Tag Archives: Community Solar

California’s Distributed Energy Future

GTM Research has established itself as the premier source of information on solar industry trends and developments in the United States. It’s instructive that from that perspective, they chose to organize a conference focusing on a single state, California.

We who participate in the solar industry here have recognized the state as a leader, but the less patronizing among us also recognize that the magnitude of this lead is only temporary. If solar is to realize its potential as one means of reducing environmental damage while reducing future customer utility costs, then other parts of the United States need to catch up (and as GTM’s latest data for 2015 shows, they are).

Nonetheless, as GTM Research Senior Vice President Shayle Kann observed in his opening keynote at GTM’s California Distributed Energy Future conference in San Francisco, California remains the epicenter of next generation distributed energy (DE) regulation and is at the forefront of the shift toward distributed energy in the U.S. And (I would add) what happens in California doesn’t always stay in California. Hence the conference to examine California’s transition to a distributed energy future and consider what’s working and what isn’t.

The discussions at the conference covered a variety of issues confronting the state. Here is an overview of the key themes coming out of the discussions, and the insights shared by the different speakers:

The strongest and most frequently recurring theme was that of the interaction of Distributed Energy Resources (DERs, essentially distributed solar PV) and the electrical grid. This issue has numerous dimensions, and subsequent “fireside chats” helped highlight some of these.

Appropriately the first discussion was with a Senior Vice President from Pacific Gas & Electric (PG&E), California’s largest investor-owned utility (IOU) and the utility with more connected PV capacity than any other in the United States. Issues were fairly raised: e.g., how should rates be structured to fairly compensate the value of Grid access received by the customer, how does PG&E envision an environment of growing Community Choice Aggregation (CCA) systems and how is the Grid managed for reliability. Unfortunately, the moderator for this session let the PG&E representative off with the stock, PR answers: “we have to make changes in our rate structures”, “they can work, note how long Marin (Clean Energy, 2010) and Sonoma (Clean Power, 2014) have been in service”, and “we need to build in robustness.”

Ah well, at least subsequent chats returned to DER issues in more depth. DERs can lower costs for Grid operators / managers; experiments were cited by both Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) involving combinations of storage and DERs. Time of Use (TOU) pricing is coming, and 150 studies worldwide on this issue indicate that customers like this. But there is just too little experience with California’s residential customers while the customers themselves have too little information on which to make decisions as to costs versus savings.

Questions were also raised about Grid planning, to which respondents appeared to agree that too much is moving to identify a “right” strategy, especially as there isn’t even agreement on how to weigh technical issues such as reliability against other social goals we “should” be pursuing. The underlying complexity raised by these superficially straightforward questions was well-highlighted.

Michael Picker, President of the California Public Utility Commission (CPUC) noted that despite all the issues the CPUC addresses, DE issues are of significant importance. CPUC needs to consider even the framework for its decision making processes going forward. A system designed to regulate railroads in the 1890’s may not provide the responsiveness and flexibility for regulating changes to utilities in a rapidly evolving technological, economic and social environment. The “adversarial” approach used in CPUC proceedings may not be the best approach—why is the current process more dependent on legal skills than on engineering skills? The desire is to move forward not too fast, not too slow in opening the market to competition while allowing utilities to remain viable business entities. These are issues that could keep one up at night.

Michael Picker (CPUC, left) and Shayle Kann (GTM, right) during their “Fireside Chat”

GTM California's Distributed Energy Future Conference

The second, albeit lesser, recurring theme I heard at the conference was that of CCA developments. Until this year, there have been only three of these organized in California: Marin (with subsequent geographic extensions) and Sonoma were cited above, and Lancaster Choice Energy was launched in 2015. San Francisco’s Clean Power SF, Silicon Valley Clean Energy and Peninsula Clean Energy (San Mateo County) are in the process of launching this year.

As Mark Ferron, CAISO Board of Governors, cited, in 5 years 60% of the state’s eligible population could potentially be served by CCA’s if all programs now in discussion came to completion in that time. He provided a link in later discussion which I repeat here for those who want to follow up on the tally he reported: climateprotection.tumblr.com/tagged/Community-Choice

CCA’s make solar available to those in multi-family dwellings or who own a home not situated with a solar-favorable orientation or location. Expansion of solar power to these customers is required if solar-based power is to expand. Yet as Michael Picker observed, CCA “forced collectivization is a coup against the traditional utility model, challenging utilities and eroding the role of the PUC.” We don’t know yet where this takes existing suppliers and industry participants.

The challenges of the new, evolving energy infrastructure are actively being addressed by the states of California and New York. Conferences such as this provide an excellent opportunity to reflect on the issues and the difficulty this transition poses for firms competing in the market, regulators and the state legislatures who will eventually need to rewrite the rules for structuring state energy markets.

State Policy, Utilities Ignite Community Solar Growth

By Rebecca Kern, Bloomberg BNA News

The community solar market is heating up thanks to favorable state legislation and interest from utilities in installing solar panels that provide cost-sharing among consumers who don’t have access to rooftop solar. With nearly 50 percent of the households and businesses unable to host rooftop solar systems, community solar is a largely untapped market for consumers looking to invest in solar, which is becoming cheaper than retail electricity in parts of the country.

Developers, analysts and utilities predict that the pace of community solar will continue to grow in the future as prices of solar decline and more utilities get involved. Solar developers and utility companies are driving a lot of the growth in the community solar market, leading to a projected 59 percent annual growth rate over the next five years. Legislation in a handful of states encouraging the development of community solar systems has also driven a lot of the growth in community solar over the past several years.

Minnesota, California, Massachusetts, Colorado, and New York are the states that “have set forth mandates in a very cookie-cutter program design to attract a lot of companies that are looking to scale up their community solar presence quickly,” Cory Honeyman, a senior analyst at GTM Research, said. Much of the near-term growth in community solar is concentrated in those four or five state markets “that have the right design in place for scale,” and 90 percent of the installations expected in 2015 and 2016 will take place in states with community solar legislation in effect.

Community solar is currently economically viable in parts of the country where electricity rates are high and has the potential to become more competitive in the future, analysts and developers say. The savings that community solar subscribers receive depend on the cost of electricity in the region and the solar resources in the state, and the electricity rates depend on the competitiveness of the electricity market, Glen Andersen, energy program manager at the National Conference of State Legislatures, said. “They have high electricity rates in California, for example, so it does make [community solar] more competitive. But if you were in a state like Kentucky, where electricity rates are really low, whether or not you’re going to see savings over just buying it from the utility is more questionable,” Andersen said.

Read full article from Bloomberg BNA

Related article: Note to Utilities: Here’s Why 2015 is the ‘Tipping Point’ for Community Solar (Aug 11)

 

Note to utilities: Here’s why 2015 is the ‘tipping point’ for community solar

By Herman K. Trabish, Utility Dive

With many utilities addressing the challenge of rooftop solar, community shared solar is fast emerging as an appetizing solar business model. A top solar research firm now says 2015 is the year that the community solar market breaks through.

A new market report forecasts community shared solar developers will grow 2014’s 65.9 MW of cumulative installed capacity to 465 MW by the end of 2016. A 59% annual growth rate for the sector over the next five years will take the 21 MW installed during 2014 to 534 MW installed during 2020, it predicts. “2015 is the tipping point year when community solar becomes a relevant sector in the broader U.S. solar opportunity,” said GTM Research Sr. Analyst Cory Honeyman, co-author of U.S. Community Solar Market Outlook 2015-2020.

Two key factors will drive the transition. First, the key states of Colorado, Minnesota, California, Massachusetts, and New York now have the kind of governing laws in place that give developers, utilities, and customers the confidence to buy in. Some 90% of installations in 2015 and 2016 will come from states with community solar legislation in place, the report forecasts, and 82% of that will come from the top four markets of Colorado, Minnesota, California, and Massachusetts. Second, community shared solar developers Clean Energy Collective (CEC) and SunShare have proven there are workable answers to questions about the business model. That is now bringing big, deeper-pocketed national players to the marketplace.

Read full article from Utility Dive