj ority Time Frame Fig. 2:1: Adoption of Innovations (Farhar-Pilgrim and Un sold, 1982) Similiar perspective from Marketing Solar Energy Innovations (1981), Avraham Shama, ed.. Chapter one "Diffusion of Innovations and Solar Energy" and chapter six "The Diffusion of Active Residential Solar Energy Equipment in California". 21 Within this framework, the authors ask the follow ing questions: How well do the existing innovation decision process models fit the diffusion of solar energy? Is solar unique from other technological innovations? Given the diffusion process, what factors affect ultimate positive or negative position an individual takes toward solar energy and his/her behavior to adopt or reject it. Stages of the solar decision process model are: Initial awareness Knowledge and evaluation Decision and intention Action Observation of effects Continuance or discontinuance decision Farhar-Pilgrim and Unseld surveyed consumers for the first four variables. A graphic representation, in figure 2:2. shows the distribution. By evaluating consumers' attitudes in the solar innovating decision process model, Farhar-Pilgrim and Unseld found diffusion of solar technology is likely to follow a pattern similiar to other technologies. The at titudes and demographics of the typical solar consumer are : 22 A Action Decision/ Intention Knowledge/ Evaluation Initial Awareness Ignorance Fig. 2:2: Solar Decision Process (Farhar-Pilgrim and Unseld, 1982) - Younger age; under 35 - Male - High education level: college^ - Professionals, managers - Higher income; 35K+ - Prior energy conservation activity - Electricity and fuel oil as primary fuel - Perception that one’s household has been some, what seriously affected by the energy crisis - Interest in long term economic benefits from conservation 23 - Preference for individual and local control of energy decision making - Average to very high preference for government and industry involvement in the promotion of solar Farhar-Pilgrim and Unseld’s study suggests solar consumers are in the decision process’ initial awareness phase with very few consumers in the decision or action process. This constrains solar development, with a limit ed consumer base to purchase solar systems. The authors conclude that the solar adoption time frame can be accel erated with policy decisions, such as tax credits, to ha sten the growth of solar technology. The solar analysis model section of the present literature review presents two tangents. Market place variables, such as presented by New and Icerman (1980), suggest consumers calculate an energy investment’s life time cost. The literature’s deficiency occurs because the authors fail to identify variables associated with life cycle cost. This dissertation addresses this deficiency in chapter three’s modeling process. The second half of the literature review's solar analysis modeling portion addresses several scenarios. The primary deficiency occurs due to the use of generali zations and value judgements. Feldman and Wirshafter 24 (1980) present a systems scenario to assess the cost effectiveness of residential solar systems, but their variables fail to quantify variation in consumers' energy demand. Farhar-Pilgrim and Unseld's (1982) primary var iables look at highly subjective (difficult to quantify) consumers' attitudes toward solar. To diminish the lit erature's generalizations and value judgements, this dis sertation attempts to quantify the cost-effectiveness and consumers' attitudes toward solar to reduce constraints placed on solar's expansion. Incentives This section will review incentives to enhance the viability of solar in the national energy picture. For consumers, incentives include grants, income tax credits, accelerated depreciation, low interest loans, and property tax exemption. Table 2:4 details the impact of various consumer incentives. New and Icerman (1980) suggest a package of consumer incentives, including tax credits, low interest loans, and property tax exemptions, should be continued and expanded to assist the commercialization of solar. Beyard and Weiss (1979) supplement this idea by suggesting an explicit definition of systems covered under consumer incentive programs is needed to relieve ambiguity. This is especially important for passive and active sys- 25 terns used in applications other than water heating. By reducing ambiguity, consumers will be assured a system they're evaluating will be covered under an incentive program. Roesner (1981) presents an extensive historical re view of solar incentive programs, including income tax credits, solar heating and cooling demonstration programs, and government photovoltaic systems. He cites several significant programs to enhance solar installations. For New Mexico, the tax credit is not dependent on tax liabil ity, so a taxpayer may submit a credit request anytime during the year and promptly receive a check. Roesner suggests this program contributes to New Mexico having one of the largest increase in number of solar systems since the energy crisis. Initially, Roesner suggests, tax credits were not as important in the development of solar, since upper income consumers displayed environmental and ideological values that influenced consumers' decisions to purchase solar. But as solar installations increase, con sumers purchasing solar will display more economic con cerns and tax incentives will play an important role by reducing initial cost and decreasing life-cycle cost. Feldman and Wirshafter (1980), cite the need for solar energy tax credits to include credits for conserva tion measures. Without equal treatment of solar and con servation measures, solar will take precedent over con- 26 TABLE 2:2 EQUITY IMPACT OF SOLAR ENERGY INCNETIVES Incentives F avors Low income Upper and middle income Grants Income tax credits Income tax deductions Investment tax credits Accelerated depreciation Low interest loans Could by design Could by design No No No Yes Loan guarantees Yes Property tax exemptions Yes Could by design Yes Yes No No Yes--but less impact than on low income group Yes Yes 27 TABLE 2:2--Continued - - - - - i F avors Incentives Business Utilities Solar industry Grants Could by design No Yes Income tax credits No No Yes Income tax deductions No No Yes Investment tax credits Yes No Yes Accelerated depreciation Yes No Yes Low interest loans Could by design No Yes Loan guarantees Could by design No Yes Property tax exemption Yes No Yes SOURCE: Nancy A. New and Larry Icerman, Solar En- ; ergy Commercialization Barriers and Incentives : The Role of Electric Utilities (St. Louis: Center Technology, Department of Technology and Washington University, 1980), p. 100. for Development Human Affairs, NOTE: On page 87, the credit doubles the number of percent tax credit increases fifth. authors note a 40 percent tax solar systems, while a 20 solar installations by one- 28 servation--but a unit of energy saved by conservation equals a unit of energy saved by solar. The authors ap- plaude California's plan that includes conservation with solar tax credits when conservation improvements are in cluded with a solar installation. This reduces or elim inates the disparity between conservation and solar in centive programs. The present literature review's "Incentives" sec tion generally corresponds with the focus of this dis sertation. The Literature and this Dissertation's Research The works discussed in the preceeding literature review suggests that initially consumers purchased solar for environmental and conservation concerns. It has been noted that solar investments of the 1980's will be more influenced by income tax credits (Roesner, 1981). From these observations, the literature focuses upon the im pact of federal tax credits and doesn't assess variations of state solar energy tax credits. For this reason, the dissertation will evaluate the impact of solar energy tax credits on the the increase in number of solar systems, by state. The literature review addressed the relevance of 1 ife-cycle costs, but a specification of the important 29 3 variables is not clearly defined. This dissertation's research selects important life-cycle cost factors to include electricity cost and use, natural gas cost and use, and fuel mix for electricity generation (to assess price stability of electricity generation over time) variables. None of the literature reviewed evaluated the im pact of available sunshine on the decision to purchase solar.^ In the eleven western states, a variety of cli matic conditions offer the opportunity to review solar radiation's influence on the feasibility of solar instal lation. State energy use (as a percent of national average) and self-sufficiency are two variables which appear to be missing from the solar literature. This dissertation assesses the relevance of these variables on the solar decision making process. Consumers might opt for solar systems if they preceive low state energy supplies or excessive energy use. ^Boer et al, (1979) and New and Icerman (1980) discuss life-cycle costs. ^Farhar-Pilgrim and Unseld (1982) and Feldman et al. (1980) present a random survey of consumers in sun and snow belt states, but the results are inconclusive as to the impact of solar radiation. Feldman presents case histories of several western cities, including Colorado Springs and Albuquerque. - " 30 Several studies (New^and Icerman, 1980 and Roesner, 1981) cite the extensive use of property tax exemption as an important variable to encourage solar system installa tions. Since solar system property taxes would increase a tax bill marginally (i.e. $3,000 for a hot water system and the average house in the western United States is val ued at $80,000), this research asks why the literature classifies property tax exemption as an important variable The eleven western states have states with and without property tax exemptions for solar systems, so this dis sertation included it as a variable. Chapter two's literature review shows how national policy options can create constraints or incentives for solar energy. Chapter three, which follows, will develop the hypotheses to test which variables minimize the con straints and enhance the incnetives to increase solar installations. 31 CHAPTER III SOLAR ANALYSIS MODEL Drawing upon the preceding literature review, this chapter focuses on a solar utilization model. From this model, hypotheses were formulated allowing for an assess ment of: (1) the impact of solar energy tax credits on the increase in residential solar systems and (2) those vari- bles besides solar energy tax credits which influence the residential consumers’ decision to purchase solar. Development of a Model The model development addresses how solar consumers and the government perceive the energy market. New and Icerman (1980), Beyard and Weiss (1979), and Roesner : ( 1981 ) presented in the pre:C:ed:ing literature review that government policy can influence and direct the energy choices a society has. The authors suggested that if market barriers are removed or mitigated for solar, alter native fuels could compete with traditional fuels and encourage efficient energy choices. In this context, it is important that any proposed model assesses which vari ables influence the installation of residential solar systems, so policy can be directed towards the variables displaying the greatest impact. Very simply, residential 32 solar system installations are influenced by a variety of variables which are captured generally by: i=l Where : Y = Number of solar systems installed X. = Variables influencing the number of solar i=l ^ systems installed According to Heede and Zuckerman (1985), tradition al residential fuel sources, such as electricity and nat ural gas, offer consumers cheaper utility costs compared to solar applications. In this environment, consumers yield a higher rate of return from traditional utilities than solar systems. Government policies to subsidize traditional utilities in the past have increased consumer demand for inefficient capital intensive energy resources. New and Icerman (1980) infer the remedy for past ineffi ciencies will be the presence of solar energy tax credits to make solar technology cost competitive with traditional utilities. With tax credits as an incentive program, the solar industry would receive incentives like traditional utilities have. From this observation, it would then seem' reasonable to initially assume in the proposed model that traditional utilities yield equals solar yield with solar energy tax credits. 33 Since the initial part of the proposed model ad dresses the economics of consumers demand for energy as influenced by government policy, it seems reasonable for the second portion to address supply components. Sto- baugh and Yergin (1979) suggest the following: solar sup plies a stable energy source, without price increases or supply interruptions. This decreases consumers' risk of future cost increases associated with traditional fuels; yet few consumers opt for solar. For the consumer, the cost of utility supply equals the cost of initial invest ment plus the long-term direct monetary costs, such as supply interruptions and instability of price. Governemnt policy has created a market failure by subsidizing tradi tional fuels more than solar, so consumers over consume non-renewable fuels and solar cannot equally compete in the energy marekt place. For consumers, analyzing demand and supply compon ents of the solar decision means investing in solar if the yield equals or exceeds traditional utilities' yield. With this decision process, consumers must calculate in terest costs (with uncertainity) for purcahsing a solar system, to see if it is less than or exceeds the return from owning solar. Tax credits decrease the initial pur chase price and interest costs associated with purchasing solar and diminish energy market inefficiencies from past incentives offered to capital intensive traditional fuels 34 to enhance the return from owning solar. If the return ex ceeds interest costs, a consumer should purchase solar. This is defined as MEG or marginal efficiency of capital to promote productive use of energy resources. Hypotheses From the model, several hypotheses were derived. Solar energy tax credits decrease the initial purchase price and reduce interest costs. Since solar energy tax credits make solar technology cost more competitive rela tive to traditional utilities, it is reasonable to hypo- ' thesize that : A: State solar energy tax credits increase the number of residential solar systems installed. Other variables might also make solar technology's cost competitive to traditional utilities. For : example, variables which increase the cost of traditional utilities should create a more favorable environment for solar. Therefore, it is also hypothesized that: B: High utility cost increases the number of residential solar systems installed. C: Poor fuel mix increases the number of residen-: tial solar systems installed. D: High solar radiation levels increase the number of residential solar systems installed. E: High income levels increase the number of resi dential solar systems installed. F : High state energy use increases the number of residential solar systems installed. G: Favorable property tax exemptions for solar systems increase the number of residential solar systems installed. 35 Research Design If applying hypothesis A thru G to all fifty , - r states, it would suggest that a number of variables influ ence residential solar system installations. The follow ing equation includes variables relating to energy use, energy supplies, and incentive programs with respect to the states. n. = w. U T L . 4- w^FM. + w^SRAD. + w, SLFS. - t - 1 I i z i J 1 4 1 Wt-EUSE. 4- WaPTEX. 4- W-7TC. 4- r. 5 1 0 1 7 1 1 Where: n^ = number of solar systems in state i Wn = weight of each variable UTL^ = utility use in state FM^ = fuel mix in state SRAD^ = solar radiation in state SLFS^ = energy self-sufficiency in state EUSE^ = energy use in state PTEX^ = property tax exemption in state TC^ = tax credit in state r^ = random and unaccountable influences It would have been preferable to test the model using the data from all fifty states. The Department of Energy collected the data on a number of solar systems in stalled during the short time frame of 1979 thru 1981. No other agency or organization collected this data. Several states do not have energy offices to collect and coordinate energy data. For this reason, the author 36 surveyed the eleven western states because they have energy agencies (so it is possible to conduct an accurate survey of each state). They differ in climate, popula tion, and solar energy tax credit variables, thereby pro viding sufficient variability to the data for correlations (if any) to manifest themselves. Data Base Collection The author surveyed the eleven western states, during May 1985, to obtain the level of tax credits for hypothesis A. In addition, past surveys by the Solar En ergy Research Institute and Conservation and Renewable En ergy Inquiry and Referai service were used.^ The percent increase in systems between 1980 thru 1984 was obtained from two sources. For 1980, the number of residential solar systems were obtained from 1980 Solar Installation Survey (DOE, 1982). Since the government ceased publication of solar system installation data with 1981 statistics, the author surveyed each state, in May 1985, for 1984 data. (See table 3:2) The data base for hypotheses B thru G retains the eleven western states utilized in hypothesis A, for vari ety of climate, income, population density, level of solar ^See table 3:1, plus appendix pages 149-51 for copy of questionnaire. 37 energy tax credits, and number of solar systems per 1000 population. To obtain the data for hypothesis B thru G, the data collection included surveys to eleven western states, government documents, and energy association data In tables 3:5 thru 3:14, the data source for each var iable is listed. Hypothesis B includes natural gas cost (per 1000 cubic feet), natural gas use (per 1000 cubic feet), electricity cost (per kilowatt), and electricity use (per kilowatt hours). In tables 3:5 thru 3:9, these four i : variables evaluate the cost for the two primary household utilities; natural gas and electric. The amount used and cost paid (per unit of energy) for traditional utility supplies could influence a residential consumer's purchase of solar technology, because of the substitution effect. Traditional fuels would be replaced by solar, if solar was more cost effective. Supplementing the cost and use of electricity, hy pothesis C suggests a poor fuel mix supplying electrical generating capacity increases the number of residentail solar systems installed. While hydro costs are inexpen sive and relative constant in supply, dependence upon na tural gas or oil would render a state susceptible to sup ply interruptions and/or price increases in the future (table 3:10). Like the electricity and natural gas cost. 38 the substitution effect occures with fuel mix. High fuel cost mixes will be replaced by solar, if solar exhibits a lower cost. Hypothesis D suggest high solar radiation, measured in langleys, increases the number of residential solar systems installed. A higher langley reading offers more favorable solar feasibility compared to low level solar radiation (table 3:11). This variable reflects the envir onment's ability to accept solar technology. Hypothesis E, income level of residents, on a per capita basis, inclusion in the analysis was intended to assess a state's per capita income level in relation to solar system purchases (table 3:12). Through the income effect, a higher income level increases purchasing power and discreationary income to purchase a solar system. State energy consumption, as a percent of the na tional average, evaluates a state's level of energy use compared to the national average. Hypothesis F suggests states with high levels of energy consumption opt for solar as a buffer to imported energy sources and increased capital expenditures associated with construction and expansion of power generating stations. The substitution effect occures through trading energy use for conservation. This is also reflected in a state's level of energy self- sufficiency, as a percentage of the national average (table 39 3:13). Energy self-sufficiency acts as insulation from A the outside influences on energy prices and more self- sufficiency would decrease the need to convert to solar. Some states offer a property tax exemption for residential solar systems. For consumers considering a residential solar system, hypothesis G suggests favorable solar energy property tax exemptions increase residential solar system installations (table 3:14). A decrease in taxes generates more income through the income effect. Data Analysis The primary objective of this effort was not to assess the prediction side (left side) of the model and if in fact there is a relationship. Rather, the objective was to evaluate the magnitude of the relationship--to assess the fruitfulness of further model development. This was accomplished by simply employing Spearman's "r". For hypothesis A, the data was analyzed using Spearman's "r" to correlate tax credit levels to the 1980 thru 1984 percent increase in number of residential solar systems. Instead of Pearson's "r", this exploratory effort used Spearman's "r" because of the small data base (Blalock, 1979). To accomplish this analysis, tax credit levels were scored for dollar value and percent, since both factors are interrelated in calculating the consum er's final tax credit. The eleven western states tax 40 credit scores are ranked in table 3:3. TKe 1980 thru 1984 percent increase in number of residential solar systems calculations are ranked in a similiar manner. For hypothesis A thru G, the variables' ranking scales in tables 3:1 and 3:5 thru 3:14, reflect the median value corresponding to an average between the national and eleven western states median. In figure 3:1, the data is placed in 2 X 2 contingency tables : Low High High tax credit states a b No/Low tax credit states c d Fig. 3:1: 2 X 2 Contingency Table Design High tax credits states are Arizona, California, Colorado, Idaho, New Mexico, and Oregon. No or low tax credit states are Montana, Nevada, Utah, Washington, and Wyoming. The low/high division reflects data above (high) or below (low) the median value for each variable address ed ( e.g. tax credits, utility cost, fuel mix, etc.). Results For hypothesis A, the finding of r^ = .93 estimates that higher solar energy tax credits increase residential solar system installation over minimal or no solar energy tax credits. Hypothesis A's strength is further accentu ated by table 3:4. Idaho, Colorado, and New Mexico have 4: 1 the highest percentage increase in the number of residen tial solar systems, ranging from 744 percent to 1773 per cent increase in five years. Wyoming, Nevada, and Montana have low level or no solar energy tax credits and from 1980 thru 1984 the lowest level increase in number of sor lar systems, ranging from 25 percent to 91 percent. The magnitude of five years' percentage increase in no or low tax credit states' residential solar systems, further suggests consumers' sensitivity to solar energy tax cre dits in their purchasing decisions. Washington is the only other state without solar energy tax credits and its higher increase in the number of systems might be attrib uted to the environmental awareness expressed by Washing ton residents' purchases and political culture. This en vironmental ism lacks initiative in Montana, Nevada, and Wyoming.^ In figures 3:2 thru 3:8, the data results for hypo thesis A thru G are displayed in 2 X 2 contingency tables. The contingency tables will be reviewed to identify data patterns suggesting varaibles associated with : 1. low le vels of solar installations, 2. high levels of solar in stallations, or 3. a neutral response. 2 National Appropriate Technology Assistance Service of the National Center for Appropriate Technology, Linda White, Information Specialist and Staff, PO Box 2525 Butte, Montanaÿ 59702 ; . Telephone conversations fall 1985. 42 Tax Credits Low High High tax credit states 0 6 No/Low tax credit states 5 0 Median: 6 rank Fig. 3:2 : Hypothesis A; Tax Credits ($ + %) Natural Gas Bills Low High High tax credit states 4 2 No/Low tax credit states 2 3 Median : $484.41 Electricity Bills Low High High tax credit states 4 2 No/Low tax credit states 1 4 Median : $202.18 Fig. 3:3 : Hypothesis B: Utility Costs Fuel Mix Low High High tax credit states 2 4 No/Low tax credit states 4 1 Median : 5 rank Fig. 3:4 : Hypothesis C: Fuel Mix Solar Radiation Low High High tax credit states 2 4 No/Low tax credit states 3 2 Median: 437 langleys Fig. 3:5 : Hypothesis D: Solar Radiation Income Low High tax credit states 2 No/Low tax credit states 3 Fig. 3:6: Hypothesis E: Income Energy Consumption Low High tax credit states 4 No/Low tax credit states 2 43 High 3 3 Median: $10,295 High 2 Median: 106 percent Fig. 3:7: Hypothesis F : Energy Consumption Property Tax Exemption Low High tax credit states 3 No/Low tax credit states 4 High 3 1 Median: Yes/No Fig. 3:8: Hypothesis G: Property Tax Exemption From the previous contingency tables, there are three observations. The initial observation contradicts hypotheses B and F (see figures 3:3 and 3:7). According to these hypotheses, high utility cost and level of energy consumption should encourage the installation of residen tial solar systems, but high tax credit states display low utility costs and energy use. This suggests states with tax credits have low utility cost and energy consumption for several reasons. Alternative fuels, such as residen tial solar systems, decrease the need for traditional J utilities. In addition, most high tax credit states de- ---------------------------------------------------- 44 veloped extensive state energy plans that encourage con servation. These two factors would result in low utility use for high tax credit states, while states without a distinct energy plan would have higher energy use in con tradiction to hypothesis B. From the contingency tables, the second observation shows income levels and property tax exemption display a neutral response (see figure 3:6 and 3:8). A trend fails to emerge for hypotheses E and G. A minor observation from the solar system property tax exemption is the impor tance of the lower left hand square (see figure 3:8). If states have minimal or no solar tax credits, they usually fail to utilize alternative modes to encourage alternative fuels, such as solar system property tax exemption. For the income hypothesis, it should be noted that state data fails to display a trend to support hypothesis E. The in dividual income data for solar system owners (if available) might display a more distinct trend. Limited studies, re lating income to solar system ownership, suggest upper mid dle income residents own the majority of solar systems (35K+) (Farquahar-Pilgrim and Unseld, 1982). The final observation from the contingency tables shows tax credits, fuel mix, and solar radiation correspond with hypotheses A, C, and D (see figures 3:2, 3:4, and 3:5). High tax credits, a poor fuel mix, for price insta- 45 bility, inadequate supply, and decreased environemntal quality, along with high levels of solar radiation encour age solar installations. Building upon the variables favorably corresponding to hypotheses A, C, and D, tax credits, fuel mix, and so lar radiation, 3 X 2 contingency tables were constructed (based on national ranking of the variables) to generate an equation showing the impact from each variable on resi- dentail consumers' decision to purchase solar (see figures 3:9, 3:10, and 3:11). Tax Credits Low High tax credit states 0 No/Low tax credit states 5 Medium 2 0 High 4 0 Fig. 3:9: Hypothesis A: Tax Credits ($ + %) Fuel Mix Low High tax credit states 2 No/Low tax credit states 2 Fig. 3:10: Hypothesis C: Fuel Mix Solar Radiation Low High tax credit states 2 No/Low tax credit states 2 Medium 2 3 High 2 0 Medium 0 2 High 4 1 Fig. 3:11: Hypothesis D: Solar Radiation 46 Based on the distribution of each variable for the western United States, the contingency table ranking uses 1 point for low, 2 points for medium, and 3 points for high. Under an ideal representation of hypothesis A, C, and D, all the no/low tax credit states would appear in the lower left hand square, while all the high tax credit states would appear in the upper right hand square. On a point system, the no/low tax credit states would equal 5 points : 5(lower left hand square) x l(low) = 5 points The high tax credit states would accrue 18 points: 6(upper right hand square) x 3(high) = 18 points The analysis then calculates the actual point ranking for the three variables: hypothesis A: tax credits, hypothesis C: fuel mix, and hypothesis D: solar radiation in figures 3:12, 3:13, and 3:14. Tax Credits Low(l) Medium(2) High(3) Total High tax credit states 0 2 (2) 4 (3) 16 No/Low tax credit states 5 (1) 0 0 5 Fig. 3:12: Hypothesis A: Tax Credits Fuel Mix Low(l) Medium(2) HighO) Total High tax credit states 2 (1) 2 (2) 2 (3) 12 No/Low tax credit states 2 (1) 3 (2) 0 8 Fig. 3:13: Hypothesis C: Fuel Mix 47 Solar Radiation Low(l) Medium ( 2 ) HighO) Total High tax credit states 2 (1) 0 4 (3) 14 No/Low tax credit states 2 (1) 2 (2) 1 (3) 9 Fig. 3:14 Hypothesis D: Solar Radiation In figures 3:15 and 3:16, the calculation for act ual versus ideal points are shown for no or low (MT, NV, UT, WA, WY) and high tax credit states (AZ, CA, CO, ID, NM, OR). No/Low High Actual Ideal A-I Actual Ideal A-I Hypo A: Tax Credits 5 5 0 16 18 2 Hypo C: Fuel Mix 8 5 3 12 18 6 Hypo D: Solar Radiation 9 5 4 14 18 4 Fig. 3:15 Calcualtion Actual Versus Ideal Points No/Low High Total Actual-Ideal Actual-Ideal Hypo A: Tax Credits 0 2 2 Hypo C: Fuel Mix 3 6 9 Hypo D: Solar Radiation 4 4 8 Fig. 3:16 Summary Actual Versus Ideal Points 48 From the actual versus ideal total points, an equation was created to express the three variables' rel ative significance (tax credits, fuel mix, and solar ra diation). Tax credits had the least variation in actual versus ideal points, with a difference of 2 points. Fuel mix and solar radiation displayed higher differences, with 9 and 8 points respectively. With this data, the following equation expressed the realtionship between the variables of hypotheses A, C, and D: Influence on residential ^ Hypo. A ^ Hypo. C Hypo. D solar installations 2 points 9 points 8 points 1 = X + .22X + .25X Where: 1 = the sum of variables influencing residential solar installations X = variable influencing solar installations Greatest impact : actual versus ideal total points- Hypothesis A 2 points .> Hypothesis C 9 points X > .22X Hypothesis A 2 points >> Hypothesis D 8 points X > .25 X Therefore : 1 = X + .22X + .25X 1 = 1.47X . 68 = X Tax credits : .68 = X Fuel mix: .15 = .22X Solar radiation : .17 = .25X 49 Model Revision The results in table 3:18, plus data from tables 3:15 thru 3:17, suggest tax credits (.68), fuel mix (.15), and solar radiation (.17) influence the utilization of solar energy: system installation = I'.ll] + Solar radiation (.17) The 1984 relationship of r^ = .87 holds for 1980 and 1981, and the analysis suggest the revised model is: Increased level of tax credits, poor fuel mix, and increased level of solar radiation corresponds with a large number of residential solar system instal lations . CHAPTER III DATA TABLE 3:1 TAX CREDITS 51 ' State 1980 $ Credits 7o Rank 1981 Credits $ % Rank 1984 Credits $ % Rank AZ $1000 35% 2+6 $1000 35% 2+6 $1000 30% 2+6 CA 3000 15 4+3 3000 15 4+3 3000 10 4+2 CO 3000 30 4+6 3000 30 4+6 3000 30 4+6 ID 5000 7 6 + 2 5000 7 6+2 5000 7 6+2 MT 125 3 1 + 1 125 3 1+1 125 3 1+1 NV No credits No credits No credits NM 4000 25 5 + 5 4000 25 5+5 4000 25 5+5 OR 1000 25 2 + 5 1000 25 2+5 1000 25 2+5 UT 1000 10 2 + 2 1000 10 2+2 1000 10 2+2 WA No credits No credits No credits WY No credits No credits No credits Rank $ % 1 under $1000 1-5 percent 2 $1000-1999 6-10 3 2000-2999 11-15 4 3000-3999 16-20 52 TABLE 3 :1--Continued Rank $ % 5 $4000-4999 21-25 percent 6 5000+ 26-30+ SOURCES: "Annual Tax Credit Survey," Soalr Age Magazine (May/June 1983, 1984, 1985). Federal Tax Course, 1985 (Englewood Cliffs: Prentice Hall, 1985), p. 2418. 1985 Guidebook to California Taxes (Chicago: Commerce Clearing House, 1985), p. 124. J. David Roesner, Making Solar Laws Work (Golden, Colorado : Solar Energy Research Institute, November 1980), pp. D-2-3. State Tax Credit Summary (Silver Springs, Maryland Conservation and Renewable Energy Inquiry and Referai Service, June 1985). Surveys were mailed by the author to each state. 53 TABLE 3:2 NUMBER OF RESIDENTIAL SOLAR SYSTEMS State 1980 1984 (est) Percent change 1980-1984 AZ 25,930 100,000 285.65% CA 73,608 250,000 239.64 CO 3,140 28,000 791.92 ID 592 5,000 744.59 MT 2,193 4,200 91.52 NV 1,783 3,300 85.08 NM 1,388 26,000 1773,20 OR 3,025 9,200 204.13 UT 543 1,400 157.83 WA 1,579 4,300 172.32 WY 3,739 4,700 25.70 SOURCES: 1980 Data: United States Department of Energy, Energy Information Administration, Office of Coal, Nuclear:, and Alternative Fuels, 1980 Solar Installations Survey, October 1982. 1984 Data : Surveys were mailed by the author to each state. 54 TABLE 3:3 SPEARMAN'S r CALCULATION FOR HYPOTHESIS A State Tax Credit Score Rank Percent Increase in Systems Rank D. 1 D? 1 AZ 8 8.5 285.65 8 .5 .25 CA 6 6 239.65 7 I.O 1.0 CO 10 10.5 791.72 10 .5 .25 ID 8 8.5 744.59 9 .5 .25 MT 2 4 91.52 3 1.0 1.0 NV 0 2 85.08 2 0 0 NM 10 10.5 1773.20 II .5 .25 OR 7 7 204.13 6 1.0 1.0 UT 4 5 157.83 4 1.0 1.0 WA 0 2 172.32 5 3.0 9.0 WY 0 2 25.70 6(15) I 1.0 1.0 ll(ll2 - 1) = 1 _ 90 1320 = I - .0681818 55 TABLE 3 : 3--Continued r = .9318182 s Z = .9318182 - 0 1 /nT 11-1 ^ .9318182 .3162278 = 2.946679 56 TABLE 3:4 HIGH TAX CREDIT VS LOW TAX CREDIT STATES High tax credit states Tax credit ranking Percent increase in Low tax credit states systems 1980-1984 High: NM 10 1773.20 CO 10 791.72 ID 8 744.59 Low: MT 2 91.52 NV 0 85.08 WY 0 25.70 ANNUAL TABLE 3:5 NATURAL GAS USE PER RESIDENTIAL (1000 cubic feet) CONSUMER 57 State 1980 1981 1984 Use Rank U-s:e Rank Use Rank AZ 54 1 48 1 53 1 CA 76 3 69 3 70 3 CO 115 7 93 6 101 7 ID 79 3 71 3 68 3 MT 117 8 104 7 102 7 NV 79 3 76 4 66 3 NM 92 5 81 4 84 5 OR 74 2 68 3 67 3 UT 151 11 140 11 135 11 WA 88 4 79 4 76 4 WY 129 9 113 8 116 9 Rank 1980 1981 1984 1 under 68 under 60 under 58 2 68-75 60-67 58-65 3 76-83 68-75 66-73 4 84-91 76-83 74-81 58 TABLE 3 : 5--Continued Rank 1980 1981 1984 5 92-99 84-91 82-89 6 100-107 92-99 90-97 7 108-115 100-107 98-105 8 116-123 108-115 106-113 9 124-131 116-123 114-121 10 132-139 124-131 122-129 11 140+ 132+ 130 + SOURCES: United States Department of Energy, Energy Information Administration, Office of Oil and Gas, Natural Gas Annual, 1983, vol.1, 6 March 1985, pp. 34, 40, and 165-6. 1983 was the latest data available, so 1984 figures reflect estimates. ANNUAL TABLE 3:6 NATURAL GAS COST PER RESIDENTIAL (1ÜÜÜ cubic feet) CONSUMER 59 State 1980 1981 1984 Cost Rank Cost Rank Cost Rank AZ $2.19 1 $4.63 5 $6.64 8 CA 2.68 3 3.74 2 5.41 5 CO 3.74 6 4.17 3 5.51 5 ID 3.93 6 5.57 7 7.38 10 MT 3.56 5 3.75 2 4.63 2 NV 3.22 4 4.84 5 6.82 9 NM 3.07 4 3.85 3 5.50 5 OR 4.15 7 6.06 9 7.23 10 UT 4.14 7 3.23 1 4.26 1 WA 4.69 8 6.02 9 6.87 9 WY 3.63 5 3.51 2 5.13 4 Rank 1980 1981 1984 1 under $2.32 under $3.50 under $4. 35 2 $2.32-2.66 $3.50-3.84 $4.35-4.69 3 2.67-3.01 3.85-4.19 4.70-5.04 4 3.02-3.36 4.20-4.54 5.05-5.39 TABLE 3:6--Continued 60 Rank 1980 1981 1984 5 $3.37-3.71 $4.55-4.89 $5.40-5.74 6 3.72-4.06 4.90-5.24 5.75-6.09 7 4.07-4.41 5.25-5.59 6.10-6.44 8 4.42-4.76 5.60-5.94 6.45-6.79 9 4.77-5.11 5.95-6.29 6.80-7.14 10 5.12-5.46 6.30-6.64 7.15-7.49 11 5.47 + 6.65 + 7.50 + Bureau SOURCES: United of the Census, States Department of Commerce, Statistical Abstract of the United States, 1985, p. 571. United States Department of Energy, Energy Infor mation Administration, Office of Oil and Gas, Natural Gas Annual, 1983, vol.1, 6 March 1985, pp. 34, 40, and 165-6. 1983 was the latest data available, so the 1984 figures reflect estimates MONTHLY : ELECTRICITY TABLE 3:7 USE PER RESIDENTIAL (kw) CONSUMER 61 State 1980 Use Rank 1981 Use Rank 1984 Use Rank AZ 241 3 226 3 223 3 CA 219 2 218 2 178 1 CO 188 2 190 2 268 4 ID 405 8 406 8 461 9 MT 283 4 296 5 351 6 NV 306 5 289 4 314 5 NM 188 2 177 1 164 1 OR 513 11 494 10 450 9 UT 212 2 225 3 209 2 WA 589 11 672 11 540 11 WY 297 5 331 6 322 5 Rank 1980 1981 1984 I under 188 under 187 under 185 Z 188-222 187-221 185-219 3 223-257 222-256 220-254 4 258-292 257-291 255-289 62 TABLE 3 : 7--Continued Rank 1980 1981 1984 5 293-327 292-326 290-324 6 328-362 327-361 325-359 7 363-397 362-396 360-394 8 398-432 397-431 395-429 9 433-467 432-466 430-464 10 468-502 467-501 465-499 11 503 + 502 + 500+ SOURCES: United States Department of Energy, Energy Information Administration, Electric Power Monthly/ Quarterly, vol. 1980-4. United States Department of Energy, Energy Infor mation Administration, Energy Data of the States, vol. 1980-3. TABLE 3:8 MONTHLY ELECTRICITY COST PER (kw) 63 RESIDENTIAL CONSUMER State 1980 1981 1984 Cost Rank Cost Rank Cost Rank AZ 5.2Ç 5 5.9Ç 6 8. 4ç 9 CA 4.9 5 6.5 7 7.1 7 CO 5.1 5 5.4 5 5.6 5 ID 3.4 3 3.6 3 4.2 3 MT 3.3 3 3.7 3 4.8 4 NV 4.4 4 4.7 5 6.0 6 NM 5.4 6 6.1 6 7.6 8 OR 2.4 2 2.6 2 2.7 1 UT 3.6 3 4.3 4 4.8 4 WA 2.2 2 2.5 2 3.7 3 WY 4.5 5 4.9 5 5.7 5 Rank 1980 1981 1984 1 under 2.Iç under 2.3q under 2.8q 2 2.1-2.8q 2.3-3.Oç 2.8-3.5C 3 2.9-3.6 3.1-3.8 3.6-4.3 4 3.7-4.4 3.9-4.6 4.4-5.1 64 TABLE 3 : 8--Continued Rank 1980 , 1981 1984 5 4.5-5.2q 4.7-5.4q 5.2-5.9<: 6 5.3-6.0 5.5-6.2 6.0-6.7 7 6.1-6.8 6.3-7.0 6.8-7.5 8 6.9-7.6 7.1-7.8 7.6-8.3 9 7.7-8.4 7.9-8.6 8.4-9.1 10 8.5-9.2 8.7-9.4 9.2-9.9 11 9.3+ 9.5 + 10.0 + SOURCES: United States Department of Energy, Energy Information Administration, Electric Power Monthly/ Quarterly, vol. 1980-4 . United States mation Administration, Department of Energy Data Energy, Energy Infor- of the States, vol. 65 TABLE 3:9 ANNUAL FUEL BILL PER CONSUMER: 1984 State Use X Cost Annual fue Natural gas: (1000 cubic feet) AZ 53 $6.64 $351.92 CA 70 5.41 378.70 CO 101 5.51 556.51 ID 68 7.38 501.84 MT 102 4.63 472.26 NV 66 6.82 450.12 NM 84 5.50 462.00 OR 67 7.23 484.41 UT 135 4.26 575.10 WA 76 6.87 522.12 WY 116 5.13 595.08 TABLE 3 : 9““Continued 66 State Use X Cost X 12 months Annual fuel bill Electricity : (kw) AZ 223 8.4c 12 $224.78 CA 178 7.1 12 151.66 CO 268 5.6 12 180.10 ID 461 4.2 12 232.34 MT 351 4.8 12 202.18 NV 314 6.0 12 226.08 NM 164 7.6 12 149.57 OR 450 2.7 12 145.80 UT 209 4.8 12 120.38 WA 540 3.7 12 239.76 WY 322 5.7 12 220.25 67 TABLE .3 :10 FUEL MIX FOR ELECTRICITY GENERATION 1980-1984 State Coal Petroleum Natural Gas Hydro AZ 60.0% .9% 4.9% 34.2%' CA — — 2.0 44.8 35.6 CO 90.6 .1 1.2 7.9 ID — — -- 100.0 MT 40.5 .2 .2 58.8 NV 68.4 .2 3.9 27.4 NM 88.9 .2 10.6 .3 OR 1.4 — — ----- 89.5 UT 89.3 .2 .1 10.1 WA 6.8 — — -- 87.5 WY 95.7 .2 4.1 TABLE 3 :10--Continued 68: State Nuclear Other Rank AZ — — — ^ 6 CA 11.3% 6.3% 10 CO .2 — 6 ID — *3 1 MT — — 2 NV — — 6 NM — — 8 OR 9.1 .1 4 UT -- -- 5 WA 5.6 .1 4 WY - - 5 Rank Fuel Mix 1 Hydro only 2 Hydro, coal, petroleum 3 hydro, coal, nuclear 4 hyro, nuclear, coal 5 coal, hydro, petroleum 6 coal, hydro, natural gas 7 coal, petroleum, natural gas 8 coal, natural gas, hydro 69 TABLE 3 :10--Continued Rank Fuel Mix 9 Natural gas, hydro, petroleum 10 Natural gas, hydro, nuclear 11 Natural gas, coal, petroleum SOURCES: United States Department of Energy, Energy Information Administration, Electric Power Monthly (December 1984), pp. 13-8. J. David Roessner, Making Solar Laws Work (Golden; Colorado : November 1980), pp. D-2-3. TABLE 3:11 SOLAR RADIATION: ANNUAL LANGLEYS 70 ^ State Annual langleys Rank AZ 524 11 CA 460 9 CO 441 8 ID 366 4 MT 359 3 NV 489 10 NM 504 11 OR 354 3 UT 437 7 WA 315 1 WY 402 6 Rank Annual langleys 1 under 320 2 320-339 3 340-359 4 360-379 5 380-399 71 TABLE 3 :11--Continued Rank Annual langleys 6 400-419 7 420-439 8 440-459 9 460-479 10 480-499 11 500 + SOURCE: Map: Annual Mean Daily Solar Radiation (Langleys) (Golden, Colorado: Solar Energy Research Insti tute and United States Department of Energy), GPO-850-964 PER TABLE 3:12 CAPITA INCOME 72% 1 State 1980 1981 1984 Income Rank Income Rank Income Rank AZ $7727 5 $8413 6 $10295 6 CA 9046 9 9798 9 11850 11 CO 8851 9 9704 9 12061 11 ID 6748 2 7248 2 8601 2 MT 6949 3 7309 2 8263 1 NV 9111 9 9769 9 11547 10 NM 6674 2 7229 2 8744 2 OR 8013 6 8470 6 9687 5 UT 6827 3 7349 2 8765 2 WA 8749 8 9426 8 11264 9 WY 8689 8 9451 9 11540 10 Rank 1980 1981 1984 1 under $6400 under $7000 under $8550 2 $6400-6749 $7000- 7349 $ 8550- 8899 3 6750-7099 7350-7699 8900- 9249 4 7100-7449 7700-8049 9250- 9599 TABLE 3 :12--Continued 73 Rank 1980 1981 1984 5 $7450-7799 $8050-8399 $ 9600- 9949 6 7800-8149 8400-8749 9950-10299 7 8150-8499 8750-9099 10300-10649 8 8500-8849 9100-9449 10650-10999 9 8850-9199 9450-9799 11000-11349 10 9200-9549 9800-10149 11350-11699 11 9550+ 10150+ 11700+ Bureau SOURCE: United States Department of the Census, Statistical Abstract of Commerce, of the United 1984 are estimated income levels. 74 TABLE 3:13 ENERGY CONSUMPTION (Percent of National Average) STATE ENERGY SELF-SUFFICIENCY (Percent) State Energy consumption Rank Self- Rank Sufficiency AZ 88 percent 3 44 percent 7 CA 80 3 49 7 CO 88 3 94 2 ID 117 6 27 9 MT 131 8 100 1 NV 106 5 7 11 NM 112 6 100 1 OR 102 5 41 7 UT 96 4 100 1 WA 122 7 65 5 WY 244 11 100 1 Rank Energy consumption Self- sufficiency 1 under 70 percent over 95 percent 2 70-79 90-95 3 80-89 80-89 Rank Energy consumption Self-sufficiency 4 90-99 percent 70-79 percent 5 100-109 60-69 6 110-119 50-59 7 120-129 40-49 8 130-139 30-39 9 140-149 20-29 10 150-159 10-19 11 160 + under 10 percent SOURCE: Cambridge Information and Research Ser vices, World Directory of Energy Information, vol. 3 (New York: Facts on File, 1984), pp. 99-100, 103, 108-110, 113, 116-7, and 119. 76 TABLE 3:14 PROPERTY TAX EXEMPTION FOR RESIDENTIAL SOLAR SYSTEMS State 1980 Rank 1981 Rank 1984 Rank AZ Yes 1 Yes 1 Yes 1 CA No 0 No 0 No 0 CO Yes 1 Yes 1 Yes 1 ID No 0 No 0 No 0 MT No 0 No 0 No 0 NV Yes 1 Yes 1 Yes 1 NM No 0 No 0 No 0 OR Yes 1 Yes 1 Yes 1 UT No 0 No 0 No 0 WA Yes 1 Yes 1 Yes 1 WY No 0 No 0 No 0 SOURCES : See table 3:1. TABLE 3:15 1984 DATA 77 State Tax credits Fuel mix (.68) (.15) Solar Total radiation (.17) Rank AZ 8 6 11 8.21 9 CA 6 10 9 7.11 8 CO 10 6 8 9.06 10 ID 8 1 4 6.27 7 MT 2 2 3 2.17 3 NV 0 6 10 2.60 4 NM 10 8 11 9.87 11 OR 7 4 3 5.87 6 UT 4 5 7 4.66 5 WA 0 3 1 .62 1 WY 0 5 6 1.77 2 78 TABLE 3:16 1981 DATA State Tax credits Fuel mix Solar Total Rank radiation (.68) (.15) (.17) AZ 8 6 11 8.21 9 CA 7 10 9 7.79 8 CO 10 6 8 9.06 10 ID 8 1 4 6.27 7 MT 2 2 3 2.17 3 NV 0 6 10 2.60 4 NM 10 8 11 9.87 11 OR 7 4 3 5.87 6 UT 4 5 7 4.66 5 WA 0 3 1 .62 1 WY 0 5 6 1.77 2 TABLE 3:17 1980 DATA 79 State Tax Credits ( .68) Fuel mix (.15) Solar radiation (.17) Total Rank AZ 8 6 11 8.21 9 CA 7 10 9 7.79 8 CO 10 6 8 9.06 10 ID 8 1 4 6.27 7 MT 2 2 3 2.17 3 NV 0 6 10 2.60 4 NM 10 8 11 9.87 11 OR 7 4 3 5.87 6 UT 4 5 7 4.66 5 WA 0 3 1 .62 1 WY 0 5 6 1.77 2 TABLE 3:18 HYPOTHESIS B SUMMARY 80 State 1984 Variable rank Percent change in solar systems rank AZ 9 8 CA 8 7 CO 10 10 ID 7 9 MT 3 3 NV 4 2 NM 11 11 OR 6 6 UT 5 4 WA 1 5 WY 2 1984 rg= .87 1 81 TABLE 3 :18--Continued State 1981 Variable rank Percent : change.ih% solar systems rank AZ 9 8 CA 8 7 CO 10 10 ID 7 9 MT 3 3 NV 4 2 NM 11 11 OR 6 6 UT 5 4 WA 1 5 WY 2 1981 r = .87 s 1 82 TABLE 3 :18--Continued State 1980 Variable rank Percent change .in solar systems rank AZ 9 8 CA 8 7 CO 10 10 ID 7 9 MT 3 3 NV 4 2 NM 11 11 OR 6 6 UT 5 4 WA 1 5 WY 2 1980 r = .87 s 1 83 CHAPTER IV DISCUSSION AND ::PaLICYliIMPLICATIONS The future of solar in the western states has two paths: To continue or not continue solar's growth. This dissertation's results clearly demonstrate that tax cre dits encourage the use of residential solar systems (hypo thesis A). Negative policy implications would likely arise from the elimination of federal and/or state tax credits. The loss of tax credits would not mean just the demise of solar installations, but fewer job opportunities, diminished environmental quality, decreased governmental revenues, less photovoltaic development, and reduced affor dability for low income consumers to purchase solar. It was also found that a poor fuel mix and high so lar radiation levels (hypotheses C and D) apparently en hanced the use of residential solar systems. Policy tools to increase solar use and/or fund solar energy tax credits are discussed in this chapter, including municipal solar utilities (MSU), a tax on excessive energy use, public/ private research labs, and residential building ratings to inform consumers of a dwelling's energy use are discussed in this chapter as policy tools to increase solar use and/ or fund solar energy tax credits. The variables tested in hypotheses B, E, F, and G (utility cost, income levels. 84 state energy use, and property tax exemption) did not ap pear to be significant and are not discussed here. Need to Retain Tax Credits Federal solar tax credits expired December 31, 1985, while most states plan to phase out solar tax cre dits over the next two years. Since the federal govern ment and many states policy actions suggest tax credits are not needed as the solar industry becomes established, it is believed important to briefly enumerate the various policy implications associated with the retention of tax credits. A Decreasing Dependence on Petroleum Reserves Increasing the number of residential solar systems decreases dependence on petroleum based fuels. As new petroleum reserves become more costly to develop and pro duce, alternative fuels will be more cost effective and diminish the need for proven petroleum reserves. Employment , Solar employs, on the average, two to four times as many people compared to conventional energy sources yield ing the same amount of energy. Compared to a nuclear plant, solar creates five to ten times the number of jobs. Solar related jobs require minimal job training and are ideally suited for dispalced construction and factory workers at lower cost salaries compared to high-tech 85 nuclear technicians. Also, utility companies will save consumers' money by not having to construct expensive infrastructure associated with fossil and nuclear fuel generating stations. Revenue Generator While federal and statec.government view solar en ergy tax credits as an expenditure, tax credits generate revenue. In 1983, 65 percent of California's tax credit dollars were recovered from income, property, and sales tax. Compared to tax credits, a state tax rebate would recover only 22 percent through other taxes. Accounting for costs over the life of solar systems installed during 1983 (twenty years), the state will receive 169 percent of its' original investment through additional tax reven ue (Edison, 1983). (See table 4:1) Environemntal Savings Petroleum based fuels spill nitrogen oxides, carbon monoxide, hydrocarbons, and particulate into the environ ment. Solar applications decrease the use of convention al heating and cooling systems, so utilities burn less natural gas and oil to provide a direct environemntal b e n e f i t . Increased solar use will require production of solar hardware, but the pollution cost from this will be minimal since the Environmental Protection Agency (EPA) and state pollution control agencies have strict air 86 pollution regulations for plastic and metal fabrication plants. In California, the energy savings associated with solar installations will be 22.1 billion kilowatt hours of electricity and 880 million therms of natural gas for the the useful life of systems presently installed (Edison, 1983). (See table 4:2) Photovoltales While active solar systems are in the commercial market phase, photovoltales are only in the infant indus try/market introduction phase. (See table 4:3 and figures 4:1 and 4:2) Photo >voltalcs possess the potential to as sume a larger portion of the nation's energy needs com pared to active systems, since photovoltalcs supply elec tricity compared to active systems used primarily for wa ter heating. Wihtout tax credits to ease photovoltaic de velopment into the commercial market phase and make pho tovol talcs cost effective with traditional fuels (estima ted 1990), the contribution from photovoltalcs to an ener gy self-sufficiency and cleaner environment might be lost. Affordability for Low Income Consumers The loss of tax credits will inhibit lower income residents from purchasing solar. The literature suggests a majority of residential solar purchases come from con sumers in the $25,000 to $40,000 income bracket. In states 87 with the five largest increases in number of solar systems between 1980 to 1984, solar energy tax credit laws offer a three to five year tax credit carryforward. For residents with minimal tax liability, this offers the opportunity to use tax credits. The three states with solar energy tax credits, but no carryforward, have the lowest increase in number of systems installed among states offering tax cre dits. The tax carryforward option makes residential so lar systems more affordable for consumers in the $12,000 to $25,000 income range. Summary In summary, the fruition of hypothesis A (tax cre dits increasing the number of residential solar systems installed) is presently jeopardized by the elimination of federal solar energy tax credits. If the states follow the federal action and eliminate all solar tax credits a number of important policy implications must be addressed since they are concerns the nation failed to answer dur ing the past energy crisis--and they will arise again : Retain dependence on petroleum based fuels, decrease in employment opportunities, decrease in state revenues com pared to a conventional tax reduction, increase in envir onmental pollutants, diminish the ability of photovoltaics to supply electricity, and reduce the opportunity for low income consumers to purchase solar. If tax credits fail :88 to continue, the above mentioned issues are the consequen ces. Solar energy tax credits create a synergistic re sponse for energy use, environemntal quality, and future energy sources beyond 1986 and into the future. The fol“ lowing quotation summarizes energy's relationship to so ciety's quality of life. The energy policies adopted during the current decade will determine the range of social relationships a society will be able to enjoy by the year 2000... Energy provides choices and without energy we have no choices and human freedom and dignity will be diminished --but increased energy consumption isn't always better. C.A. Hooker (1981) Realizing energy's important social consequences, the following section reviews programs to encourage a diversified fuel mix. Programs to Assist or Replace Tax Credits With hypotheses A and C, the policymaker and con sumer can control two significant variables (tax credits and fuel mix) through incentive programs. A state's so lar radiation (hypothesis D) is the uncontrolled vari able, so the object remains to extract the most energy from available langleys. Tax credits, (as discussed in hypothesis A's analysis), remain an important vehicle to encourage residential system installations. To alter the real cost of electricity and natural gas and shape the ; 89 fuel mix, my research (detailed in chapter four's data section) evaluated several creative programs to augment solar energy tax credits. The programs are briefly sum marized here. Municipal Solar Utilities In California, municipal solar utilities (MSU) serve to supplement tax credits. Local governments may tailor solar development to their specific demographics and climate with MSU. This researcher conducted a survey of California MSU and a summary appears in chapter four's data section. Three types of MSU operate. A full ser+ vice model installs and maintains solar equipmant through rental, lease, or installment sale and maintains an own ership in the system. The broker model acts as a one stop shopping center for customers to select among vari ous private and public energy saving programs. A facili tator provides information and marketing for local pri vate firms. In many urban and regional areas of the eleven western states, MSU could inform consumers of so- systems to decrease fuel bills and/or offer installation with state tax credits, to make solar competative with traditional fuels, while altering the fuel mix towards renewable sources. Some likely canidates would be Denver, Phoenix, Salt Lake City, Las Vegas, and San Diego due to their adequate solar climate and growing popula . 90 tions stressing the traditional utility infra-structure. Tax on Excessive Energy Use The author conducted a survey of California util ities and number of consumers exceeding base-line elec+ tricity and natural gas use. As shown in chapter four's data section, many consumers exceed the base-line a- mounts, but by a very small amount. Instead of the pre sent tax on all energy use, a tax on energy use exceed ing base-line allocations would encourage consumers to practice conservation. This would increase the cost of electricity and natural gas and alter the fuel mix to wards renewables. In addition, the tax generated from excessive energy use could fund solar energy tax credits Publie/Private Research Lab Many small companies have trouble acquiring ven ture capital to develop, promote, and market new solar concepts. In chapter four's data section, I develop a scenario for a state (California is the example) operat ed research lab to assist small companies in promoting, marketing, and securing capital for new product designs. In exchange for this initial support, the state would receive a royalty from products sold under this agree ment. Funds generated from this project could supple ment solar energy tax credits. The eleven western 91 states could develop labs to encourage products for local needs, while generating funds to support tax credits. This format would shift a state's fuel mix variable away from petroleum based fuels toward an energy future util izing more solar options. Housing Energy Efficiency Ratings Chapter four's data section summarizes programs George Wolfson, a developer of solar communities in Cal ifornia, suggested to promote solar system installations. Like cars are rated for MPG, he feels housing units - should be rated for energy efficiency, through a state supported program to add legitimacy. For the eleven western states, this could be easily adopted to promote consumer awareness of solar systems and energy use. This type of program would influence fuel mix variables to make consumers more aware of homes' long term energy costs and promote dwellings with a favorable fuel mix and conservation design. To support tax credits and encourage an energy efficient fuel mix (hypothesis A and C), this researcher suggests that states can strengthen the role of tax cre dits and alLer consumers fuel use by adopting municipal solar utility programs on local and regional levels, tax ing excessive energy use, but not low level use, create research and marketing labs for new solar development. 92 and promote housing energy efficiency ratings. This type of approach will generate funds for solar energy tax credits, encourage solar installations, and energy conservation, as the eleven western states adopt pro grams to their regional needs. Conclus ion Consumers must be made aware of solar options and solar technology developers must be offered incentives to create advancing solar technology. The further use of tax credits should continue to promote solar as a major energy option. 93 TABLE 4:1 SOLAR TAX CREDITS VS A GENERAL TAX REDUCTION California Solar Energy Tax Credits: 1983 Expenditure - and Revenue Effects - Amount of monies spent for credits $78 million - State revenues from energy related investments $50.5 million - Revenues minus credits ($27.5) million - Revenues as a percent of spending on credits 65 percent California Solar Energy Tax Credits: 1983-2003 Expenditure and Revenue Effects from Systems Installed in 1983 - Amount of monies spent for credits $118 million - State revenues from energy related " investments $199 million - Revenues minus credits $ 81 million - Revenues as percent of spending on credits 169 percent 94 TABLE 4:1--Continued Alternative Use of Monies: A General Tax Reduction or Rebate - Amount of monies spent for rebate $167 million - State revenues from rebate $ 81 million - Revenues minus rebate ($ 86)million - Revenues as a percent of spending on credits 49 percent SOURCE: Karen K. Edison, Chairperson, Tax Credit Committee, California Energy Commission, California's Solar, Wind, and Conservation Tax Credits, 1983, p. 33. 95 TABLE 4:2 LIFETIME EMISSION REDUCTIONS FOR SOLAR SYSTEMS PRESENTLY INSTALLED IN CALIFORNIA Pollutant Emission Reduction Carbon monoxide 18.7 million pounds Hydrocarbons 6.2 Nitrogen oxides 95.0 Particulates 22.2 Sulfer dioxide 75.5 SOURCE: Karen K. Edison, Chairperson, Tax Credit Committee, California Energy Commission, California’s Solar, Wind, and Conservation Tax Credits, 1983, p . 48 Market Phase Concept 96 TABLE 4:3 SOLAR MARKET DEVELOPMENT CONCEPT Latent market Infant industry Market introduction Commercial market growth A need for a product that can not be produced. Idea concept. Design and experiment. Prototypes Testing and introduction of prototypes. Products produced individually with high unit capital costs, product price, and market uncertainty. Products and methods become standardized. Products produced in increasing volume, with decreasing unit capital costs. Sufficient profits to induce market growth. SOURCE: Karen K. Edison, Chairperson, Tax Credit Committee, California Energy Commission, California's Solar, Wind, and Conservation Tax Credits, 1983, p. 117 • • < D h J P w C C Sp > 1 J w C O< D h J B p Q J H : : 0 > M o 1 — 4 in o P d p > C i i Hc I E : ; . : 5 • H 0) a W - M 0) h - 1 t o e ■P <D C O > \ H M rC O pd p > C -H c S 1 5 -H W rP W O M <D pd O I p < D C O C o o 1 —1 C C S T3 • H p f: ■ c O 0) P C C J H Pd 15 < D P O e to p T) e s o C o •H o A P C C S 1 —4 C O •H P O X5 O P P c p <D Pd U (0 u p C O X5 c p c CO m c p P 1 —4 C < D • • 0 ) P d < i - w P P o C C c c 3 • p d P I s PO P •P o - - - - - - - - - - - - - - - - -p t L , C O 97 X CO E H C 0 r - l C O C O T — I 1 o o bO U <D p O c PL C O w < D o C O cu c - •H o C C S c o •H p p c p o «P c O •H < D tp — 1 B •P C U Q -i 1 — 1 O O C U • 1 — 1 U • • < D O 1 — 1 > • » p 1 — 1 < D c c Q o cu # C O e C L P p c U 0) cu P * 1 Pd C L O P P C U C O C C S •P C O C O S C C S o \ P P Z j o C O 1 — 1 C Ü p • » 1 — 1 * > iH cu O cu C O o cu p C O p p C O •H O •H - T3 e C C S M % B •H c u o C • -4 o P N d O c p ip c o •H •H cu iH 1 — 1 p p C U C C S c u C O P O Nd > o (p o p p • H 1 — 1 cu > cu Pd • H > p P cu cu O B C U 98 Latent Market Infant Industry Thin film and amorphous photovoltaic modules Photovoltaic grid-connected systems Large photovoltaic remote systems Market Intro Active space conditioning - Small photovoltaic remote systems Commercial Market Growth Solar hot water heating Solar pool heating Fig. 4:2: Product Location in California's Solar Market Development Concept SOURCE : Karen K. Edison, Chairperson, California’s Solar, Wind, and Conservation Tax Credits (Sacramento: California Energy Commission, Tax Credit Committee, 1983), p. 118. CHAPTER IV DATA 100 MUNICIPAL SOLAR UTILITIES Municipal solar utilities offer California cities the opportunity to supplement state tax credits. Local government may design solar development tailored to their demographics and climate, as exhibited by the variety of programs offered and methods used to finance these servi ces . The author mailed questionnaires to eleven Califor nia cities that expressed interest in municipal solar utilities (MSU) (California News and Comment, Nov. 1981). Eight cities responded. Five operate MSU and one city, San Jose, has an energy office. (See table 4:4) Demographics Cities operating MSU display similiar demographics, with population exhibitinh the greatest similarity. (See table 4:5) Excluding San Jose, that does not offer a full service MSU, the average population is 68,895. This fig ure is highly reflective of all MSU, except Arcata/Eureka. Situated on the rural northern California coast. Areata/ Eureka developed around the lumber and fishing industries. While they are not large cities, they remain the region's commercial hub. To extent it's market area, Arcata/Eureka's' 101 Humboldt Solar Utility is currently negotiating a contract with Humboldt County to expand MSU services county-widc. Income figures exhibit a divergence. (See table 4:6) MSU cities range from $13,110 in Arcata/Eureka to $24,743 in Palo Alto. In the past, solar applications concentra ted in upper income communities, but these communities dis play a wide income spectrum. Two of the most attractive programs operate in Arcata/Eureka and Oceanside--the low est income communities in the survey. Climate Only a fraction of California's diverse climatic zones are represented by MSU. To the south, the Mediter ranean climate in Oceanside and Santa Monica offers an ideal solar environment. The western Bay Area of Santa Clara and Palo Alto offers a somewhat less than ideal so lar climate, with cooler, foggy winter months. Areata/ Eureka, on the foggy northwestern California coast, posses the dampest California climate. Missing from the climatology picture are several regions without MSU. The Imperial and Coachella Vailles have intense utility needs for air-conditioning and agri cultural uses, along with intense year-round sunshine. While not as an intense sun, the San Joaquin Vally has numerous applications for MSU, with a rapidly expanding population base. The western and eastern Sierra slopes 102 offer a mild, sunny summer climate, with cool winter days; but many winter days are percipitation and cloud free. In addition, this region has experienced an increase of year-round residents. City Programs The California Energy Commission has encouraged development of MSU, whic were originally considered a prototype for the technology delivery service corporations investor owned utilities could become. The Energy Commis sion's 1979 Biennial Report called upon investor owned utilities to begin a closely supervised transformation of the utilities' role to energy service corporations. Yet MSU have a greater value for state consumers, as they can channel and focus a community's public and private energy resources. In addition, investment capital can be direct ed to small, localized, and decentralized energy suppliers (California News and Comment, Nov. 1981). In its broadest interruptions, MSU are a chartered organization which provides renewable energy related ser vices (see table 4:7). The primary focus has been on solar applications and mitigating the cost and concerns over the new technology's reliability. Three types of MSU exist-- the full service model, the broker model, and the facil itator/mediator (see table 4:8). The experienced return on capital has been 7 to 15 percent for cities 103 Implementing MSU (California News and Comment, November, 1981) . Arcata/Eureka Program started: April 1984 Participants: 45 as of June 4, 1984 Cost of program: Start up year $50,000 and $35,000 following years, including market outreach, bill ing, overhead, and personnel. Funding: Start up funds from California Office of Economic Opportunity grant and following years the program is expected to generate a small revenue for each participating city. Energy savings : Available after one year Services provided : Educational outreach, energy demonstration center, consumer protection measures, billing services, and complaint mitigation. Oceanside Program started : December 1981 Participants : 1,000 Cost of program: Start up year $25,000 for salary and fringe benefits and the following year $1500 for monthly billing. Funding : Initially internal funding and following years generate $1500 from lessor permits to install solar systems and 5 percent from systems the city 104 does monthly billing for (approximately one-forth of the systems). Energy savings: 160,000 to 200,000 therms per year Services provided : General solar information, in- formation on filing for tax credits, review of lease agreements between contractor and leasee,for consumer protection, and monthly lease billing if i the lessor desires. Palo Alto Program started : 1980 Participants : 500 to 1 ,000 annually in all phases of the program. Cost of program: $100,000 Funding: Utility revenues and the program nets $10,000 for the city annually. Energy savings : 800,000 therms annually by 1986 Services provided : Demonstration facilities, tech nical assistance, marketing, information services, and financial assistance through low interest loans. Santa Clara Program started: 1976 Participants : 450 Cost of program : $250,000 Funding : Utility reserve account, but budgeted a- mounts are repaid through lease payments. The 105 program nets $5,000 annually, plus a 7.5 percent on all capital invested. Energy savings: 200,000 to 300,000 therms annually. Services provided : The city designs, installs, and maintains solar systems for pools and domestic hot water heaters. Santa Monica Program started : 1983 Participants : Up to 15,000 annually Cost of program: Program costs paid by utility companies. Funding: Paid by utility companies Energy savings : $30 to $40 annually per housing unit. Program costs recouped in energy savings to the community in three years. Services provided: With utility company funds, the city contracts with a private firm to complete energy audits. The voluntary program offers resi dents free energy conservation measures, such as low flow shower heads. While saving the consumer up to $300 annually on utility bills, MSU (after the first year start up) produce positive revenue for cities through management fees and permits on solar systems. Past programs centered around hot water heating, but expansion to photovoltaics will 106 expand MSU financial horizons. Photovoltaics offer con siderably more applications within the existing MSU fra mework. Adaptability of Municipal Solar Utilities to Other Cities Municipal solar utilities have been sucessful in a handful of initial communities over wide income and cli matic environments. They tailored information services to meet community needs and encourage local citizen partici pation. The program supplemented federal and state solar energy tax credits with the information, legal (building permits, contracts), technological (system warranty), and financial (low capital outlay) support services to place solar within reach of more consumers. The programs reflect the communities' size. While initial communities averaged 70,000 population, the pro gram's structure is ideally suited for management by county-wide agencies, such as the Humboldt County proposal. This would be especially valuable to smaller communities in the San Joaquin, Imperial, and Coachella Vailles, where solar applications offer excellent prospects. While traditional California utilities have increased rates to offer low cost solar financing, to a tiny fraction of their consumers, MSU operate at a profit, encourage pri vate sector business, and have the potential to provide solar technology to a wider sector of the population. 107 TABLE 4:4 MUNICIPAL SOLAR UTILITIES QUESTIONNAIRE Cities mailed Replyed Operate MSU questionnaire Arcata/Eureka X X Bakersfield Monterey Park Oceanside X X Palo Alto X X San Dimas X San Jose X X Santa Clara X X Santa Monica X X Saratoga X Ukiah 108 TABLE 4:5 MUNICIPAL SOLAR UTILITIES CITIES' POPULATION City Population Arcata/Eureka 36,493 Oceanside 76,698 Palo Alto 55,225 San Jose 629,442 Santa Clara 87,746 Santa Monica 88,314 Average without San Jose 68,895 Average with San Jose 162,319 109 TABLE 4:6 MUNICIPAL SOLAR UTILITIES CITIES’ MEDIAN INCOME City Median Income Arcata/Eureka $13,110 Oceanside 14,969 Palo Alto 24,743 San José 22,886 Santa Clara 21,717 Santa Monica 16,604 Average household income $19,005 Type Features 110 TABLE 4:7 TYPES OF MUNICIPAL SOLAR UTILITIES Full service Broker Facilitator The municipal solar utility installs and maintains the solar equipment and through rental, lease , or installment sale arrangements maintains an owner ship in the system. The municipal solar utility acts as a one-stop shopping center for the cus tomer to select among various private and public programs that are most suited to the customer's ownership and financial requirements. The municipal solar utility acts as a facilitator and mediator by providing information, education, and a mar keting effoi'L fur the consumer and local private firms. SOURCE: "Six Cities Develop Municipal Solar Utilit ies," California Energy Commission News and Comment 1 (November 1981), p. 12. Ill TABLE 4:8 GOALS OF MUNICIPAL SOLAR UTILITIES Goal s - The municipal solar utility must provide service that is cost-competitive with conventional utility ser vices , but it must not undercut the private sector supplying the same renewable energy service. - The municipal solar utility is self-supporting after a specified level and period of subsidy. - The municipal solar utility provides a rate and level of return on borrowed capital equal to or better than a likely investor might receive elsewhere. SOURCE: "Six Cities Develop Municipal Solar Utilit ies," California Energy Commission News and Comment 1 (November 1981), p. 12. 112 UTILITY BILLS AND LIFE-LINE RATES Residential utilities offer many products to con serve energy. Insulation, caulking, solar heating, and solar air conditioning are several options for consumers to reduce utility use. Low interest loans, rebates, and tax credits encourage residential energy conservation. Still a number of residential consumers waste energy (see tables 4:9 and 4:10). 67 percent of electricity users and 58.5 percent of natural gas customers exceed life line limits in California. Besides energy conservation concerns, the role of life-line rates, as an income trans fer device, remains an important issue. To encourage en ergy conservation and generate funds for solar energy tax credits, customers exceeding life-line limits would pay a tax on their utility bills. For data on this concept, the author surveyed three major California utilities. The Life-line System and Consumers Utility Usage For consumers, the California Public Utilités Com mission established a life-line rate allocation system, with higher rates for usage in excess of life-line guaran tees.^ Each residential customer receives a monthly life On May 16, 1984, baseline rates replaced the ge neric term life-line rates in California. See table 4:12 for the minor rate changes. 113 -line allocation for cooking, lighting, and food refrig eration. Additional allocations are allowed for life sup port equipment, water heating, space heating, and in spe cific areas for air-conditioning (see table 4:11). Life line allocations vary with the time of year, climatic zone, and number of days in the billing period. Three major California utilities surveyed represent the climatic and demographic breadth of California's pu blic utilities. They cover 80 percent of the state’s residential electricity customers and 45 percent of the natural gas customers : Pacific Gas and Electric (PGE) Primary service area : San Francisco Bay area, northern California, and San Joaquin Valley Customers : Electric 3,097,264 Gas 2,750,697 San Diego Gas and Electric (SDGE) Primary service area : San Diego County and Imperial Valley Customers: Electric 722,036 Gas 509,606 Southern California Edison (SCE) Primary service area : Los Angeles and Orange Counties Customers: Electric 2,963,309 114 As shown in tables 4:9 and 4:10, customers exceed life-line rates by 67 percent for electricity and 58.5 percent for natural gas. The electricity figure repre sents a common percentage of consumers exceeding the life line rate, with a small range of 65 to 69 percent between the three utilities. The natural gas figures exhibit a divergence between the two natural gas companies, varying from 37 percent with PGE to 80 percent by SDGE. PGE and SCE do not keep statistics as to how many consumers exceed life-line rates by 10, 15, or 25 percent. SDGE keeps this stastic and it is interesting to note while more customers exceed gas than electric life-line levels (80 percent versus 69 percent) more customers exceed electricity life-line levels by 25 percent than gas customers (57 percent versus 42 percent summer and 25 percent winter (see table 4:15). Tables 4:13 and 4:14 dis play baseline versus average residential usage in kilowatt hours for electricity and thousand cubic feet for natural gas. Life-line Rates as an Income Transfer Device Life-line rates, as an income transfer device, have two dimensions. Burgess and Paglin (1981) reject the Public Utility Regulatory Policies Act of 1978 which sup ports life line rates to provide low-income customers affordable rates and charge higher rates for discretionary 115 use. The authors suggest this lead to inefficiency, as the optimal pricing principal is violated (marginal value equals marginal cost for all consumers). Their conclu- > sions show electricity lacks a strong, positive relation ship to income levels, as only 18 kilowatt hours per month can be attributed to each $1,00 of income. Citing their Portland, Oregon research and other studies, income's indirect impact on energy use (through variables such as propensity to occupy a single family dwelling and family size) offer weak correlations; even combining indirect and direct income elasticities results in only a .3835 cor relation. Since utility use varies largely unrelated to real income levels, Burgess and Paglin feel life-line rates should be abandoned as inefficient and inequitable: On the other hand, Garbacz (1982) suggests income has a strong, positive effect on the demand for electri city . He challenges Burgess and Paglin's data : Using a small N for low income participants in their study. Showing no difference in the monthly kilowatt hour mean between medium and low income custo mers, while national statistics show a 54.9 percent difference between the two groups. 116 Using a national data base, Garbacz concluded ^ life-line rates act as an income transfer device and should continue. bife-line Rates and Funding Solar Tax Credits Reviewing the two perspectives, one would have to conclude life-line rates subsidize low income consumers' utility use and charge upper income consumers higher : rates. Eithin this progressive rate system, a tax on excessive utility use could raise funds for solar energy tax credits. At present, California assesses a .020 cents tax for conservation and resource development on all kilo watts consumed. This generates $29.5 million annually. The natural gas rate includes a .007 cents state regula tory fee per thousand cubic feet, which produces $9.6 million annually. Instead of a tax on all energy use, a tax should be on excessive energy use for those exceeding life-line limits. Households with consumption less than life-line limits would not pay the tax. The proposed tax is .5 cents per kilowatt on electricity use and 50 cents per thousand cubic feet of gas (see tables 4:16 and 4:17). These charges would generate $175,446,770 from electricity and $176,903,980 from gas. The total of $352.3 million far exceeds the $27.5 million needed to fund 1983 level solar tax credits. The proposed tax is low enough, as not to be excessive. 117 but high enough to encourage conservation. For example, SDGE customers: 7 percent exceed electricity life-line rates by only 15 percent. 32 percent exceed gas life-line rates by only 15 percent in summer. 50 percent exceed gas life-line rates by only 15 percent in winter. Some simple, inexpensive (under fifty dollars) conservation improvements, such as energy savings light bulbs, cut back thermostats, and turning off heater pilots during the summer, would put a number of customers within life-line limits--offering customers less than a one year pay back against the tax. In time, the tax base would be reduced, as more customers conserved energy, but ample funds would remain to fund solar energy tax credits in California. 118 TART,F . 4:9 PERCENTAGE OF ELECTRICITY CONSUMERS EXCEEDING LIFE-LINE AMOUNT Company Percent of customers exceeding life-line amount Pacific Gas and Electric 65 percent San Diego Gas and Electric 69 Southern California Edison 67 Average 67 percent 119 ■ TABLE 4:10 PERCENTAGE OF NATURAL GAS CONSUMERS EXCEEDING LIFE-LINE AMOUNT Company Percentage of customers exceeding life-line amount Pacific Gas and Electric 37 percent San Diego Gas and Electric 80 Average 58.5 percent 120 TABLE 4:11 BASELINE RATE SYSTEM Baseline rate system: Baseline allowances determined by: The climatic zone a customer lives in; the state has twenty-six. The season; summer or winter. Whether space heating and water heating are elec tric or gas. A percentage of all energy used by residential customers. The average residential customer receives a 250 kilo watt hours per month allowance. Customers with electric space heating or water heating receive 500 kilowatt hours per month in summer and 800 kilowatt hours per month in winter. All natural gas customers receive an allowance of 20 therms in summer and 55 therms in winter. 121 TABLE 4:12 DIFFERENCE BETWEEN LIFE-LINE AND BASELINE RATES Rate feature Life-line Baseline Electric allowance 240 kwh 250 kwh Electric allowance with electric space or water heating Summer 490 kwh 500 kwh Winter 1,040 kwh 800 kwh /V Natural gas allowance Summer 26 therms 20 therms Winter 81 therms 55 therms '"Baseline rate is 4.5 cents lower than life line rate 122 TABLE 4:13 LIFE-LINE AND AVERAGE RESIDENTIAL ELECTRICITY USE Company Baseline Average allowance residential kwh use kwh Pacific Gas and Electric 304 kwh 532 kwh San Diego Gas and Electric 250 431 Southern California Edison 269 469 Average 274 kwh 477 kwh 123 TABLE 4:14 LIFE-LINE AND AVERAGE RESIDENTIAL NATURAL GAS USE Company Baseline allowance thousand cubic feet Average residential use thousand cubic feet Pacific Gas and Electric 4.5180 6.0825 San Diego Gas and Electric Summer 1.9379 Winter 5.3294 Average 3.6336 4.9418 Average for both companies 4.0758 5.5122 124 TABLE 4:15 PERCENTAGE OF SAN DIEGO GAS AND ELECTRIC CUSTOMERS EXCEEDING LIFE-LINE AMOUNTS Percent exceed Gas Electricity life-line by Summer Winter 10 percent 51 percent 32 percent 64 percent 15 percent 48 30 62 25 percent 42 25 57 125 TABLE 4:16 TAX ON ELECTRICITY CONSUMERS EXCEEDING LIFE-LINE LIMITS 477 Average residential kilowatt hours per month $.005 Tax on all kilowatt hours if con sumer exceeds life-line amount $2.39 Monthly tax 12 Months $28.68 Annual charge 9,130,433 Residential utility customers in California $261,860,850 .67 67 percent of electricity customers exceeding life-line limits $175,446,770 Annual revenues to fund solar energy tax credits 126 TABLE 4:17 TAX ON NATURAL GAS CONSUMERS EXCEEDING LIFE-LINE LIMITS 5.5122 Average residential use of natural gas per month (1000 cubic feet) $.50 Tax on all thousand cubic feet of gas if consumer exceeds life-line amount $2.76 Monthly tax 12 Months $33.12 Annual charge 9,130,434 Residential utility customers in California $302,399,970 .585 58.5 percent of natural gas cus tomers exceeding life-line limits $17 6,903,980 Annual revenue to fund solar energy tax credits 127 PHOTOVOLTAICS RESEARCH LAB Photovoltaics challenge energy development with extensive applications for all energy sectors. In the United States, three oil companies control the major photovoltaics firms, which make 79 percent of all photo voltaic sales. Forecasts show american and foreign de mand for photovoltaics will double every fifteen months to create a need for new suppliers and innovations. To fur ther California's photovoltaics production, the California Energy Commission, by establishing a photovoltaics re search lab to assist small photovoltaics companies in research and development, would accrue a 5 percent royalty from the gross sale of products developed at the lab. These funds could finance solar energy tax credits. Present and Future of Photovoltaics The greatest need and potential for solar energy is with photovoltaic applications. Four hundred square feet of panels offer enough electricity for residential peak demand, at a cost of $3,200 to $4,000 for the hard ware. In addition, photovoltaics are silent, have no moving parts, and for each megawatt of power produced 128 : nine tons of atmospheric pollutants are eliminated. Yet the federal government is abolishing photovoltaic funding, by slashing the $160 million 1981 budget to $28 million in 1983, while Japan and Germany increase photovoltaic funding. Thirty megawatt production in 1985 will increase to 4,000 megawatts by 2002, thus dramatically expanding the need for photovoltaic manafactures and installers. Thomas Edison originally estimated a light bulb to cost $98 and today they are 25 cents. Photovoltaic energy follows a similiar scenario. It was $100 per watt ten years ago and technology's role is to reduce the cost to 25 cents. The Reserch Lab The photovoltaic lab needs to break down market barriers and a public/private partnership must be formed to tackle the problem (Gandara, 1983). At the market introduction phase, many barriers, from resources to mar keting, exist to slow technology's progress--especially for small companies (see table 4:20). Yet the National Science Foundation determined small busineee produces 24 times more innovation per research and investment dollar. Also, small business created 86 percent of all new jobs in the private sector between 1969 and 1976. The photovol- taics industry sees small firms develop new products, but most small companies will not be able to remain indepen- 129 dent in developing and marketing their products --due to their inability to acquire venture capital. The present three firm market dominance inhibits technology develop ment and price competition (Imbrecht, 1983). By 1986, photovoltaic sales in California should reach $386 million and $1,472 billion by 1989. Assuming 20 percent of California's manufactured photovoltaics contained processes developed at the lab, the state would generate $3.68 million in 1986 and $14.72 million in 1989, from a 5 percent royalty on all products containing lab developed technology (see table 4:21). Due to the homo geneity of photovoltaics, the 20 percent figure is ex tremely conservative. In addition, existing California Energy Commission staff and facilities could develop the lab, with minimal start-up expense. The plan would partially fund tax credits, while enhancing the image and legitimacy of photovoltaic tech nology. In addition, the plan offers social benefits by increasing jobs, decreasing pollution, and promoting en ergy cost stability. Overall, this proposal should oper ate in conjunction with other solar energy tax credit funding options, as alone it could not generate enough funds to support the present tax credits. 130 Company Market share Supporting company ARCO Solar 26 percent ARCO Solarex 38 AMOCO Solar Power Corp. 15 EXXON TABLE 4;10 MAJOR U.S. PHOTOVOLTAIC FIRMS SOURCE: U.S., Congress, Senate, Committee on Energy and Natural Resources, Status of the United States Photo voltaic Industry and its Potential Foreign Markets, Hearing before the Subcommittee on Energy Research and Development. 97th Cong., 1st sess., 1981, p. 99. 131 TABLE 4:19 PHOTOVOLTAICS’ FEDERAL BUDGET CUTS Budget year Funding level 1981 $160 million 1983 28 million SOURCE: C.R. Imbrecht, Chairperson, California En ergy Commission, Securing California's Energy Future: Cal ifornia Energy Commission 1983 Biennial Report, 1983, p. 82. 132 TABLE 4:20 MARKET BARRIERS TO PHOTOVOLTAIC DEVELOPMENT Barriers Resource : Technology : Investment : Regulatory and Incentives : Marketing: Industries lack adequate knowledge of the availability and usability of potential energy resources. Industries will not use an alter native energy technology until convinced it is relaible, usable, and cost effective. New industries often have problems financing business ventures simply because the financial community is unfamiliar with their products. Alternative energy technologies often encounter government regu lations that inadvertently restrain developing alternatives that are technically and financially prom ising. Once other barriers have been over come, the problem remains to intro duce new products to existing mar kets. SOURCE: Charles R. Imbrecht, Chairperson, Califor nia Energy Commission, Securing California’s Energy Fu- ture: California Energy Commission Biennial Report, 1983, p. 57. -------------------------------- 133 TABLE 4:21 POTENTIAL REVENUE FROM PHOTOVOLTAICS RESEARCH LAB Item 1986 1989 Total California photovoltaics sales 20 percent of California's sales from lab developed technology California’s 5 percent royalty $386 million $1.472 billion 73.6 294.4 million 3.68 14.72 134 SOLAR HOUISNG DEVELOPMENTS 1 requested George Wolfson, President of Southampton Company, a developer of solar housing communities, to express three incentives he felt would promote solar systems in California over the coming three to ten years. In a letter of July 23, 1984, he detailed three proposals. 1. Tax credits They have been instrumental in promoting solar in the conventional housing market. They should continue as long as fossil fuels remain abundant. Other forms of taxation should be explored, such as negative taxation and redistributive impacts. A tax surcharge for use of energy above a base amount. State guarantee for minimum payback from solar systems. 2. Liability protection A state subsidized insurance pool to protect builders from system failure. 3. Publicity A state supported promotional effort to promote the use of solar in the state's housing indus try . 135 A state supported rating system for solar/ energy conservation levels in new housing developments, with regional divisions to assist home buyers in selecting energy efficient housing. In communities with rationed development lev els, developers with energy conservation con struction would receive priority approval of plans and building rights. BIBLIOGRAPHY 137 BIBLIOGRAPHY "Affordable Solar." Los Angeles Times, 6 February 1983, sec. 8, p, 26. American Petroleum Institute. Two Energy Futures; A Na tional Choice for the 1980's. Washington D.C.: American Petroleum Institute, July 1983. "Analyst Sees Sunny Future in Solar Stocks." Bakersfield Californian, 13 April 1984, sec. C, p. 9. "Apartments Get Electricity from the Sun." Los Angeles Times, 24 June 1984, sec. 7, p. 27. "Atlantic Richfield Uses Sunlight to Recover Kern's Heavy Oil." Bakersfield Californian 29 March 1984, sec. C, p. 5. Bank of America. Economic Outlook; California 1984. Dec ember 1983. Baumgardner, Eilleen. "Local Governments Active in Con servation." California Energy Commission News and Comment 7 (June 1982): 5-7. Beaumont, Marion S. and Imperati, Kathryn B. "The Public Sector Role in Solar Energy." Western Tax Review (Spring 1984): 146-76. Beyard, Michael D., and Weiss, Stuart. "Ways to Implement Government Incentives." In Sun II, pp. 2126-30. Edited by Karl W. Boer and Barbara H. Glenn, New York: Pergamon Press, 1979. Blalock, Hubert. Social Statistics. New York: McGraw Hill, 1979. Boer, Karl W., and Glenn, Barbara H., eds. Sun II: Pro ceedings of the International Solar Energy Society : Silver Jubilee Congress, Atlanta, Georgia, May 1979. vol.3* New York: Pergamon Press, 1979. Brunner, Ronald D. "Case Wise Policy Analysis : Another Look at the Burden of High Energy Costs." Policy Sciences 16 (2:1983): 97-125. 138 "Building World’s Biggest Solar Plant." Bakersfield Cali fornian, 7 November 1983, see. B, p.2. Burgess, Giles, and Paglin, Mo l Lon. "Life-line Electricity Rates as an Income Transfer Device: Cômment." Land Economics 57 (February 1981): 41-7. California. Regulations for the California Solar Tax Cre dit: Systems Installed During 1984. 1984. "California Solar Energy Code: Memo." Sacramento : Califor- Energy Resources Conservation and Development Com mission, 21 November 1983. Cambridge Information and Research Services Limited. World Directory of Energy Information, vol. 3. New York: Facts on File, 1984. Canales, Vincent, ed. Annual Planning Information: Los Angeles/Long Beach Standard Metropolitan Statistical Area. Los Angeles: California Health and Welfare Agency, Employment Development Department, 1983. Carter, Joe. "Proven Solar Options." New Shelter 5 (July/ August 1984): 74-7. "The Case for Conservation." California Energy Commission News and Comment 1 (November 1981): 17-9. "City Staff Support Movement to Solar Energy." Los Angeles Times, 19 March 1981, sec. 2, p. 4. Clark, Marshall, and Duffy, Rosemarie Morgan. Universe of Incentives for New Non-residential Construction. Sacramento : California Energy Commission, Conser vation Division, October 1981. Commons, Geoffrey D., Commissioner. "Preparation of the Commission's Fifth Electricity Report : Memo." Sacramento: Energy Resource Conservation and De velopment Commission, 26 June 1984. State Must be Sophisticated in Planning Energy Future." Los Angeles Times, 9 September 1985, sec. 2, p. 5. Conference Committee Ironing Out Differences in Tax Bills." Solar Eclipse 2 (May 1984): 2. 139 "Direct Conversion High Desert Solar Tower Plant Opens." Los Angeles Times, 15 February 1983, sec. 2, p. 1. Edison, Karen K., Chairperson. California Soiar Energy Code: Revised Draft. Sacramento : California Energy Commission, Tax Credit Committee, 26 September 1983 _________. California's Solar, Wind, and Conservation Tax Credits. Sacramento : California Energy Commission, Tax Credit Committee, 1983. "Energy Conservation and Its Prospects." Beijing Review 27:46 (November 12, 1984), pp. 20-3. "Energy Conservation Becomes Multi-bill ion Dollar Indus try." Bakersfield Californian, 15 April 1984, sec. E, p. 16. "Energy Troubles Loom for United States, Experts Warn." Los Angeles Times, 18 March 1984, sec. 1, pp. 1 and 25-6. Energy Watch. Sacramento: California Energy Commission, May, 1984. "Euphemisms Make Tax Hikes Palatable." Bakersfield Califor nian 15 April 1984, sec. A, p. 10. "Eureka Solar Program is Formally Launched." Times-Stan dard , 18 August 1983 (no page number given). Farhar-Pilgrim, Barbara, and Unseld, C.T. America's Solar Potential : A National Consumer Study. New York: Praeger Special Studies/Scientific, 1982. Feldman, Stephen L., and Wirtshafter, Robert M. On the Economics of Solar Energy: The Public Utility Interface. Lexington, MA.: Lexington Books, 1980. "Financial and Non-financial Incentives for New Non-res- idential Building Regualtions." Sacramento : Cali fornia Energy Commission, 26 May, 1984. "First All Solar Home in the Country." Los Angeles Times, 14 November 1982, sec. 7, pp. 20 and 27. "Four Nations Dominate World Energy Scene." Arizona Re- public, 26 November 1983, sec. G, p. 7. 140 Frieden, Bernard J., and Baker, Kermit. "The Market Needs Help; The Disappointing Record of Home Energy Conservation." Journal of Policy Analysis and Management 2 (3:1983): 432-48. Friedlander, Susan C., and Saywer, Stephen W. "Innovation, Traditions, Energy Conditions, and State Energy Policy Adoption. Policy Sciences 15 (4:1983): 307- 24. Gandara, Arturo, Commissioner. "Availability of Funding from the Energy Bank Program: Memo." Sacramento : California Energy Commission, Loans, Grants, and Economic Impacts Committee, 9 April 1984. ________ . "Photovoltaics--An Industry Dependent on Public/ Private Partnerships." California Energy Commission News and Comment 8 (August 1983): 6-7. Garbacz, Christopher. "Lifeline Electricity Rates as an Income Transfer Device : Comment." Land Economics 58 (May 1982): 228-34. Goldberg, Larry. A Guide to Solar Leasing in Humboldt County. Eureka : Humboldt Solar Utility, 1984. Gollop, Frank M., and Roberts, Mark J. "Environmental Regulations and Productivity Growth: The Case of Fossil Fueled Electric Power Generation." Journal of Political Economy 91 (4:1983): 654-74. "Harnessing the Sun: Texas Firm Cuts Cost." Register, 25 December 1983, sec. B, p. 8. Hart, Stuart L. "The Federal Photovoltaics Utilization Program : An Evaluation and Learning Framework." Policy Sciences 15 (4:1983): 325-43. Heath, Gary C. "Electricity Report : Memo." Sacramento : California Energy Commission, 5 April 1984. Heede, H. Richard, and Zuckerman, Seth. "US Pays a Heavy Cost for Energy Investments." Los Angeles Times, 22 December 1985, sec. 5, pp. 3”and 6. "Homeowners' Sucess in Slashing Fuel Bills Reflects Advances in Energy Technology." Wall Street Jour nal , 28 November 1983, sec. 2, p. 33. 141 Hooker, C.A.; MacDonald R.; VanHulst, R.; and Victor P. Energy and the Quality of Life; Understanding En- er%y Policy. Toronto: University of Toronto Press, 1981. Horn, Mickey. Energy Performance Computer Programs. Sac ramento: California Energy Commission, Building and Appliance Standards Office, August 1980. Hubbard, R. Glenn, and Weiner, Robert. "When the Oil Spigot is Suddenly Turned Off: Some Further iiov Thoughts." Journal of Policy Analysis and Manage ment 2 (2:1983): 299-302. Imbrecht, Charles R., Chairperson. "Petroleum Violation Escrow Account : Memo." Sacramento: California En ergy Commission, 9 May 1984. _________ . "Renewable Energy Technologies." California Energy Commission News and Comment 12 (Fall 1983): 4-5 and 15. _________ . Securing California’s Energy Future : California Energy Commission 1983 Biennial Report. Sacramento California Energy Commission, 1983. "Important Changes to California's Solar and Wind Energy Tax Credits: Memo." Sacramento : California Energy Commission, 19 October 1983. Katzman, Martin T. Solar and Wind Energy; An Economic Evaluation of Current and Future Technologies. Totawa, NJ: Rowman and Allanheld, 1984. Kelly, Henry. "Photovoltaic Power Systems : A Tour Through the Alternatives." Science 199 (10 February 1978): 634-43. Kelly, Thom. "Financing California's Energy System." California Energy Commission News and Comment 13 (Spring 1984): 10-5. Kim, Joochul; Berkowitz, Paul I.; and Lockhart, Lynne. Analysis of Arizona's Solar Energy Tax Credits. Phoenix: Arizona Solar Energy Commission, 1984. "Leasing Solar Can Mean Money in Your Pocket." Times- Standard 25 September 1983 (no page number given). 142 Leonard-Barton, Dorthy. "The Diffusion of Active Residen tial Solar Energy Equipment in California." In Marketing Solar Energy Innovations, pp. 145-83. Edited by Avraham Shama. New York: Praeger Special Studies/Scientific Department, 1981. McDanield, B. "The Effects of Tax Credits on the Price Cofflpetiveness of Residential Solar Energy." Social Science Journal 20:4 (October 1983), pp. 65-77. Magma Power Company. 1983 Annual Report. Los Angeles. Millenbah, Phil, and Sansone, Jennifer. Oceanside's Municipal Solar and Conservation Utility Solar Leasing Plan: A Model for Other Cities. Oceanside : City of Oceanside, Office of Energy Coordinator, 1982. Mortenson, Robert R. City of Santa Clara: Solar Projects. Santa Clara: City of Santa Clara Solar Management Project, 1984. "National Energy Policy: A Summary." U.S. Department of Energy Information: News Summary. 11 October 1983: 4-6. New, Nancy A., and Icerman, Larry. Solar Energy Commer cialization Barriers and Incentives : The Role of Electric Utilities. St Louis: Washington Univer sity, Center for Development Technology, Department of Technology and Human Affairs, 1980. Noll, Scott A.; Roach, Fred; and Palmiter, Larry. "Energy Planning With Solar and Conservation: Individual Values and Community CHoice." In Sun II, pp. 2036- 40. Edited by Karl W. Boer and Barbara H. Glenn, New York: Pergamon Press, 1979. Olson, I.F. "State Solar Incentives for Solar Energy." Journal of Energy and Developemnt 6:2 (Spring ‘ ' 1981), pp. 281-96. Oregon. First Biennial Energy Plan: 1985-7. Eugene: Oregon Department of Energy, 1985. Pleatsikas, Christopher J.; Hudson, Edward A.; and i ' Goettle, Richard IV. Solar Energy and the US Econ omy . Boulder, CO: Westview Press, 1982. M 3 Pressman, Jeffrey L., and Wildavsky, Aaron. Implemen- tation. Berkeley: University of California Press, 1979. "Putting the Sun to Work for You." Register 30 June 1984, sec. E, pp. 1-2. Quarterly Oil Report. Sacramento: California Energy Com mission, June 1984. Rapp, Donald. Solar Energy. Englewood Cliffs: Prentice Hall, 1981. "Ratepayers' Savings Will Exceed $5 Billion from CEC's Load Management Program." California Energy Com mission News and Comment 1 (November 1981): 6-7. Reece, Ray. The Sun Betrayed : A Report on the Corporate Seizure of the US Solar Energy Development. Boston: South End Press, 1979. "Regulations for the California Conservation Tax Credit 1984 Edition : Memo." Sacramento : California Energy Commission, 30 April 1984. "Residential Building Standards Promise Lower Utility Bills." California Energy Commission News and Comment 1 (November 1981): 1 and 8. Roesner, J, David, "Rewarding the Use of Solar Energy: An Appraisal of Federal and State Programs." In Marketing Solar Energy Innovations, pp. 226-47. Edited by Avraham Shama. New York: Praeger Special Studies/Scientific Department, 1981. Rolph, Elizabeth S. "Government Allocation of Property Rights." Journal of Policy Analysis and Management 3 (1:1983): 45-61. ------ Schuler, Herbert F.; Rost, Duane F.; and Ameduni, Gene. "Public Law Number 591 Taxes Solar Energy Up to 46 Percent." In Sun II, pp. 2121-5. Edited by Karl W. Boer and Barbara H. Glenn, New York: Pergamon Press, 1979. Schultz, Charles L. The Public Use of Private Interest. Washington D.C.: Brookings Institution, 1977. 144 Schweickart, Russell L., Commissioner. "Calculation Me thod for Determining Compliance of Passive Solar Water Heaters in the New Residential Building Standards: Memo." Sacramento: California Energy Commission, Building Conservation Committee, 18 May 1984. Schwolsky, Rick, and Hayes, John. Solar Business Exper- u ience. Battleboro, VT: New England Solar Energy Association and Mortheast Solar Energy Center, 1979. Shama, Avraham, ed. Marketing Solar Energy Innovations. New York: Praeger Special Studies/Scientific Department, 1981. Sherall, H.D.; Soyster A.L.; Murphy, F.H.; and Sen, S. "Intertemporal Allocation of Capital Costs in Electric Utility Capacity Expansion Planning." Management Science 30 (January 1984): 1-19. "Six Cities Develop Municipal Solar Utilities." California Energy Commission News and Comment 1 (November 1981): 1 and 12-3. Smith, Kent. "Reducing Vulnerability to Oil Shortages." California Energy Commission News and Comment 8 (August 1983): 4-5 and 15. Solar Energy Information Services (SEIS). Solar Energy Employment and Requirements: 1978-83. San Mateo : SEIS, 1981. Solar Energy Research Institute and United States Depart ment of Energy. "Map: Annual Mean Daily Solar Radiation (Langleys)." (GPO: 850-964). "Solar Heat on a Tray." Canadian Financial Post, 16 May 1981, p. 18. --------------------------- "Solar Housing Developer Asks City Officials to See the Light." Bakersfield Californian, 13 May 1984, sec. D, p. 19: "Solar Leasing Now Available in Three Cities." Times- Standard, 18 August 1981 (ho page number given). "Solar Panels to Cut Natural Gas Usage." Bakersfield Californian, 27 November 1983, sec. D, p. 8. 145 "Solar Shading and Landscaping." Bright Ideas 2 (October 1983): 1-4. "Solar Today." Bright Ideas 1 (June 1983) 1-4. "Solar Training Program Creates Local Employment." Times- Standard, 25 September 1983 (no page number given). "Solar Unit Promises Higher Efficiency Rate." Bakersfield Californian, 25 November 1983, sec. C, p. 12. "Southern California Trends." Security Pacific Bank Mon thly Summary of Business Conditions 64 (May 1984): 1 - 4 . "State Solar Tax Credits Under Attack." Los Angeles Times, 20 February 1983, sec. 8, p. 21. Stobaugh, Robert, and Yergin, Daniel. Energy Future : Re port of the Energy Project at the Harvard Business School. New York: Random House, 1979. "Sun's Benefits Scorned, Architect Says." Los Angeles Times, 19 June 1983, sec. 8, p. 21. Tibbs, Dean, and Borden, Mike. Cost Effectiveness Meth odology and Assumptions. Sacramento : California Energy Commission, Building and Appliance Stan dards Office, June 1980. Tillery, Bill W. "The Impact of Cômputers on Energy Man agement." Arizona Energy Education 6 (April 1984): 10-1 . -------------- . "Solar Cells." Arizona Energy Education 6 (June 1984): 1-12. U.S. Congress. House. Committee on Education and Labor. Hearing on Job Creation Proposals. Hearings before the Subcommittee on Employment Opportunities. 98th Cong., 1st sess., 1983. U.S. Congress. House. Committee on Energy and Commerce. Administration Budget Cuts in Conservation and Solar. Hearings before the Subcommittee on Energy Conservation and Power. 97th Cong., 1st sess., 1981. 146 U.S. Congress. House. Committee on Science and Technology. The Role of Business Incentives in the Development of Renewable Energy Technologies. Hearing before the Subcommittee on Energy Development and Ap plications . 97th Cong., 2nd sess., 1982. U.S. Congress. Senate. Committee on Energy and Natural Resources. Status of the United States Photovoltaic Industry and Its Potential Foreign Markets. Hearing before the Subcommittee on Energy Research and De velopment. 97 Cong., 1st sess., 1981. U.S. Congress. Senate. Committee on Finance. Adminis tration 's Fiscal Year 1983 Budget Proposals; Hearings Part Five. 97th Cong., 2nd sess., 1982. U.S. Congress. Senate. Committee on Governmental Affairs. Federal Energy Reorganization Act of 1982 Hearings 97th Cong., 2nd sess., 1982. U.S. Congress. Senate. Energy Security Tax Incentives Act of 1983. 98th Cong., 1st sess., 1983. U.S. Department of Commerce, Bureau of the Census. Sta tistical Abstract of the US, 1985. U.S. Department of Energy, Information Administration. Electric Power Monthly, December 1984. U.S. Department of Energy. Energy Data Contacts Finder, June 1984. U.S. Department of Energy. Energy Data of the States; 1980-3, 1984. U.S. Department of Energy. Information: News Summary, 2 April 1984. U.S. Department of Energy, Office of Oil and Gas. Natural Gas Annual : 1983, 6 March, 1985. U.S Department of Housing and Urban Development, Office of Policy Development and Research. Hot Water From the Sun, 1980. Unseld, Charles T.; Morrison, Denton E.; Sills, David L.; and Wolf, C.P., eds. Sociopolitical Effects of Energy Use and Policy. Washington D.C.: National Academy of Sciences, 1979. 147 Walker, Lewis J. "Playing on the Sands of Kuwait: Gators on the Green and Black Gold." Financial Securities Digest (January 1984): 38-9. Walton, A.L., and Warren, E.H. Solar Alternative: An Economic Perspective. Englewood Cliffs: Prentice Hall, 1982. Warkov, Seymous, and Meyer, Judith. Solar Diffusion and Public Incentives. Lexington: Lexington Books, 1982. Weigo, Richard; Dodge, Gary; and Rudelius, William. "Stimulating Energy Conservation by Homeowners : A Planning Model for Local Governments." Public Administration Review 43 (September/October : 1983): 433-43. Wells, Ken. "As a National Goal, Renewable Energy Has an Uncertain Future." Wall Street Journal 13 February 1986, pp. 1 and 19. "Will San Onofre Unit One Ever Go on Line Again." Los Angeles Times 26 February 1984, sec. 2, pp. 1 and 4. Zinner, John S. Los Angeles Solar Energy Book. Los Angeles : Los Angeles Department of Water and Power, 1980. APPENDIX 149 RESIDENTIAL SOALR ENERGY TAX CREDIT SURVEY STATE:______ May 1985 I. Level of state credit: State solar energy tax credit for residential systems (excluding federal tax credits):_________________________ II. State Utilities: Percentage of residential utilities provided by: Electricity_______percent Natural gas______percent Average residential utility cost: Electricity______per kilowatt Natural gas______per therm Average monthly residential utility bill : Electricity $________________ Natural gas $ _________ Percentage of electricity provided by: 1984 1990 2000 Coal_______________________ ____ Hydro ____ ____ Natural gas ____ ____ Nuclear 150 1984 1990 2000 Oil__________________________ ____ __ Renewable sources ____ ____ ____ Other________ ________________ ____ ____ Total number of residential solar systems installed in the state___________________. Annual energy savings (kilowatts). Projected utility costs: 1987 Electricity (kilowatt)____ Natural gas (therm) ____ 1990 2000 State utilities regulated by utility commission/ board: Yes______No______ If No, how are utilities regulated:______________________________________________ III. Incentives: Are financing incentives available for residential solar installations in your state (such as low interest loans)? ■ 151 Are income tax benefits, other than solar energy tax credits, available for residential soalr systems in your state?_________________________________________________ IV. Income statistics: Average annual income of state's residents (1984) $______________________________ Average annual income of residential solar system purchasers (1984) $_________________ V. Comments: Contact person Department Address Please return the completed survey to: Barbara Born, 1000 Crestview Avenue, Seal Beach, CA 90740 Thank you! Would you like to receive a summary of this report? Yes______No______ 152 State Energy Offices Receiving Solar Energy Tax Credit Survey of May 1985: Arizona Mark Ginsberg, Energy Director Arizona Energy Office Office of Economic Planning and Development State Capitol West Wing 5th Floor 1700 West Washington Phoenix, AZ 85007 (602)-255-3636 California Charles Imbrecht, Chairperson California Energy Commission 1516 9th Street Sacramento, CA 95814 (916)-324-3326 Colorado Hugh Humphreys, Director Office of Energy Conservation 112 East 14th Avenue Denver, CO 80203 (303)-866-2507 153 Idaho Wayne Haas, Administrator Division of Energy Resources, Department of Water Resour ces, Towers Building 450 West State Street Boise, ID 83720 (208)-334-4438 Montana Laurence Siroky, Administrator Energy Division, Department of Natural Resources and Conservation 404 St. John's Hospital Building 25 S. Ewing Street Helena, MT 59620 (406)-444-6696 Nevada Jim Hawk, Chief Energy Section Office of Community Services 1100 East Williams Street, Suite 117 Capitol Complex Carson City, NV 89710 (702)-885-4420 154 New Mexico Anita Hisenberg, Director Energy Conservation and Management Division Energy and Minerals Division 525 Camino de los Marquez Santa Fe, NM 87501 (505)-827-5860 Oregon Lynn Frank, Director Department of Energy 102 Labor and Industries Building Capitol Mall Salem, OR 97310 (503)-378-4131 Utah E. James Bradley, Director Utah Energy Office, Department of Natural Resources 3266 State Office Building Capitol Complex Salt Lake City, UT 84114 (80D-533-5424 155 Washington Richard H. Watson, Director State Energy Office 400 E. Union Street, 1st Floor Mail stop ER-11 Olympia, WA 98504 (206)-754-0700 Wyoming Nick Gill, Energy Conservation Coordinator Energy Conservation Office Capitol Hill Building 320 West 25th Street Cheyenne, WY 82002 (307)-777-7131 156 Additional Information Sources Contacted: American Gas Association 1515 Wilson Blv. Arlington, VA 22209 National Appropriate Technology Assistance Service National Center for Appropriate Technology PO BOX 2525 Butte, MT 59702 National Energy Information Center Room lF-048 Forrestal Building 1000 Independence Avenue SW Washington, DC 20585 New Mexico Solar Energy Association PO BOX 2004 Santa Fe, NM 87501 Organ Solar Institute 215 SE 9th Street Room 21 Portland, OR 97214 Renewable Energy Information PO BOX 8900 Silver Springs, MD 20907 Solar Energy Institute of America 1110 6th Street NW Washington, DC 20001 157 Solar Energy Research Institute 1617 Cole Blvd. Golden, CO 80401 158 MUNICIPAL SOLAR UTILITIES SURVEY CITY:____________________________ May 1984 Does your community offer a municipal solar utility? Yes______ No______ If yes, when did the program begin______________ How many consumers participate in the program? Cost for the program (annual)$___________________ Source of funding__________________________________ Does the program generate any revenues for the city? Yes No If yes, how much (annually)$ Services provided to the consumers Annual projected energy savings for your community Comments Contact person___________________________Department___________ Address__________________________________________________________ Thank you ! Please return completed questionnaire to: Barbara Born, 1000 Crestview Ave., Seal Beach, CA 90740 159 MUNICIPAL SOLAR UTILITIES Questionnaires mailed to the following cities Arcata/Eureka Bakersfield Monterey Park Oceanside Palo Alto San Dimas San Jose Santa Clara Santa Monica Saratoga Ukiah 160 LIFE-LINE RATES SURVEY COMPANY;________________________ May 1984 Number of residential customers served Electricity; Kilowatts produced/supplied for residential customers monthly_____________________ Gas; Thousand cubic feet supplied for residential custo mers monthly______________________ Life-line: Kilowatts allocated for customers' life-line monthly____________________ Thousand cubic feet of natural gas allocated for customers' monthly________________ Percentage of consumers exceeding life-line amount__ Percentage of consumers exceeding life-line by: 10 percent___________________ 15 percent___________________ 25 percent___________________ How do you compute life-line amounts: For electricity For gas________________________________ 161 Consumers space heating: Electric_________________ percent Gas_______________________ percent Comments Contact person_______________________ Department Address Thank you! Please return completed survey to: Barbara Born 1000 Crestview Ave., Seal Beach, CA 90740 Would you like a summary of this report? Yes____No_____ 162 UTILITY BILLS AND LIFF.-T,INE RATES Questionnaires mailed to the following companies Pacific Gas and Electric (PGE) San Diego Gas and Electric (SDGE) Southern California Edison (SCE)
Abstract (if available)
Linked assets
University of Southern California Dissertations and Theses
Conceptually similar
PDF
Solar energy policy-making in California
PDF
Pharmacists, nonprescriptive contraceptives, and the single person
PDF
Insulin, energy metabolism and the Krebs cycle
PDF
Effectiveness of a school/community-based health promotion program on changes in diet and diet-related risk factors for cardiovascular disease: Family determinants of change in adolescents and th...
PDF
Studies on the cardiovascular effects of some autonomic drugs
PDF
Some observations on mitochondrial-bound hexokinase
PDF
Investigation of some structurally related characteristics of the urinary glycoprotein of Tamm and Horsfall
PDF
Euthanasia and assisted death: A model for policymaking for controversial issues
PDF
The Blood Inventory Replenishment Planning System: Using inventory costs to compare ARIMA and Multicriteria Associative Memory Demand model forecast accuracy
PDF
An investigation of the influence of various states of hydration on the assessment of body composition: With specific reference to the variability of the total body water measurement
PDF
The impulse variability model: Tests of major assumptions and predictions
PDF
The relationship between glucose utilization and insulin action on protein synthesis in hepatocytes
PDF
Some aspects of the positive inotropic action of ouabain upon guinea pig myocardium
PDF
The learning of motor skills as influenced by knowledge of general principles of mechanics
PDF
Some relationships between auditory reaction time and number of oscillations of fixed frequency Bekesy tracings
PDF
A family study of factors influencing life-sustaining treatment decisions
PDF
Some aspects of zinc action on contractility, transmembrane potentials, and total ion content of isolated rat atria
PDF
Coastal policy development and self-evaluating agencies: Information utilization and the South Coast Regional Commission
PDF
The influence of a physical conditioning program on the transient electrocardiographic changes induced by exercise
PDF
The influence of registered nurse staffing on the quality and cost of nursing home care
Asset Metadata
Creator
Born, Barbara Elaine
(author)
Core Title
Solar energy: Some variable influencing increased utilization
Degree
Doctor of Philosophy
Publisher
University of Southern California
(original),
University of Southern California. Libraries
(digital)
Tag
applied sciences,Health and Environmental Sciences,OAI-PMH Harvest
Format
application/pdf
(imt)
Language
English
Contributor
Digitized by ProQuest
(provenance)
Permanent Link (DOI)
https://doi.org/10.25549/usctheses-c36-590678
Unique identifier
UC11252436
Identifier
DP31160.pdf (filename),usctheses-c36-590678 (legacy record id)
Legacy Identifier
DP31160.pdf
Dmrecord
590678
Document Type
Dissertation
Format
application/pdf (imt)
Rights
Born, Barbara Elaine
Type
texts
Source
University of Southern California
(contributing entity),
University of Southern California Dissertations and Theses
(collection)
Access Conditions
The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...
Repository Name
University of Southern California Digital Library
Repository Location
USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA
Tags
applied sciences