To direct the Secretary of Energy to establish a photovoltaic demonstration program, and for other purposes.

Summary: Solar Utilization Now Demonstration Act of 2006 or the SUN Act of 2006 - Directs the Secretary of Energy to establish a program of grants to states to demonstrate advanced photovoltaic technology.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Solar Utilization Now Demonstration 
Act of 2006'' or the ``SUN Act of 2006''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Renewable energy is a growth industry around the world. 
        However, the United States has not been investing as heavily as 
        other countries, and is losing market share.
            (2) Since 1996, the United States has lost significant 
        market share in the solar industry, dropping from 44 percent of 
        the world market to 13 percent in 2003.
            (3) In 2003, Japan spent more than $200,000,000 on solar 
        research, development, demonstration, and commercial 
        application and other incentives, and Germany provided more 
        than $750,000,000 in low cost financing for solar photovoltaic 
        projects. This compares to United States Government spending of 
        $139,000,000 in 2003 for research, development, demonstration, 
        and commercial application and other incentives.
            (4) Germany and Japan each had domestic photovoltaic 
        industries that employed more than 10,000 people in 2003, while 
        in the same year the United States photovoltaics industry 
        employed only 2,000 people.
            (5) The United States is becoming increasingly dependent on 
        imported energy.
            (6) The high cost of fossil fuels is hurting the United 
        States economy.
            (7) Small reductions in peak demand can result in very 
        large reductions in price, according to energy market experts.
            (8) Although the United States has only 2 percent of the 
        world's oil reserves and 3 percent of the world's natural gas 
        reserves, our Nation's renewable energy resources are vast and 
        largely untapped.
            (9) Renewable energy can reduce the demand for imported 
        energy, reducing costs and decreasing the variability of energy 
        prices.
            (10) By using domestic renewable energy resources, the 
        United States can reduce the amount of money sent into unstable 
        regions of the world and keep it in the United States.
            (11) By supporting renewable energy research and 
        development, and funding demonstration and commercial 
        application programs for renewable energy, the United States 
        can create an export industry and improve the balance of trade.
            (12) Renewable energy can significantly reduce the 
        environmental impacts of energy production.

SEC. 3. PHOTOVOLTAIC DEMONSTRATION PROGRAM.

    (a) In General.--The Secretary of Energy (in this Act referred to 
as the ``Secretary'') shall establish a program of grants to States to 
demonstrate advanced photovoltaic technology.
    (b) Requirements.--
            (1) Ability to meet requirements.--To receive funding under 
        the program under this section, a State must submit a proposal 
        that demonstrates, to the satisfaction of the Secretary, that 
        the State will meet the requirements of subsection (f).
            (2) Compliance with requirements.--If a State has received 
        funding under this section for the preceding year, the State 
        must demonstrate, to the satisfaction of the Secretary, that it 
        complied with the requirements of subsection (f) in carrying 
        out the program during that preceding year, and that it will do 
        so in the future, before it can receive further funding under 
        this section.
            (3) Funding allocation.--Except as provided in subsection 
        (c), each State submitting a qualifying proposal shall receive 
        funding under the program based on the proportion of United 
        States population in the State according to the 2000 census. In 
        each fiscal year, the portion of funds attributable under this 
        paragraph to States that have not submitted qualifying 
        proposals in the time and manner specified by the Secretary 
        shall be distributed pro rata to the States that have submitted 
        qualifying proposals in the specified time and manner.
    (c) Competition.--If more than $80,000,000 is available for the 
program under this section for any fiscal year, the Secretary shall 
allocate 75 percent of the total amount of funds available according to 
subsection (b)(3), and shall award the remaining 25 percent on a 
competitive basis to the States with the proposals the Secretary 
considers most likely to encourage the widespread adoption of 
photovoltaic technologies.
    (d) Proposals.--Not later than 6 months after the date of enactment 
of this Act, and in each subsequent fiscal year for the life of the 
program, the Secretary shall solicit proposals from the States to 
participate in the program under this section.
    (e) Competitive Criteria.--In awarding funds in a competitive 
allocation under subsection (c), the Secretary shall consider--
            (1) the likelihood of a proposal to encourage the 
        demonstration of, or lower the costs of, advanced photovoltaic 
        technologies; and
            (2) the extent to which a proposal is likely to--
                    (A) maximize the amount of photovoltaics 
                demonstrated;
                    (B) maximize the proportion of non-Federal cost 
                share; and
                    (C) limit State administrative costs.
    (f) State Program.--A program operated by a State with funding 
under this section shall provide competitive awards for the 
demonstration of advanced photovoltaic technologies. Each State program 
shall--
            (1) require a contribution of at least 60 percent per award 
        from non-Federal sources, which may include any combination of 
        State, local, and private funds, except that at least 10 
        percent of the funding must be supplied by the State;
            (2) limit awards for any single project to a maximum of 
        $1,000,000;
            (3) prohibit any nongovernmental recipient from receiving 
        more than $1,000,000 per year;
            (4) endeavor to fund recipients in the commercial, 
        industrial, institutional, governmental, and residential 
        sectors;
            (5) limit State administrative costs to no more than 10 
        percent of the grant;
            (6) report annually to the Secretary on--
                    (A) the amount of funds disbursed;
                    (B) the amount of photovoltaics purchased; and
                    (C) the results of the monitoring under paragraph 
                (7);
            (7) provide for measurement and verification of the output 
        of a representative sample of the photovoltaics systems 
        demonstrated throughout the average working life of the 
        systems, or at least 20 years; and
            (8) require that applicant buildings must have received an 
        independent energy efficiency audit during the 6-month period 
        preceding the filing of the application.
    (g) Unexpended Funds.--If a State fails to expend any funds 
received under subsection (b) or (c) within 3 years of receipt, such 
remaining funds shall be returned to the Treasury.
    (h) Reports.--The Secretary shall report to Congress 5 years after 
funds are first distributed to the States under this section--
            (1) the amount of photovoltaics demonstrated;
            (2) the number of projects undertaken;
            (3) the administrative costs of the program;
            (4) the amount of funds that each State has not received 
        because of a failure to submit a qualifying proposal, as 
        described in subsection (b)(3);
            (5) the results of the monitoring under subsection (f)(7); 
        and
            (6) the total amount of funds distributed, including a 
        breakdown by State.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary for the purposes of carrying out this 
section--
            (1) $50,000,000 for fiscal year 2007;
            (2) $100,000,000 for fiscal year 2008;
            (3) $150,000,000 for fiscal year 2009;
            (4) $200,000,000 for fiscal year 2010; and
            (5) $300,000,000 for fiscal year 2011.