SOURCE: Akeena Solar

August 24, 2005 13:18 ET

California to Save Over $6 Billion From Million Solar Roofs Initiative According to New Akeena Solar White Paper

LOS GATOS, CA -- (MARKET WIRE) -- August 24, 2005 -- A White Paper entitled "The Economics of Solar Energy for California" was released today showing that the Million Solar Roofs Initiative (California Senate Bill #1) will save California over six billion dollars net of incentives. Supported by Governor Schwarzenegger, the Million Solar Roofs Initiative is an ambitious plan to install 3,000 Megawatts of solar electric power on roofs throughout California by 2016. The complete text of "The Economics of Solar Power for California - A White Paper" is available for download at http://www.akeena.net/about/whitepaper.htm.

"The primary benefit of the Million Solar Roofs Initiative is that it reduces California's power needs during hot summer weekday afternoons," said Barry Cinnamon, President of Akeena Solar. "Without this 3,000 Megawatts of solar capacity, utilities must construct this generation, distribution and transmission infrastructure -- as well as operate and fuel these plants. Ratepayers will ultimately pay for these costs. Solar power is a far better way to generate this capacity since the state also benefits with cleaner air and a better economy," said Cinnamon.

Benefits to California from Multiple Sources

The key finding of this White Paper is that the Million Solar Roofs Initiative will save in excess of $6 billion net of incentives (in constant 2005 dollars), primarily by avoiding traditional power generation and distribution investments. Nevertheless, economic and environmental savings are also significant. These savings are likely to be substantially higher as fuel prices are likely to escalate faster than the 3% assumed in these analyses.

Based on the analyses in this White Paper, the costs and savings of this initiative are as follows (in million 2005 dollars):

Energy Infrastructure Savings    $   7,099
Economic Savings (Jobs & Tax)    $   1,507
Environmental Savings            $     525
Total                            $   9,133

Incentive Costs                  $  (3,025)
Net Benefits to State            $   6,107
Legislative Challenges for SB-1

There are currently two major challenges facing the adoption of SB-1. The first challenge is that certain unions want all of the solar work in the state to be done using "prevailing wages" -- essentially union wages. "When we ran our model using these prevailing wage rates the costs to the state for the Million Solar Roofs Initiative were increased by $750 million," said Cinnamon.

The second challenge is simply that SB-1 replaces conventionally utility power generation and distribution. It is understandable that utilities would like to continue generating and delivering this incremental power to customers. However, it is only by installing these systems on business and residential rooftops that costs for additional transmission and distribution systems can be avoided.

A key concept within this White Paper is that customer economic behavior drives the solar market. Assuming a level of incentives that does not take into account actual customer purchasing behavior -- based on net customer economics -- will result in fewer systems being installed within the ten-year timeframe of the Million Solar Roofs Initiative.

About Akeena Solar

Akeena Solar is the fastest growing national solar electric specialist. The company designs and installs residential and commercial solar electric systems in California, New Jersey, New York, Connecticut and Pennsylvania. Akeena is a member of the Silicon Valley Leadership Group, Solar Energy Industries Association, Northeast Solar Energy Association, Northern California Solar Energy Association and California Solar Energy Industries Association.

Founded in 2001, Akeena Solar's philosophy is simple: we believe that producing clean electricity directly from the sun is the right thing to do for our environment and economy.

The complete text of "The Economics of Solar Power for California - A White Paper" is available for download at http://www.akeena.net/about/whitepaper.htm

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