Stay up-to-date with free briefings on topics that matter to all Californians. Subscribe to CalMatters today for nonprofit news in your inbox.

California has given America a glimpse at what running one of the world’s largest economies on renewable energy might look like.

The state recently hit a milestone: 100 days this year with 100% carbon-free, renewable electricity for at least a part of each day, as tracked by Stanford University engineering Professor Mark Z. Jacobson.

The state notched the milestone while — so far — avoiding blackouts and emergency power reductions this year, even with the hottest July on record.

That progress is largely due to the substantial public and private investments in renewable energy — particularly batteries storing solar power to use when the sun isn’t shining, according to energy experts.

“California has made unprecedented investments in our power grid in recent years — and we’re seeing them pay off in real time,” Gov. Gavin Newsom said in a statement to CalMatters. “Not only is our grid more reliable and resilient, it’s also increasingly running on 100% clean electricity.”

The state faces a huge challenge in coming years: A series of mandates will require carbon-free energy while also putting more electric cars on roads and electric appliances in homes. California, under state law, must run on 60% renewable energy by 2030, ramping up to 100% by 2045.

Signs of progress are emerging. From January to mid-July of this year, zero-carbon, renewable energy exceeded demand in California for 945 hours during 146 days — equivalent to a month-and-a-half of 100% fossil-fuel-free electricity, according to the California Energy Commission, the state agency tasked with carrying out the clean energy mandates.

But California still has a long way to go to stop burning fossil fuels for electricity. Natural gas, which emits greenhouse gases and air pollutants, remains its single largest source of electricity.

Just over half of power generated for Californians in 2022 came from solar, wind, other renewables and nuclear power, while 36% came from natural gas plants.

Reliability of the power grid is a top concern as the state switches to solar and wind energy. Unpredictable events like wildfires and winter storms also cause outages, while hot summer months, with air conditioners whirring, strain the supply.

In August of 2020 California experienced its first non-wildfire blackouts in nearly 20 years, and in late August and September of 2022, a severe heatwave forced regulators to ask consumers to voluntarily reduce power for 10 days.

Since September 2022 — when California teetered on the edge of those blackouts and the governor pleaded for conservation — nearly 11,600 new megawatts of clean energy have been added to the state’s grid, said Elliot Mainzer, chief executive of the California Independent System Operator, which manages the grid. (That’s enough to power around 9 to 12 million homes although it’s not available all at one time.)

California also now has more than 10,000 megawatts of battery capacity, making it the largest supply outside of China. Battery power from large commercial facilities proved its worth during last month’s heat wave, Mainzer said.

Batteries “were a major difference-maker,” Mainzer said. “The batteries charged during the day, when solar energy is abundant, and then they put that energy back onto the grid in the afternoon and evening, when solar production is rolling off the system.”

California relies heavily on four-hour duration lithium-ion batteries, which come in large, centralized facilities and hybrid facilities paired with solar energy projects. More homes also are installing batteries with their rooftop solar installations, but they supply a small amount of power.

Planning and practicing various emergency scenarios has also helped immensely, Mainzer said.

“Our grid operators are now increasingly experienced at managing these extreme heat events,” Mainzer said. “Our forecasters also did an excellent job of reviewing the next day’s conditions so that the market could respond effectively.”

‘The table is set’ for clean energy

California may need to more than double its energy generation capacity by 2045 to meet the 100% clean energy target while adding electric cars, appliances and other technologies, said Siva Gunda, who sits on the California Energy Commission. 

To do that, California aims to build about 6,000 to 8,000 megawatts of new energy resources each year. The state hit a record last year, adding more than 6,000 megawatts, Gunda said. Each megawatt is enough to serve between 750 and 1,000 homes. 

“The table is set,” Gunda said. “The pieces are there for success, and it’s about executing it, together with a common vision and collaboration.”

The commission is closely monitoring a new concern: Artificial intelligence technology, which uses large data centers that consume power. “We’re carefully watching where the loads are going to grow,” Gunda said.

Stanford’s Jacobson said running on 100% renewable energy is becoming more common.

Over the July 28 weekend, California marked the 100th nonconsecutive day within a 144-day stretch in which 100% of electricity came from renewable sources for periods ranging from five minutes to more than 10 hours, he said.

On April 8, a solar eclipse reduced solar power generation and increased demand on the grid, which was met by batteries. On May 5, wind, hydroelectric and solar energy reached more than 160% of demand for a significant portion of the day.

California continues to waffle about ending its reliance on natural gas and nuclear power.

Fearing emergency rolling blackouts like the one in 2020, Newsom and the Legislature in 2022 allowed some natural gas plants that were supposed to go offline to keep operating. 

And the Diablo Canyon nuclear power plant will continue operating while Pacific Gas & Electric pursues federal permission to stay open past 2025. Nuclear power is considered renewable and carbon-free but it creates radioactive waste.

State officials and private investors aim to create an entirely new industry — giant floating ocean wind platforms — to produce 13% of California’s power, enough to power 25 million homes, by 2045. The massive projects will cost billions of dollars. 

Some Democratic legislators are hoping to make it easier to build wind and solar projects, since sometimes local obstacles and permitting take years. They are negotiating an end-of-session package of proposed laws that could streamline construction, CalMatters reported earlier this month. California’s legislative session ends Aug. 31.

Jacobson said the cost of large-scale solar power projects has “dropped substantially” in recent decades largely because of “economies of scale — just the huge growth of solar on a worldwide scale.”

“There’s no miracle technology that was developed,” he said. “It’s just subtle improvements in existing technologies and deployment, deployment, deployment.”

California hits milestones toward 100% clean energy — but has a long way to go is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

This article is a paid promotion and the Energy News Network is not responsible for its contents.

The need to prioritize the installation of heat pumps in California’s low-income households is clear.

California’s Fourth Climate Change Assessment devoted a separate report on the challenges for low-income residents in the San Joaquin Valley and the resulting health implications. Affordable air conditioning is likely at the top of the list of health needs for the vulnerable in the San Joaquin Valley, where weather regularly exceeds over 100 Fahrenheit in the summer and fall.

“Some residents living in these homes are disabled, need regular medical attention, and are unable to work,” a program implementer noted in a pilot report update on San Joaquin Valley, reporting on the conditions that program recipients had endured prior to the heat pump installations. “Ethically, these customers need HVAC systems to live comfortably and cannot be overlooked.”

Yet ensuring that these same communities benefit from rebate programs to encourage heat pump installations is more complex.

It turns out that for low-income residents, participation in a rebate program can require thousands of dollars of additional out-of-pocket costs, relative to richer households, because the homes tend to be older, the electricity is more likely to need upgrades, and there are often additional modifications or infrastructure improvements required — such as replacing water damaged flooring or walls from leaks — to provide the power. These costs, for additional wiring and other critical work, are typically either only partially or not covered by most rebate programs.

TECH Clean California, a statewide initiative to accelerate the adoption of clean space and water heating technology and put California on a path to carbon-free homes by 2045, has identified these additional costs as a key barrier to introducing heat pumps into lower-income homes.

“If you are a lower-income or harder-to-reach person, you’re probably not going to participate in a program that requires you to do a $20,000 HVAC replacement that you can’t afford,” said Sandy Laube, an energy efficiency policy researcher at Energy Solutions, the program administrator of TECH Clean California.

To address this roadblock, TECH Clean California provided funding for an already existing program, the San Joaquin Valley Disadvantaged Community Pilot Project. The pilot is part of California’s broader effort to assess the economic feasibility of helping these residents reduce their energy costs by replacing certain appliances with electric ones. The findings will be used to determine how best to meet the State’s broader goals for addressing climate change and reducing the disproportionate climate burden these communities bear.

TECH Clean California, which has committed 40 percent of its incentive funding to income-qualified customers, has learned that working with other partners in equity work helps leverage that commitment even further.

For this effort, TECH Clean California experimented with encouraging greater participation from interested households, many of which were budget-constrained.

The San Joaquin Valley Disadvantaged Community Pilot program had funded the installation of heat pump systems into roughly 279 qualifying low-income homes in the San Joaquin Valley, but due to restrictions in how funding can be used, there is a $5,000 minor home repair remediation cost maximum. This put some of the needed repairs out of reach for would-be program participants.

TECH Clean California was able to provide enough additional incentive funding to expand the San Joaquin Valley Pilot, so that it could reach more residents. In fact, TECH Clean California successfully helped fund remediation work in 89 additional homes. “We saw that many of these lower-income households were not going to be able to participate and get the broader benefits of renewable power in their home,” Laube said. “We wanted to be equitable in how we are spending the incentive money, which has meant finding ways to include groups that would normally not participate.”

This additional TECH Clean California funding covered home repair expenses, trenching, and other infrastructure costs, bridging the gap between what the utility was able to fund through its program and what the end customers needed to install the new electrification equipment. As a result, eligible customers had no additional out-of-pocket expenses.

“The additional TECH Clean California funding ended up being very important,” said Jose Landeros, the Director of Energy Programs for Proteus. “If it had not been for those additional funds for the remediation, many of these customers would not have participated.”

The needed work which TECH Clean California funded were a subset of homes that PG&E’s Building Electrification program had identified as needing heat pump water heaters. For these homes in San Joaquin Valley, the preparatory work for installation in a 2022 pilot project revealed a broad range of preliminary repair issues that first needed to be addressed.

Many of these homes needed to relocate the new heat pump systems water heater to the exterior of the home, requiring the installation of a metal enclosure for protection from weather or other damage.

Several residences in the San Joaquin Valley also required panel upgrades to support the added load of the new electrical equipment.

“It costs more money to electrify low-income households,” said Rachel Etherington, an energy transition strategist with the Ortiz Group, who worked with the San Joaquin Valley community in facilitating heat pump installations. “You only know how bad it is when you’re on the ground. “There’s no pavement for example. You can’t put machinery on dirt. You must revert to manual trenching, so that’s a significant labor cost. And every single home needed an electrical panel upgrade. It gives you an understanding of why it’s such an interesting project, like the pioneer of low-income implementation.” However, these kinds of upgrades will have further benefits for customers down the road, providing the basis for further electrification.

“A 200-amp panel gives low-income customers a better availability of power for the future, meaning that if they do have to get an electric car, they now have the capacity to be able to put an EV charger on their house,” said Lyal Ray, a quality production manager for Synergy Energy who was actively involved in many of the installations for San Joaquin Valley. “They have the capacity to put battery storage that is provided for low-income housing.”

It’s these kinds of hidden costs that are proving to be a barrier for lower-income families to access the benefits that electrification technology such as heat pump water heater HVACs can provide. 

“Without TECH Clean California funds, 89 of these households would not have been able to participate, elderly residents who require electricity all day, residents on dialysis machines,” Etherington said. “They required a significant amount of infrastructure upgrades. But at the end of the day, these are people’s homes, and those TECH Clean California funds created a huge quality of life improvement for those households.”

Written by Emily Pickrell. For more information about this and other projects, please visit TECH Clean California’s Annual Report at techcleanca.com. The report highlights learnings and accomplishments through the initiative’s statewide focus and collaboration. The guiding principle of TECH Clean California puts the state on a pathway to six million heat pumps by 2030 and carbon-free homes by 2045.

Commentary: Encouraging heat pump technology for San Joaquin Valley residents is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

This article is a paid promotion and the Energy News Network is not responsible for its contents.

Home electrification has many benefits: it is cleaner, more efficient, and reduces environmental degradation.

It also means that existing infrastructure for managing power coming into homes may need to be rethought. When customers want to switch from gas to electric appliances or add an electric vehicle charger to their home for example, many customers are faced with having to upgrade their electric service. This is an expensive project, and many customers may decide not to electrify. Fortunately, some emerging technologies in the California market are designed to intentionally balance a home’s power usage, and allow homeowners to avoid expensive panel upgrades, making electrification a workable option in situations when electrical upgrade costs or local infrastructure shortfalls would otherwise put a stop to the project.

These devices are known as “intelligent power management technologies” or IPMTs. They give customers options to juggle the use of different appliances and their power requirements to avoid capacity constraints and reduce installation costs when looking to fully electrify their homes.

They also have a much broader importance: helping the utilities manage and reduce the impact of millions of additional heat pumps, electric vehicles (EVs), and other smart appliances that California expects to add to the grid. The additional expected load is not insignificant. For example, California plans to have more than 12 million EVs on the road by 2035.

“These (IPMT) technologies are a real opportunity for utilities in California,” said Nick Neverisky, manager of Consumer Insights at VEIC and one of the authors of a CalNEXT report on alternative technologies that can mitigate the need for an expensive panel upgrade. For utilities, the technologies could make it easier for customers to participate in energy efficiency and demand response programs. It will be welcome help, said Neverisky, noting that “as California moves to rapidly electrify, the state will run into capacity constraints on a grid level, on a neighborhood level, and on a household level.”

With funding from CalNEXT — California’s emerging technology initiative — the VEIC team, with support of the Ortiz Group, recently published a report, “Market Study of Household Electric Infrastructure Upgrade Alternatives for Electrification”. This report looks at four alternative technologies and how each could be used to reduce the overall grid demand, both on a customer and a utility level.

“These technologies can help manage that capacity issue on a larger scale,” Neverisky said, noting that reducing the power demand helps utilities avoid the need for additional distribution infrastructure.

The study included smart technologies in the following four categories: outlet splitters, smart circuit breakers and relays, circuit control units, and smart electric panels.

The outlet splitter is the most basic technology. It is a circuit-sharing switch that splits an outlet between two loads, while preventing them from both drawing power at the same time. It’s designed to control power draw when two major electric devices are in the same room and can share a circuit, such as an EV charger and a clothes dryer both located in a garage.

A big advantage of the outlet splitter is that it does not require professional installation or configuration to meet code requirements. It’s a solution that could be easily utilized by a homeowner or resident. Its low cost and portability make it a good option for rental units.

A circuit control unit is another more comprehensive smart technology option. This is a stand-alone load management device that prevents a device from operating depending on available power on a circuit.

“Let’s say your electrical panel doesn’t have enough space to put in another circuit for the electric car charger,” said Alex Pine, an energy consultant with VEIC and a co-author of the report. “The electrician installs one of these circuit control devices on an existing circuit, for example an electric stove. This allows the stove and electric car charger to share the same existing circuit. When you get home, you plug in the car and the car starts charging. When you start cooking, the car charger shuts off, then resumes as soon as you are done.”

It’s best suited for a low-priority system and a high-priority system, or for two systems (such as heating and air conditioning) that will not run at the same time.

“They’re inexpensive, and they’re very easy to install for a hardwired device,” Pine said. “These circuit control units can be used in an application where the homeowner or resident is looking to add one new electric load and need a simple solution.”

A potential future option currently under development is a smart circuit breaker. A smart circuit breaker provides the same overcurrent protection as a conventional circuit breaker and installs in a conventional circuit breaker panel. Smart circuit breakers, however, can also collect electrical system usage data and control the circuit they are installed on. Smart circuit breakers are currently on the market but at the time of the report did not offer intelligent power management.

When they are on the market, these features could open the door to power management that is scalable, allowing a customer to juggle power between individual circuits in their circuit breaker panel. This is especially important for houses where a range of additional electrical equipment is being added.

A smart panel is the broadest solution. A smart panel fully replaces a traditional electric panel and is fully integrated into the functionality of the home. It typically allows for control, monitoring, and management of all circuits within the house, with features such as energy consumption monitoring and remote access capabilities. It allows customers to better understand how and when they use electricity, which may encourage them to reduce energy consumption overall and/or shift energy consumption to off-peak hours for customers on time-of-use rates. As a smart panel manages all circuits in a building, there is more flexibility in managing circuits including smaller capacity ones.

One big challenge for all these technologies is getting the word out — to customers who would benefit by being able to afford the upfront cost of electrification, to utilities that could benefit from customers managing their increased electricity demand right at the source, and to contractors and electricians, who are key in facilitating their adoption in homes.

“Demonstrating how IPMTs can help homeowners achieve their energy goals, whether electrification or savings, is necessary to gaining customer support for these technologies,” the authors wrote in the report.

Customer buy-in, the authors emphasize, will greatly help California meet its ambitious carbon reduction goals.

“We’ve got older homes that don’t have as much capacity, with residents who do not have the income to afford to retrofit service upgrades,” Neverisky said. “If we want to continue to decarbonize, and do so equitably, these smart technologies are going to be part of the solution.”

As utility customers consider switching out old appliances to cleaner electricity in their homes or adding EV chargers to their garages, these technologies offer a bridge to overcome the first-cost barrier and help facilitate success. Utility incentives could entice customers and give them the confidence boost they need to make the decision to go electric and be a part of the solution to decarbonize California.

To learn more about this project, read the report on the CalNEXT website, or email info@calnext.com to continue the discussion.

Written by Emily Pickrell, this article was submitted by CalNEXT. CalNEXT is a statewide initiative to identify, test, and grow electric technologies and delivery methods to support California’s decarbonized future. CalNEXT is funded by the ratepayers of California investor-owned utilities and provides a means for studying emerging technologies and energy-efficiency innovations that have the potential to save energy via utility programs and/or market support. 

Commentary: Smart panel technology may replace need for pricey upgrades is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Activists pushing San Diego to take over the city’s investor-owned utility aren’t letting last year’s defeat of a similar effort in Maine deter their goal of establishing a nonprofit power company. They recently submitted petitions bearing more than 30,000 signatures from residents who want the City Council to let voters decide the matter this fall.

Advocates say a municipal takeover of San Diego Gas & Electric would deliver cheaper rates and a faster, more affordable, and more equitable transition to clean energy. Still, the measure faces long odds from skeptical council members who have twice rejected similar proposals.

The campaign is the first public power ballot initiative since 70 percent of voters in Maine rejected a proposal to take over the state’s two largest utilities. A group called Power San Diego delivered several cardboard boxes filled with petitions to the San Diego city registrar’s office on May 14. If just over 24,000 of the signatures on those documents are deemed valid, the Council will have to decide whether to put the question to voters in the next election.

What’s happening in Southern California reflects growing frustration with the high rates and lackluster service investor-owned utilities often provide — and a desire to accelerate the green transition. Similar campaigns are afoot in Rochester, New York and San Francisco, and Empire State lawmakers recently introduced a bill to buy out Central Hudson Gas & Electric and create a public power authority. 

“Across the country, people are talking about public ownership of energy,” Sarahana Shrestha, a New York state assembly member who co-sponsored the bill, told Grist. “If we want a just transition — taking care of workers, and making sure that it’s affordable and brings benefits back into communities — there’s no effective way of doing that while you’re still answering to shareholders.”

San Diego residents pay some of the nation’s highest electricity rates, and by one estimate, more than a quarter of customers are behind on their payments. (The utility has attributed its high rates to the cost of everything from wildfire prevention to building transmission lines and other clean energy infrastructure.) Takeover advocates say the move would save residents 20 percent on their utility bills because a nonprofit model eliminates the need to provide shareholders with a return. It estimates the cost at $3.5 billion, citing a study commissioned by the city last year.

That analysis found that the utility’s 700,000 customers who live within the city of San Diego could save 13 to 14 percent annually if the city bought the utility’s grid assets for $2 billion and created a municipal utility. The math is less favorable if the cost of the buyout goes up, however; at a price of $6 billion, ratepayers could face additional costs of $60 million over the first decade but see long-term savings after 20 years.

San Diego Gas & Electric vehemently opposes the effort and has backed the political action committee Responsible Energy San Diego to block it. The organization calls itself “a coalition of diverse San Diego leaders” fighting “a reckless ballot initiative to force a government takeover of the energy grid.” The utility has contributed well over $700,000 to the committee, according to records on the San Diego Ethics Commission website. 

That’s more than twice what Power San Diego has raised and reflects a dynamic in which political action committees supported by Maine’s two investor-owned utilities received 34 times more money than public power advocates. Activists there say that allowed the utilities to finance a robust campaign of advertising and misinformation to defeat the referendum.

San Diego Gas & Electric has hired Concentric Energy Advisors, the same consultants who helped defeat the effort in Maine. The company’s study commissioned by the San Diego utility estimated the cost of a public takeover of the grid at $9.3 billion. 

Matt Awbrey of Responsible Energy San Diego told Grist the city should address other priorities like affordable housing rather than a proposal “to create a new government-run utility that has no plan, budget, or verifiable cost estimates.” He said the cost of the takeover likely would bring “higher taxes, higher electric bills, and/or cuts to essential city services we all depend on.” 

Power San Diego intended to gather 80,000 signatures by July, which would have placed the proposal on November’s ballot. But it lacked the funding for such an effort and decided to seek 30,000 signatures, or roughly 3 percent of registered voters. That would require the City Council to vote on whether to put the matter to voters.

Dorrie Bruggeman, senior campaign coordinator for Power San Diego, doesn’t expect the council to do that; it already has rejected such a proposal on two occasions, with council members calling for greater detail on costs and projected revenues. Council President Sean Elo-Rivera is among those with reservations.

“I have no love for corporate monopolies reaching into the pockets of everyday working people,” he told the local news outlet La Jolla Light. “But this is a very complex and important issue and I don’t think this is baked enough to go to the voters.”

Regardless of any qualms the council may have, Bill Powers, chair of Power San Diego, said his organization has prompted an important discussion within the community and sparked voter engagement on the issue. The next step is getting policymakers behind the idea.

“If we can get a couple of council members that are open to public power, if we can get a mayor who is open to public power, which we’ve had in the past, then the movement isn’t dependent on the endpoint of a ballot initiative,” Powers said.

Such campaigns are gaining momentum elsewhere. Public power advocates in Rochester, New York, want the city to evaluate the costs and benefits of a municipal utility. In San Francisco, city officials are currently working with the California Public Utilities Commission to determine how to set a fair price for Pacific Gas & Electric’s distribution grid, in the hopes of creating a citywide public power system. 

On May 17, New York Assemblymember Shrestha and State Senator Michelle Hinchey introduced a bill to create the Hudson Valley Power Authority, a public power entity that would buy out Central Hudson Gas & Electric. The utility has drawn criticism for its high rates and a string of billing failures since 2021. If the measure passes, the Hudson Valley Power Authority would seek to lower rates, improve service, and hasten the green transition while protecting labor rights.

Joe Jenkins, Central Hudson’s director of media relations, told Grist the proposed takeover would involve “significant hidden costs, loss of jobs, and loss of tax revenue for towns and schools,” adding that rates for municipal utilities in New York are nearly 9 percent more expensive than those of investor-owned utilities. 

Shrestha said the legislation reflects her constituents’ growing interest in public power. Her office has hosted seven town halls this past year to discuss energy democracy. “People are so fed up with getting bills that are inconsistent and late,” she said. “People are really excited about learning how we can actually get public power done.”

High rates, poor service spark new wave of utility municipalization campaigns is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

This story was originally published by Canary Media.

Over the past three years, an unusually broad coalition has come together to champion a new way to finance and build community-solar-and-battery projects in California. It includes solar companies, environmental justice activists, consumer advocates, labor unions, farmers, homebuilder industry groups, and both Democratic and Republican state lawmakers — a rare instance of concord in a state riven by conflicts over rooftop solar and utility policy. 

Supporters say the plan, known as the Net Value Billing Tariff, could enable the building of up to 8 gigawatts of community-solar-battery projects over the coming decades, all of which would be connected to low-voltage power grids that sell low-cost power to subscribing households, businesses, and organizations.

But on Thursday, the California Public Utilities Commission voted 3–1 to reject the coalition’s plan. Instead, it ordered the state’s major utilities — Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric — to restructure a number of long-running distributed solar programs that have failed to spur almost any projects in the decade or more they’ve been in place. 

Critics warn that these utility-backed plans won’t create a workable pathway to expanding a class of solar power that has become a major driver of clean energy growth in other states and a key focus of the Biden administration’s energy equity policy.

They also fear that the CPUC’s reliance on state and federal subsidies to boost the economic competitiveness of these existing failed community-solar models might jeopardize the state’s ability to even qualify for the $250 million in community-solar funding that the Biden administration has provisionally offered it. 

“We are cheating ourselves out of the benefits of community solar and storage with this decision,” said Derek Chernow, western regional director for the Coalition for Community Solar Access (CCSA), which represents companies and nonprofits that advocate for community solar. 

Since CCSA devised the NVBT in 2021, it has won ​“unprecedented bipartisan broad-based support from stakeholders that don’t typically come together and see eye to eye on clean energy issues,” Chernow said. 

The plan the CPUC cobbled together from utility proposals, by contrast, lacks ​“any support — broad-based or otherwise,” he said. 

An outpouring of rage from community-solar supporters

CPUC President Alice Busching Reynolds defended the decision to reject the NVBT at Thursday’s meeting. She pointed to other existing California programs that assist low-income households and multifamily buildings in obtaining solar, and noted that the CPUC’s plan will expand an existing community-solar program that offers low-income customers a 20 percent reduction on their bills. 

She said that the NVBT program was too costly a way to bring new solar-and-battery resources to the state, compared to the large-scale energy projects being contracted by utilities and community energy providers. 

“California is really at an inflection point where we must use the most cost-effective clean energy resources that provide reliability value to the system,” Reynolds said. 

Backers of the NVBT hold a very different view. Since March, when the CPUC unveiled its proposed decision to reject the NVBT, there has been broad public outcry. Letters protesting its proposal have flooded into the CPUC from community-solar advocacy groups, environmental organizations, commercial real estate companies, farmworker advocacy groups, farming industry associations, and Republican and Democratic state lawmakers. 

The CPUC issued a revised proposed decision on Tuesday, ahead of Thursday’s vote, which differed little from the initial March proposal. The only major change was the removal of a legal argument claiming that the NVBT violates federal law — a theory that was met with widespread incredulity and was rebutted by three former chairs of the Federal Energy Regulatory Commission in letters to the CPUC. 

The Utility Reform Network (TURN), a nonprofit that advocates for utility customers, has warned that the CPUC’s community-solar plan will ​“favor large utility companies by ensuring solar program development costs are incurred by home builders, renters, and other solar community participants,” while failing to offer lower-income customers a chance to reduce their fast-rising electric bills by subscribing to lower-cost solar power. 

And 20 lawmakers who supported AB 2316, the 2022 state law that ordered the CPUC to create an equitable and affordable community-solar program, have told the CPUC that its failure to support the NVBT could mean the state falls short on its clean energy and climate goals. 

“Transmission-scale renewables face significant siting, interconnection, and transmission challenges,” creating the risk that utilities won’t be able to hit the aggressive clean energy procurement targets set by the CPUC, the lawmakers wrote in a September letter. ​“Small, distribution-sited community solar and storage projects have incredible potential as we modernize and expand our transmission system.”

Speaking at Thursday’s CPUC meeting, Assemblymember Chris Ward, the San Diego Democrat who authored AB 2316, called the CPUC’s pending decision ​“a dismissal of California’s need for clean, reliable, and affordable energy.” 

“After agreeing with nearly all stakeholders that the state’s existing community renewables programs are not workable, the proposed decision has opted to repeat these mistakes by creating an outdated, commercially unworkable program that will result in no new renewable energy projects or energy storage,” he told the CPUC commissioners, all of whom were appointed by Governor Gavin Newsom (D).

Why California lags on community solar 

California leads the country in rooftop solar and stands behind only Texas in utility-scale solar-and-battery farms. But its community-solar projects make up less than 1 percent of the 6.2 gigawatts of community solar that have been built in the 22 states with policies that support this form of solar development. That’s largely because the community-solar programs that have existed in California for more than a decade have been unattractive to solar developers, financiers, and would-be subscribers. 

The earliest programs, which targeted commercial and industrial customers, charged a premium over standard utility rates, making them undesirable. Later programs created for lower-income and disadvantaged communities have been stymied by limits on how many megawatts’ worth of projects can be built and the size of individual projects, as well as onerous rules that require projects serving disadvantaged communities to be located within five miles of those customers. 

Designed to remove those barriers, the NVBT was modeled on a community-solar program created by New York that has led to more than 2 gigawatts of projects in that state. That structure allows community-solar projects to earn steady revenues from the power they produce based on a complex calculation of benefits. Those benefits include helping to meet state climate goals, bringing clean power to underserved customers, and, importantly, helping to support utility grids by, for example, avoiding the cost of securing power during the rare hours of the year when utility grids face the greatest stress. 

Unlike California’s existing community-solar programs, the NVBT would incentivize projects to add batteries to store and shift solar power from when it’s in surplus to when it’s most needed on the grid. 

And under AB 2316, any new community-solar-and-battery projects in California must provide at least 51 percent of their capacity to serve low-income residential customers at prices that reduce their electricity bills — a valuable option for low-income households, renters, and other utility customers that can’t access rooftop solar. 

“We’re very interested in seeing renters have access to community-solar projects,” said Matt Freedman, a staff attorney at TURN. ​“And we’re excited that the California statute requires at least 51 percent of the benefits go to low-income customers. We think that’s revolutionary — that we’re putting low-income customers first in line to receive the benefits of these projects.” 

To date, California’s community-solar programs have subsidized lower-income customers through funds drawn from utility ratepayers at large or from the state’s greenhouse gas cap-and-trade program. NVBT backers hoped the structure they proposed would allow projects to earn enough money in their own right to support reduced rates for lower-income customers. 

Why the CPUC rejected the NVBT

But all the revenues and benefits of community-solar-battery projects under the NVBT rely on a common factor, Freedman said: being able to tap into the same value structure that dictates what rooftop-solar-equipped customers served by California’s three major utilities earn for their solar power. That structure is called the avoided-cost calculator, and AB 2316 explicitly cited it as the metric that the CPUC should use to determine the value of community solar, he said. 

The CPUC’s decision rejected that reading of the law, however. Instead, it agreed with the state’s big utilities that the solar-and-battery projects that the NVBT would finance could increase costs on some of the state’s utility customers in excess of the value those projects would provide to customers at large. 

To reach that conclusion, the CPUC didn’t compare the cost and value of community-solar-and-battery projects against the value assigned to rooftop solar systems and other distribution-grid-connected clean energy resources. Instead, it compared their value against wholesale ​“avoided-cost” rates of electricity generated by power plants, utility-scale solar-and-battery farms, and other large-scale resources. 

Those resources provide power that’s much cheaper on a per-kilowatt-hour basis than power from community-solar-battery projects, which face higher land and construction costs connected to building in more populous areas, and which can’t match the economies of scale achieved by solar-and-battery farms in the hundreds of megawatts apiece. 

But by choosing that comparison point, the CPUC also dismissed the value that distributed community-solar projects can provide by delivering power much closer to customers than far-off power plants and solar farms connected by expensive high-voltage transmission lines, Freedman said. 

A better comparison, he suggested, would be against a form of solar-and-battery power that community projects could actually supplant to significant economic benefit — the solar systems all new homes and many new commercial and multifamily buildings must include under California building codes. 

That’s why the California Building Industries Association trade group has been a strong supporter of the NVBT. CBIA estimates that the state’s building codes will require the addition of 250 to 400 megawatts of new solar per year over the coming decade to keep up with the pace of residential construction. Community solar and batteries under the NVBT could be a much cheaper way to meet those requirements — but only if developers have a program that makes building those projects economically viable. 

A problematic replacement plan 

It’s hard to see how the CPUC’s newly enacted Community Renewable Energy Program (CREP) structure will make that possible. 

In essence, the CPUC has ordered utilities to restructure two existing tariffs that allow distributed energy projects to sell their power to utilities at wholesale avoided-cost rates: the Renewable Market Adjusting Tariff (ReMAT) program, which allows projects of up to 3 megawatts, and the Public Utility Regulatory Policies Act (PURPA) Standard Offer Contract, which allows projects of up to 20 megawatts.

But the low prices and short contract terms for these structures have been extremely unattractive to clean energy developers. No project has been completed under the ​“standard offer contract” structure since 1995, and only one 3-megawatt solar-only project has been built under ReMAT since 2021, Freedman said. 

It’s hard to envision lenders or investors backing a solar project with such an unclear pathway to profitability, CCSA’s Chernow said. What’s more, neither of those tariffs reward projects that invest in batteries to store solar power when it’s not as valuable for the grid and discharge it during times of grid stress, he said. 

“You don’t get the scalability, you don’t get the growth, you don’t get the storage — you don’t get all of the avoided-cost benefits that were originally set up with the Net Value Billing Tariff,” he said. 

To make matters worse, both of those programs are meant to supply lower-income customers with solar power that can reduce their electricity bills, Freedman said. But retail electricity rates in California are five to six times higher than the wholesale rates that the CPUC would allow these projects to earn. 

To make up for that discrepancy, the CPUC has ordered utilities to use ​“external funding or incentives” to offer credits to subscribing customers that are structured in a way that doesn’t increase their utility energy costs. Low-income customers, which must make up at least half of all subscribers, ​“will receive no less than 20 percent” bill credits. 

But at present, the only money the CPUC has identified for these external sources is $33 million in state-approved funding available for community-solar usage and storage-backed renewable-generation programs. Beyond that, Thursday’s decision orders utilities to look to federal investment tax credits and a set of programs created by the Inflation Reduction Act to spur investment and lending in underserved communities, including the U.S. Environmental Protection Agency’s $7 billion Solar for All program.

Last month, EPA announced 60 provisional recipients of that funding. California is set to receive $249 million, pending approval of how it plans to spend the money — including a commitment to ensure that low-income customers who participate will be able to lower their electricity bills by at least 20 percent compared to what they were paying before. 

CPUC President Reynolds noted at Thursday’s meeting that ​“while we’re still waiting for guidance from U.S. EPA, we hope to use a significant portion of this funding to support projects and subscribers in this new program.” 

But NVBT advocates say it’s far from clear that the programs that will evolve from the CPUC’s decision will provide the underlying utility tariff structures that could allow that federal funding to jump-start a commercially viable community-solar market. In fact, CCSA has calculated that the $249 million in federal funding would allow only about 50 megawatts of community-solar-and-battery projects to achieve economic viability under the CPUC’s proposal and still achieve the Solar for All program’s low-income energy-cost reduction targets, Chernow said. 

That’s a far cry from the gigawatts of solar-and-battery projects financed and built by independent developers on a cost-effective basis that the NVBT could have incentivized to be built. But Freedman pointed out that even that relatively small-scale expansion might not be possible if developers decline to participate due to lack of clear long-term economics. 

“Even if the state gets the commitment from the money, will we be able to spend it? If you design a program that developers don’t subscribe to, and there are no resources under the program, there’s no draw on the program,” he said. 

CPUC Commissioner Darcie Houck, who voted against the decision, echoed some of these concerns at Thursday’s meeting. ​“The reliance on funding that may or may not be available in the future puts the program either at risk of failing or potentially having to have ratepayers cover the full cost of the program going forward,” she said. Houck was outvoted by commissioners John Reynolds and Karen Douglas and CPUC President Reynolds, with commissioner Matt Baker recusing himself.

Chernow said the CCSA planned to ​“work within the CPUC’s process to try to fix this as much as we can.” But without significant changes, he warned that the structure set by Thursday’s order stood little chance of spurring the kind of community-solar growth happening in other states. 

The U.S. Department of Energy has set a goal of building 25 gigawatts of community solar by 2025, a fivefold increase from today. But Chernow fears the country as a whole ​“can’t get to these federal goals without California — and California can’t get there with this proposed decision.”

California regulators reject plan that would’ve boosted community solar is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.