In California’s effort to combat climate change, few other sectors present as many opportunities as renewable energy. Transitioning from fossil-fuel based energy to renewable sources will result in significant greenhouse gas reductions and more jobs and economic growth. But climate change and the state’s aggressive renewable energy requirements (mandating that renewable energy sources constitute 20 percent of electrical power for the state by 2010 and 33 percent by 2020) require immediate action. As a result, there is considerable interest in installing renewable energy technology on the rooftops of large commercial and government buildings, and in other spaces such as wastewater treatment plants, the aqueduct, and highway rights-of-way.

Unfortunately, decentralized energy generation also faces financing and regulatory barriers. State incentive programs need improvement, such as net metering, which allows renewable energy generators to offset their electricity bills with credits from the energy they provide to the grid; and the feed-in tariff, which provides cash payments for renewable energy.

This paper identifies the immediate and longer-term actions that government leaders, private industry, and public agencies must take to address the barriers. The key finding is that policy makers must expand and improve the net metering and feed-in tariff incentive programs. 

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