California law will require utilities to pay roughly one and half times the 'market price' to small-scale solar generators.

California Gov. Arnold Schwarzenegger on Sunday signed a statewide solar feed-in tariff, a provision that requires utilities to buy solar energy back from customers at above-market prices.

The California Solar Surplus Act, AB-920, will require California utilities to buy power from solar-panel generators of 1.5-3.0 megawatts at roughly 15 to 17 cents per kilowatt-hour, with the price being determined at auction.

Some critics of the bill say the guaranteed tariff payment may not be high enough to spur significant investment in the solar industry and that it doesn't do anything to incentivize residential rooftop solar. But other industry leaders fully support the move.

"I think the feed-in tariff in California is a step in the right direction (for) customizing policy to the market segments," said SunPower's chief executive Tom Werner at a recent conference in San Francisco.

The codifying of the solar feed-in tariff is part of a larger renewable energy strategy being touted by Schwarzenegger to meet the state's ambitious 33 percent by 2020 renewables target.

Schwarzenegger vetoed two related bills on Sunday evening. One of which—passed in September by the Democratic-controlled California assembly—would have required the state's utilities to use renewable energy, like solar and wind power from sources within state borders.

But the governor objected to any provisions that would limit the amount of renewable power utilities could buy from other states, saying they were "protectionist" and would be costly.

Schwarzenegger says he signed the bill because the state "will need to use all of the tools available" to stay on track to meet their renewable energy target would be to allow contracting from out of state generators and to encourage more small-scale solar deployments via this new feed-in mechanism.

via MarketWatch; The Wall Street Journal
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