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The California Public Utilities Commission has approved two radical programs in recent years to boost community solar construction in the state, but the market has not yet gained ground. Solar developers are scrambling to organize projects as these programs advance and new opportunities arise.
"There is no community solar market yet, but we are about to experience it in real life," said Martha Guzman Aceves, Commissioner of the CPUC, in an interview with GTM.
California is a leader in US solar development, but the state has deployed few community solar projects, with just over 100 megawatts of unique projects built to date. Community solar energy has not found its place in the state. Today, there is virtually no community solar project running on the territory of utilities owned by Californian investors, who make up the majority of the state.
This is a problem because millions of people in California rent their homes or are unable to install solar panels on rooftops. Community solar energy provides a point of access to these people.
"There are a lot of obstacles to installing on the roof to install solar energy when you do not own it," said Guzman Aceves. "At the most basic level, our plan is for a large population in California that he would never have access to. This is a very good thing in this regard.
The first program, adopted by the CPUC in January 2015, is dubbed the Reinforced Renewable Energy Program. Under this policy, created by the Senate (SB) 43, developers market community solar energy directly to customers as an electricity product. Customers can buy a share of a local solar project directly from the developer, then receive a credit for avoided production costs from the utility. The program represents a slice of the 600 megawatt renewable energy portfolio of the state's Green Tariff, but there is no specific separation for community solar power.
At the present time, projects of just over 7 megawatts are under construction or awaiting approval under the Renewable Energy Renewal Program:
- In Sheep Creek, near Victorville, in southern California, developer Jaton is working on a 3 megawatt solar farm located in southern California, Edison (SCE). Jaton's formed in 2016 and seeks to leverage the state's community solar programs.
- In Campo, a city located along the Mexican border, ForeFront Power is currently developing a 2.4 megawatt project with San Diego Gas & Electric.
- In Fresno County, Northern California, ForeFront is working with Pacific Gas & Electric (PG & E) on a 1,656-megawatt project.
Although the situation is difficult, ForeFront is becoming a key developer of California's nascent community solar programs. In 2018, PG & E launched a call for proposals regarding solar community energy and ForeFront submitted 11 projects with a power exceeding 37 megawatts. All have the potential to connect to the future. In a public letter dated 4 February 2019, the utility indicated that ForeFront's projects had been "selected for award and their continued participation in the RFO".
A problem with the Enhanced Communities Renewable program is that solar energy is a premium, instead of offering savings to customers because these projects do not qualify for net billing credits. In 2015, PG & E began offering community solar power at a premium, and it took years for real action to be taken.
Solar tariff of disadvantaged communities
In June, the CPUC approved a second program, the Community Solar Green Tariff, which has opened a pipeline for an additional 41 megawatts of community solar power. The tariff stems from a provision of the 2013 bill, AB 327 – sometimes called tariff reform bill – which imposes a growth of the solar industry in what the state calls " disadvantaged communities ".
The program results in a 20% reduction in the bill for people living in heavily polluted and poor areas who want to participate in community solar energy. Projects must be within 5 miles of their home. Developers and utilities operate with traditional power purchase agreements.
In Southern California, the SCE is well positioned to take advantage of the new tariff. According to the public service, nearly half of the neighborhoods eligible for this new program are located on its territory.
"We found that our current solar penetration was already in this area," said Jessica Lim, SCE's chief product, product and customer service manager. "This is where most of the solar projects come from and customers can benefit from savings in this area."
SCE estimates that it can serve 5,200 customers with the 18 megawatts allocated to the utility under the program.
Community Choice Programs
The Enhanced Communities Renewable and Community Solar Green Tariff programs are not the only way to deploy solar power in the Golden State.
Last year, SCE proposed a series of community-based solar programs to address some of the pitfalls of other programs. Customers in the Sacramento Municipal Services District can already participate in a separate solar program. Local organizations that provide electricity to residents, community aggregators of choice (CCA), are also developing their own initiatives.
Guzman Aceves said CCAs are not subject to the same regulatory restrictions as utilities. "CCAs can do something faster, theoretically, and that's a good thing," she said. "They have a lot more flexibility."
However, with regard to the Community Green Tariff for the environment, DPAs could create a problem.
The SCE territory in particular includes many "disadvantaged communities" eligible for the program, but many of these communities straddle the territory of the CCA, which could create problems if local groups pursue their own solar programs. According to Guzman Aceves, PG & E has less overlap between its eligible neighborhoods and the DPA service area on its territory, which means it may be able to move faster.
"One of my messages to the CCA and the utility is to make sure we work together on this type of project," said Guzman Aceves. "Do not make it five years more to point fingers, but see this as an opportunity for collaboration."
Program constraints
Regulators are currently considering proposals under the Green Community Tariff for Solar Energy, which is expected to come online in the second quarter of 2019.
Supporters of the proposal believe that building solar energy in polluted neighborhoods will reduce air pollution, but some developers complained that program constraints were too stringent and could limit growth.
Brandon Smithwood, Policy Director for the Coalition for Community Solar, said: "You're asking developers to find a place where you have enough customers and where you can connect to the distribution network. You can hardly connect to many places on the grid. And this adds the need for all your customers to be in a small geographical area around projects. "
He added that the new CPUC community solar contracts are a good sign, but they do not guarantee that nothing will be built.
"The question of whether these programs can work is still an open question" Smithwood said. "Then I think it's clear that they're not scalable. You have very complicated programs that do not really correspond to the major trends of the state. "
Smithwood argues that community solar can be used as a means of extend and experiment with the following programs for net billing. "It's a way to create a community solar program that is not these individual programs that have extremely complex requirements and restrictions," he said.
Guzman Aceves said she was concerned about setting up a net energy measurement structure for community solar energy because of what she called an increase in predatory actions of electricity service providers.
"There is a game that can happen with NEM that can not happen with a fixed fee," she said. "Not all developers use this approach, but this is happening with the NEM structure, especially in low-income communities, monolingual households and the elderly, and it's a very big problem. "
SCE Community Suite of Programs
SCE last September asked regulators to approve a list of community-oriented clean energy options. At the time, they recognized that the current community solar energy program was not working very well.
They designed an alternative set of programs. In total, SCE's proposal generates 181 megawatts of new projects, with an exception of 45 megawatts for low-income participants. They estimate that the suite of programs could serve over 82,000 clients.
With one initiative, SCE could bring together customers for community solar projects, rather than soliciting a developer or community-based organization to do this work through contracts.
"Today, with our current program, we do not really play a direct role in forming a community solar project," Lim said. "We facilitate a solicitation process for the market. With this new program, if approved, SCE will be at the center. We will be the connector with the customers and the communities. "
"C."Community solar energy is an important part of our clean energy future," said Mr. Lim. "For us, it's still in its infancy. We simply want to develop this program and try to innovate in our approach by focusing on disadvantaged communities. "
CPUC officials are currently reviewing the proposal and approval is not guaranteed. In a memo, officials asked if SCE could end its existing program without violation of the regulations.
CCA and community solar
East Bay Community Energy, Alameda County CCA, is developing a program that Nick Chaset, the group's top leader, calls "a version of community solar energy more suited to local governments."
The idea is to couple city loads with renewable production. If the program can evolve, it will be accessible to all customers of the group.
Chaset said that unlike CPUC programs, there would be no third party contractor. Instead, the city would subcontract the project directly through the CCA.
Customer demand would be the only impediment to program growth. Projects could be built locally or located further.
"What differentiates this concept from a standard product to 100% renewable energy, is a time commitment," said Chaset. "Municipalities commit for a longer period, and that's what makes the project built."
"We are a community-owned supplier," he said. "In some ways, all our solar is a community solar."
Energy and equity
Grid Alternatives, one of the largest non-profit solar installers in the US, is also moving toward community solar power.
Already, they are working with SCE, the Greenlining Institute and other political and advocacy organizations as part of a pilot initiative called Task Force on Access to Clean Energy. The goal is to create community solar projects designed, directed and managed by local groups.
Still in development, a potential site is located in Compton, on land owned by Ujima Housing Corporation, a non-profit group, according to SCE.
Michael Kadish, Executive Director of the Working Group, stated that it is important that community solar projects bring real savings to customers, and the group is exploring new options for community solar energy. "We are used to saving 80% on the energy bill of people," he said. "This is the level of profit we are seeking to offer."
The group recently hosted a conference on the subject in Los Angeles. The meeting explored successful models across the country and tracks for improving programs in California.
"Community solar energy is interesting and a potential for us, if you understand our mission, "said Kadish. "We are committed to bringing the benefits of renewable energy to underserved communities where most people are tenants."
Community solar energy holds potential for many stakeholders in California. The challenge has been and will continue to find ways to exploit this opportunity.
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