The California Public Utilities Commission (CPUC) has recently proposed a new way of subsidizing small scale solar energy systems (1-20 megawatts). And, according to Green Stock Central, the proposal may soon be passed; a final vote is expected within the next month.

The plan is called the Renewable Auction Mechanism (RAM). It would would work much in the same way a Feed-in Tariff (FIT) system works, with the difference being that rates of the tariff would be set by an open bidding process. Proponents say this approach would help in two ways. It would drive down high consumer rates and bring in reasonable rates of returns for solar developers.

The project, if passed, will begin in 2011 and run through 2012. The projects of 20 megawatts (MW) or less will total 1,000 MW of solar capacity that will be fed into the grids of California’s three major investor-owned utilities (IOUs): Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDGE). Under the plan, an auction would take place every 180 days. At each auction, 250MW will be given to each of the three top IOUs.

These are the companies that may gain the most from the RAM program.