CATERSOLAR INC

The California Public Utilities Commission (CPUC) staff today issued its first annual program assessment report to the State Legislature for the California Solar Initiative, the country's largest solar incentive program. The report details the progress of the program and its accomplishments to date.

In January 2007, California launched an unprecedented $3.3 billion program with the goal of installing 3,000 megawatts (MW) of new grid-connected solar in 10 years and transforming the market for solar energy by reducing its cost. The CPUC portion of the solar effort is known as the California Solar Initiative, and has a $2.2 billion budget and a goal of installing 1,940 MW by the end of 2016. The report, which is required by the State Legislature, highlights the following key findings:

· California has over 500 MW of solar photovoltaic (PV) connected to the electric grid at customer sites; this is equivalent to one large power plant. With recent rapid growth, California now has over 515 MW of cumulative installed solar PV capacity at nearly 50,000 sites; 226 MW of this was installed in the past 2½ years under the California Solar Initiative.

· The annual rate for new installed solar capacity in California nearly doubled in 2008 over 2007 (from 81 MW per year to 156 MW per year), a marked increase from the 30-40 percent annual growth rate of prior years.

· Despite the challenging economic situation, installation data suggests that the California Solar Initiative could install at least the same amount of megawatts in 2009 as 2008, with 78 MW already installed through May 2009.

· The program continues to see strong demand, with May 2009 the highest month on record for new solar applications. The California Solar Initiative has over 22,000 solar applications, including both pending and installed systems, which will account for an estimated 373 MW of new solar capacity.

· After 2½ years, the California Solar Initiative has installed 13 percent of the total 10-year program goal, and it has another 8 percent in applications pending installation.

"I think we can all be pleased with the success the California Solar Initiative has demonstrated in driving the deployment of significant levels of distributed solar capacity," said CPUC President Michael R. Peevey, noting that there are both environmental and financial benefits of going solar. "This program is delivering on California's commitment to the solar industry, which has an absolutely essential role to play in our efforts to address climate change."

Since 2007, the CPUC has launched five program components of the California Solar Initiative, including the general market solar incentive program; a Research, Development, Demonstration, and Deployment program; a Solar Water Heating pilot program; and two low income programs - the Single-family Affordable Solar Homes Program and the Multifamily Affordable Solar Housing Program. The report presents status reports and accomplishments to date for all five.

The report also provides several suggestions on ways the Legislature might further support the program and its underlying goals, including raising the net energy metering cap to enable additional customers to qualify for this feature, and expanding the low income housing eligibility requirements to increase the number of low income households that have access to solar technologies.

It's tough keeping up with all the developments on the political front! Here are highlights that may impact Solar Energy Systems:
1. 2009 tax credit cap lifted for solar
The new investment tax credit is putting thousands of dollars back into Loa Angeles residents' pockets. If solar seemed too expensive in the past, now's the time to look again. In particular, if you've already received an Energy Savings Analysis, it will be easy for us to "re- run the numbers" to see what that full 30% credit will mean in savings for you. Contact Us at (818) 626 5626.

2. 2009 tax credit cap lifted for solar THERMAL, too!
The American Recovery and Reinvestment Act (ARRA), signed by President Obama just this last week, lifts the cap on solar thermal installations, too! You can now receive the full 30% credit for qualified solar water heating equipment, and apply it against the alternative minimum tax, too. This should make solar thermal feasible for many more people in

Los Angeles

. For a Site Check to look at your solar thermal potential, or an updated analysis, contact us at (818) 626 5626.

3. New credits for energy efficiency measures
If your Energy Savings Analysis suggests new windows or water heater or insulation , you may be eligible for a new 30% tax credit, up to $1,500. The whole list of covered products can be found at the Energy Star Website. Most appliances (refrigerators, clothes washers) are not covered by the credit, but rebates may still be offered by the utility companies. Check with Los Angeles Department of Water and Power (DWP) or more details.

4. Bonus depreciation still available for commercial installations
The Recovery and Reinvestment Act extended bonus depreciation for solar installations completed in 2009 and 2010. Businesses can write off 50% of the costs in the first year, and use accelerated depreciation on the rest. Dollar limits and phase-out parameters call for professional tax advice.

5. Tax Credit becomes "Grant"
The 30% ITC for commercial installations has now become a "grant," available immediately instead of when taxes are filed. Also, the grant is available to every business whereas a credit works only if the business has a tax liability. Again, check with a tax professional to see if your business is eligible.

President-elect Barack Obama's drive to repower the nation through alternative energy could generate solar industry growth in mid-Michigan, economic and political leaders hope.

Thomas Township-headquartered Hemlock Semiconductor's Corp. announced Monday it will add up to a $1 billion expansion to manufacture polycrystalline silicon, or polysilicon, at its Geddes Road operations in Thomas Township and will open a $1.2 billion plant in Clarksville, Tenn. Polysilicon is a super pure, rock-like material solar panel and computer chip makers use.

Dow Corning also plans for a new plant next to HSC in Thomas Township to produce monosilane gas, which creates a thin film on glass and helps convert sunlight into energy.

Obama's call to expand alternative energy should mean more jobs, leaders hope.

"If he does what is in his energy platform, I'm going to be extremely pleased," said Stephanie A. Burns, president and chief executive officer of Midland-headquartered Dow Corning Corp., majority owner of HSC.

In his campaign platform, Obama declared he would invest $150 billion over a decade in clean energy and ensure 10 percent of electricity is generated from renewable sources within four years and 25 percent by 2025. He's also called for greenhouse gas emissions reductions of 80 percent by mid-century.

"There is a commitment to renewable energy like we have not seen before," Democratic Gov. Jennifer M. Granholm said at an HSC expansion announcement at Saginaw Valley State University.

U.S. Rep. Dave Camp said federal and state governments should pass tax credits to encourage residential and commercial use of solar power.

"We really are on the cutting edge of both the manufacture as well as the development of solar in Michigan," the Midland Republican said. "Any emphasis on these alternative fuels will benefit the solar industry. There's a huge federal role to play here in renewable energy and solar is certainly a part of that."
Michigan gave HSC up to a $350 million energy tax credit over 12 years for the latest expansion.

There's a limit, though, on how much the state can afford, said State Sen Roger N. Kahn, a Saginaw Township Republican.

"I don't think any Legislature is going to give tax credits to infinity," Kahn said. "There has to be some evidence of result at the end of that and the results I'm looking for are jobs for our people."

State Rep. Kenneth B. Horn said the president-elect's initiative is a "mixed bag."

The emphasis will pump up solar energy, the Frankenmuth lawmaker said, but he sees a need to power up new nuclear plants and clean coal technology plants in Michigan to meet energy demand, too.

Fellow GOP Rep. John R. Moolenaar of Midland agreed.

The Republican duo also said fewer regulatory burdens and lower corporate taxes are key as well.

Tax credits are available for qualified solar water heating and photovoltaic systems. The credits are available for Solar Electric systems from January 1, 2006 through December 31, 2016. The tax credit is for 30% of the cost of the system, up to $2,000. After December 31, 2008, this $2,000 cap will be removed for photovoltaic systems (but not solar water heaters). This credit is completely separate from the $500 home improvement credit.

RENEWABLE ENERGY GENERATION. INITIATIVE STATUTE.

• Requires utilities, including government-owned utilities, to generate 20% of their power from renewable energy by 2010, a standard currently applicable only to private electrical corporations.
• Raises requirement for utilities to 40% by 2020 and 50% by 2025.
• Imposes penalties, subject to waiver, for noncompliance.
• Transfers some jurisdiction of regulatory matters from Public Utilities Commission to Energy Commission.
• Fast-tracks approval for new renewable energy plants.
• Requires utilities to sign longer contracts (20 year minimum) to procure renewable energy.
• Creates account to purchase rights-of-way and facilities for the transmission of renewable energy.

The law, sponsored by Assemblyman Lloyd Levine (D- Van Nuys), allows cities and counties to make low-interest loans to homeowners and businesses to install solar panels, high-efficiency air conditioners and other improvements to save energy. Participants can pay back the loans as part of their property taxes. If they move, the improvements and loan balance are transferred to the next owner.

The financing scheme, if adopted by cities, is likely to give a statewide boost to the installation of solar panels to generate electricity. Solar power systems can cost between $15,000 and $30,000--more than many homeowners can afford, although state rebates cover much of the cost. But with the loans, and the guarantee that the investment will not be lost when people sell their homes, the risk is dramatically reduced.

The original idea was hatched by Cisco DeVries, chief of staff for Berkeley Mayor Tom Bates. More than a year ago, when it was presented at a meeting of mayors in Seattle, the proposal drew national and international attention, with inquiries from scores of public officials. In November 2007, the Berkeley City Council approved that property owners could repay through a 20-year assessment.