This article was published by The Energy Mix on Feb. 1, 2024.
By Gaye Taylor
As California’s utility regulator moves to complete its community solar program guidelines, hopes are high that a widely-supported tariff proposal will finally allow community solar and battery storage to help power the state.
“With the exception of community solar, California has often led the nation in state-level legislation and deployment of clean energy infrastructure,” stated Boston-based solar developer Perch Energy in December. This gap is set to be filled in July—the deadline for the California Public Utility Commission (CPUC) to develop and deliver its community solar program, as mandated by the state’s landmark 2023 Community Renewable Energy Act (AB2316).
California has tried to jump start its community solar program three times before, but the previous attempts ran into structural issues. “None of these plans could produce enough community solar megawatts to remotely meet its demand, with only about 160 megawatts online after several years,” Perch wrote. But hopes are high that “the fourth time may be the charm.”
The California PUC is mandated by the new law “to develop a community solar program that best serves all ratepayers and enhances grid reliability, with special consideration for low-income households,” explained Perch. Several investor-owned utilities have made program proposals to CPUC, but only one fits the mandate: the Net Value Billing Tariff (NVBT) presented by the Coalition for Community Solar Access, a primary sponsor of AB2316.
Perch said the NBVT “includes a requirement that all facilities be paired with a minimum of four hours of storage capacity,” a provision that boosts reliability. Then, “releasing stored energy at peak evening hours during the summer months will result in the greatest payout for that energy.” The NVBT proposal also includes “a simplified billing option and low barriers to enrolling low-income subscribers.”
Last year, Rick Umoff, senior director and counsel for Solar Energy Industries Association (SEIA) California, described NVBT as “wholesale distributed generation,” wrote PV magazine, noting that “this model of building power generation touches on the four problems of rates, reliability, climate, and equity.”
“It addresses ratepayer problems by adding low-cost energy to the grid,” the magazine added, citing United States Department of Energy (DOE) estimates that community solar subscribers save an average of 20% on their bills.
Those savings are critical, as “California has the third most expensive electricity rates in the country, underscoring both a need for lower electric bills and an opportunity for community solar providers to supply it,” Perch wrote. As for reliability, “under ever-increasing extreme weather threats, a decentralized structure of power generation lessens or negates the downtime caused by a downed transmission wire or knocked-out central power source.”
Once approved, the provision for four hours of storage provision, a national first, will be good news for New Jersey-based Scale Microgrids, which just “inked a 500-megawatt community solar deal, partnering with solar developer Gutami on a multistate project that includes energy storage in California,” reports Microgrid Knowledge. New York and two other states are also signatories.
“We’re excited about the California market right now,” says Nicole Green, director of marketing and branding at Scale Microgrids. “The co-location of battery storage aligns nicely with our microgrid business,” she added.
The new deal builds on last year’s agreement with Belgium-based Gutami “to finance, build, own and operate 100 megawatts of community solar projects in New York state.”
“The announcements are getting bigger and bigger because community solar is getting so big,” said Julian Torres, chief investment officer at Scale Microgrids.
Microgrid Knowledge says existing community solar markets are predicted “to increase by an average of 8% annually, with nearly 14 gigawatts of cumulative capacity expected by 2028.”
Microgrids also have an important role to play in solving persistent problems with grid interconnections. “For example, Illinois expanded its program capacity to 450 MW but has a waitlist of 1.5 gigawatts from previous years,” the industry publication states.
Community solar also delivers on the climate front. With that in mind, DOE’s National Community Solar Partnership has set out to power the equivalent of five million households with community solar by 2025, aligning with the department’s overall target of 100% clean electricity by 2035. That would mean a jump from a current installed capacity of three to 20 gigawatts by 2025.
The NVBT is also set up to fulfill the AB2316 demand that at least 51% of all project subscribers have low incomes. “A prohibition of credit score screening, no termination fees, and no contract duration for subscribers” all help lower the barriers to subscriptions by energy-poor households, noted Perch. The community solar program proposed by the NVBT would also be open to renters, benefitting the 45% of all Californians who rent, 70% of whom are considered low-income.
Because the NVBT is limited to investor-owned utilities, Los Angeles will not be able to subscribe. That’s “disappointing,” Perch wrote, given that “the LA metropolitan area is home to some 13 million people and, according to California’s disadvantaged community screening tool, has the highest concentration of low-income residents in the state.”
One “notable provision” in AB2316 is the requirement for a prevailing wage for workers. It ensures that projects are eligible for an additional tax bonus, and also drew the support of environmental justice and labour groups, who also support NBVT, Perch said.