The debate over rooftop solar through NEM 3.0 in California put the solar industry at odds with consumer groups and unions, but another solar policy issue has now united them in a new fight. The overhaul of the state’s community solar program brought together consumer groups, union workers and the solar industry to try to make this sector of solar energy work for developers, workers and consumers alike.
The unlikely alliance first emerged when the Coalition for Community Solar Access (CCSA) included a community solar proposal in the NEM 3.0 discussion.
“When California started revisiting net metering in 2020, it seemed like a natural time to say, ‘Hey, here’s a model that, at least for new DERs [and] community solar could be a model by which we can address the key concern around distributed solar that has been a cost shift,” said Brandon Smithwood, senior policy director at Dimension Renewable Energy, a community solar developer.
The CPUC did not advance the proposal then, but The Utility Reform Network (TURN) and the Coalition of California Utility Employees (CUE) began working behind the scenes with CCSA to craft a plan to rework the state’s stalled community solar market.
In comments to the CPUC during the new community solar proceeding, CCSA said the commission has tried unsuccessfully since 2013 to develop a community solar program to equitably expand access to renewable energy sources.
“Existing programs are ambiguous, they do not result in robust participation among low-income Californians, and they are inefficient in serving clients,” the comments said.
The coalition’s reform efforts culminated in the passage of AB2316, a law that requires utilities serving 100,000 or more customers to establish and implement community solar programs that serve at least 51% low-income customers and are constructed by employees who pay prevailing wages.
The groups then continued to work together on a proposal to the CPUC about what these programs could look like, ending with the Net Value Billing Rate (NVBT). This rate program would compensate subscribers of community solar projects up to 5 MWAC based on the value of a project’s generation at the time it is supplied to the grid. To be profitable, the structure would require projects to be co-located as storage.
The community solar proposal united these usually opposing groups for a number of reasons. Both TURN and CUE say they oppose NEM 3.0 because of the cost shift of solar incentives to non-solar customers. But the new community solar proposal was generally supported by these groups because of the different value structure used in the incentive methodology.
The NVBT used that of the state Avoided Cost Calculator (ACC) to determine project offsets – the state’s official solar energy evaluation tool, which measures the utility’s avoided costs through solar energy. The calculator contains statistics such as ‘environmental value’ and ‘generation capacity’.
“Using the avoided cost calculator seems to us to be the right way to anchor the valuation of the output of the shared facilities, as it is consistent with our vision of decoupling compensation from retail rates, which include all these costs that are nothing to with the value of generation,” said Matthew Freedman, staff attorney for TURN.
CUE also supported the ACC method because it is designed to avoid cost shifting between participating and non-participating customers. The group of utility workers also supported NVBT because it would require projects to be connected to the distribution grid instead of the larger transmission grid.
“In California we have a very large backup in the ISO interconnect queue. This community solar proposal would bring more solar and storage online faster. Not only is that great for our climate goals, but it will also create new jobs across the state,” said Rachael Koss, an attorney at Adams Broadwell Joseph & Cardozo, who represents CUE before the CPUC.
Both groups also supported NVBT for its potential under the Title 24 mandate for solar on all new homes. Title 24 technically allows community solar as an alternative to rooftops for compliance, but the current community solar program did not incentivize developers to choose that path. CUE would like to see more community solar instead of rooftops to meet this requirement.
“That’s much more cost-effective for non-participating ratepayers, if you use community solar for Title 24. That’s why we urged the PUC to approve the joint proposal for this small segment of the market,” Koss said.
CPUC Roadblocks
Despite the mixed support for the NVBT, the CPUC rejected the proposal in March, saying it “contradicts federal law and does not meet the requirements” of AB 2316. Instead, the committee proposed that utilities PG&E and SCE available cost ceiling. to disadvantaged communities through community solar energy.
“We do not believe that with this program the utilities should be responsible for selecting the projects. We have ten years of experience with that, and the program is just a dead end. The utilities are fundamentally not motivated to make these programs work. They are focused on making them niche products,” says TURN’s Freedman.
But far more consequential than the program that continues to languish is the commission’s claim that NVBT violated the federal PURPA law, which requires utilities to purchase renewable energy from qualified facilities if energy costs are equal to or lower than fossil fuels. fuels. The coalition and others argue that solar energy connected to the distribution grid falls under state jurisdiction, not federal jurisdiction.
“You have over 20 states with existing programs that are very similar to the type of program we are proposing in California,” Freedman said. “The idea that essentially all of these state programs are covered by federal law is extremely problematic.”
Other state and federal leaders agree that these small community solar projects do not fall under the jurisdiction of the FERC wholesale market, including Republican lawmakers in California Senator Shannon Grove And Assemblymember Vince Fong and former FERC commissioners Norman Bay, Neil Chatterjee And Jon Wellinghoff.
“During my tenure as chairman of the FERC, we ensured that the FERC did not prejudge decision-making on retail programs such as community solar, where states have exclusive jurisdiction,” Wellinghoff wrote.
Along with these letters, Freedman said other state governors, including New York Governor Kathy Hochul and Massachusetts Governor Maura Healey, have contacted California Governor Gavin Newsom to express their concerns about the proposed decision and the consequences of PURPA. Even the White House called Newsom as the administration set a goal for community solar systems to generate an equivalent of electricity five million households in 2025.
“The goal is to prevent California’s outcome from nullifying other state programs. That would be a total epic disaster,” Freedman said.
The committee has now postponed the vote on its proposed decision twice and met twice behind closed doors on the subject. Advocates have also continued to meet with committee staff and other leaders to urge them to change course and reexamine the NVBT. The coalition hopes that their proposal will be taken into account in the final decision.
“It’s not like these are the same people, these are the same divides that we had at DG Solar,” Dimension’s Smithwood said. “I think it’s a fair assessment that the committee is going to need some time because they’re listening to these voices and saying, ‘Hey, maybe this deserves a second look.’”