The Wart on California’s Community Solar Program for Utility Customers

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We often think of California as a leader in clean energy. But the state’s new community solar program for utility customers–the result of SB 43–is not a move that other states should follow.

The legislation established both a green power program and a community solar program for utility customers under which customers can acquire as much as 100 percent of their power from solar energy.

So far, so good.

But a look at the details of how the state prices the programs reveals a wart in what would otherwise be a big plus in California’s clean energy efforts.

The program will likely come with a 2 to 6 cent/kWh premium, said Erica Schroeder McConnell, attorney for Interstate Renewable Energy Council. That’s 2 to 6 cents/kWh added to prices that are already high–around 16 cents/kWh, she said.

“That’s one thing that IREC is concerned about,” she said. “It will cost more — and significantly more in some cases.”

Under the community solar program, customers sign up with a developer, generally to receive solar from a project nearby. They pay the developer to participate and get credits from the utility — but the “credits” result in customers paying a premium.

“The initial estimated premium of two-to-three cents per kilowatt-hour likely will fall over time as solar costs decline relative to the cost of PG&E’s standard power, which is more than 25 percent renewable today,” said PG&E in a press release.

The problem, said Schroeder, is the program takes a short-term view of the value of solar.

“This is the way the bill credit was calculated. It doesn’t look at the long-term benefits,” she said.  “The benefits were undervalued.”

The bill credit will be re-calculated every year, which means that customers who sign up don’t know what they’ll be paying in future years.

“As customers, you won’t know what the price will be going forward. That makes us think we need to go back and think again about how it is done.”

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Colorado and Minnesota have better programs that take a longer-term view of how to value the energy, she said. For example, under Xcel Energy’s Solar Rewards Community program, the solar will be developed, built and managed by cities, towns, developers or community cooperatives, according to the company. When the solar projects are complete, customers can buy a share of the “solar garden” and experience lower electricity bills. The program uses “virtual metering,” under which customers get credits for purchasing power from a solar facility that serves many people. It’s similar to net metering, said Schroeder.

Virtual metering generally offsets a full kWh of the customer’s bill for each kWh of solar energy, Schroeder explained. In comparison, the California is more of a charge.

It’s a surprise that California would unveil a clean energy option that’s so out of reach to the average utility customer. Here’s hoping that IREC convinces the California Energy Commission to go back to the drawing board and create a program that boosts community solar options for people from all income brackets.

What’s your opinion about California’s community solar program? Please post your thoughts below or on the Microgrid Knowledge LinkedIn group.

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