California’s SB 43 promises to bring solar and other renewables within reach of those who don’t currently have access. Will the legislation achieve that lofty goal?
When it comes to solar power, how do we ensure participation and access? Sachu Constantine of the California Center for Sustainable Energy posed this question at a recent Agrion event on the California Shared Renewable Energy Program.
Large portions of consumers don’t have access to solar and other renewables. Whether they rent, have a shaded roof, or can’t participate for a number of other reasons, by conservative estimates 75% of Americans can’t go solar. And solar provides long-term benefits that we’d all like to share in.
Solar power, Constantine noted, is not just another commodity. “This is a game-changing moment,” he said, “when we really rethink the way our economy fuels itself.”
What’s in SB 43?
Out of these concerns, California’s SB 43 was born. The bill, which passed last year, will let participating customers purchase 100% of their electricity from renewable energy, receiving a bill credit from a renewable project as if it were located on their own property. SB 43 is now in the implementation phase at the California Public Utilities Commission (CPUC).
On hand to provide insights were Gabe Petlin of the CPUC, Susannah Churchill of Vote Solar, Jeff Kayes of Morrison & Foerster LLP, Michael Wheeler of Recurrent Energy, and Jeremy Waen of Marin Clean Energy.
Petlin outlined the main goals and requirements of the bill.
Expand access to renewables to all ratepayers
Facilitate a large and sustainable market for offsite renewables
Fairly compensate utilities for the services they provide
Ensure that nonparticipating ratepayers do not bear the costs of the program
Offer utility customers the opportunity to support renewable energy
Up to 600 MW of RPS-eligible renewables proportionally allocated to the three California IOUs between now and 2019
Maximum facility size of 20 MW
100 MW set aside for residential
100 MW set aside for small projects of up to 1 MW in environmental justice areas
Renewables projects should be in some reasonable proximity to enrolled participants
Use commission-approved methods for procurement
Customers will pay a renewable energy rate plus an administrative charge, and will receive a bill credit
RECs in the program are retired and not counted toward RPS, unless they are unsubscribed
Churchill pointed out that the legislation differs from green tariff programs in two ways: It results in new generation, rather than allowing the purchase of unbundled RECs, and it lets customers save money rather than paying a premium for a green option.
The new legislation will allow more people to participate in renewables, but is it community solar?
That depends on how you define the term. It’s telling that the bill shifted from being known as a community solar bill to now bearing the moniker “Green Tariff Shared Renewables Program.” It’s heading in the direction of community solar, yet how close it will get remains to be seen.
As Churchill noted, the devil is in the details. A lot is still to be worked out in the bill’s implementation.
According to Petlin, one key sentence in the bill supports the community renewables aspect, covering a concept some see as a centerpiece to the bill. Yet it is not well defined. The sentence, the focus of ongoing debates, reads, “A participating utility shall provide support for enhanced community renewable programs, to facilitate development of eligible community renewable resources located close to the source of demand.”
What would make a successful shared renewables program in California? Churchill outlined a couple main elements:
Fairness: To Churchill — in a sentiment echoed by Waen — this means not only being fair to non-subscribers but also to subscribers. Affordability, she said, is key for the program’s growth. The utilities are still working out the costs, but at the moment they’re proposing a net premium of 2.5 – 3 cents kwh above what customers currently pay for their power. While the premium would decrease over time, we still need to start with a fair price.
Flexibility: In the huge market being covered, it will be important to meet a variety of customer preferences such as project size and location. Customers should be able to sign up for a specific project — which would be another difference from a green tariff program. All three IOUs have been required to propose this kind of option in addition to a program that allows customers to buy into a pool of projects.
In addition to whether a customer can subscribe to one project or a pool of projects, another question is whether low-income communities would get a discounted rate. This is not specified in the bill.
And then there’s the question of what can be offered to customers on Day 1. Projects can’t be built instantly. One option would be to start by buying into an existing portfolio and then build new projects. A number of other models may be considered.
The CPUC will make a decision on the IOUs’ proposals in July.
While SB 43 is not promoting what most of us would consider “community solar,” it holds the promise of increasing access to solar and other renewables.
SB 43, Wheeler said, is creating a new market in which every customer has the chance to be treated as a key account. It can even be seen as part of the sharing economy. And the consumer, Kayes said, is the driver — in a major shift from from not knowing where their power comes from.
Churchill, too, noted that until now, the amount of renewables in our power mix has been largely legislated by states via the RPS mechanism. But that means there’s a ceiling on the amount of renewables. “With shared renewables, we’re allowing customers to drive the amount of renewables in the power mix instead,” she said. “Assuming we can get these programs working right and fairly, it revolutionizes the whole system.”
Of course there’s still a cap on the program. But if the program is successful and consumer demand is strong, this could be a small step to something much bigger.