4 Major New Rulings That Will Boost Solar Power and Energy Storage in California

As goes California, so goes the rest of the nation. Lawmakers pass a suite of laws to expand California’s solar investment.

Eric Wesoff October 15, 2013

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

It's often the hand of regulators and legislators that guides the direction of regulated utilities, rather than the hand of the free market. And when it comes to renewable-energy-friendly legislation, the summer and fall of 2013 were mostly unicorns and rainbows for the fate of solar power and energy storage in California. Here's the rundown.

Solar Power

AB 327: Net metering and rate reform. AB 327 is now California state law and it ensures that net metering (which pays solar-equipped customers retail prices for the solar power delivered to the grid) will stay in place until at least 2016. The law also gives the California Public Utilities Commission authority to completely remove caps on the program, rather than sticking to the 5 percent of nameplate generation capacity quota that was previously in place.

The law carries with it a signing statement from Governor Jerry Brown. As reported by Jeff St. John, Brown noted, "As the CPUC considers rules regarding grandfathering of net metering customers, I expect the Commission to ensure that customers who took service under net metering prior to reaching the statutory net metering cap on or before July 1, 2017, are protected under those rules for the expected life of their systems."

The value of solar power and the threat that net energy metering poses to the utility business model will be demonstrated, one way or another, in the California laboratory in the coming years.

SB 43: Shared solar, community solar, solar gardens, and virtual net metering. This type of solar financing has name-recognition and brandings problem, but basically it allows renters or people with shaded roofs to go solar. Signed into law earlier this month, the law launches a new 600-megawatt program that lets customers of IOUs purchase up to 100% of their electrical power from a remote solar power plant. The maximum project size is 20 megawatts, and 100 megawatts are being set aside for "the most impacted and disadvantaged communities" and "[a]reas disproportionately affected by environmental pollution." (Here's the full text of the Green Tariff Shared Renewables Program.)

AB 217: Expansion and continuation of low-income solar program. Slated to end in 2016 but now extended to 2021 are the Single-Family Affordable Solar Homes and Multi-Family Affordable Solar Housing (SASH and MASH) programs, worth a combined $108 million. The programs offer rebates and provide training in solar installation. According to the text of the law, "It is the goal of the state to install solar energy systems that have a generating capacity equivalent to 50 megawatts for low-income residential housing."

Energy Storage

Last month, the California PUC set terms of a mandate for an eye-popping 1.3 gigawatts of energy storage to support the state’s power grid by 2020. As reported by Jeff St. John, the decision "breaks new ground in seeking to establish a regulatory regime in which utilities, third-party storage providers, and even customer-owned storage assets can play an integrated role. Those include rules that would limit utilities from owning more than 50 percent of the total amount of energy storage to be procured across the three “grid domains” of transmission, distribution, and customer-located storage.

That decision comes in spite of requests from the state’s three investor-owned utilities -- Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric -- that they be able to control a larger share of the storage they would be required to connect to their grids.

“This is pretty significant, because they’re saying that utilities can even own assets behind the meter,” Janice Lin, executive director of the California Energy Storage Alliance (CESA), an industry group representing energy storage companies, said in an interview.

As with NEM, the California renewable experiment with mandated energy storage is going to be watched very carefully by other states.

For the deepest industry dive into U.S. solar markets and policy, make sure to attend GTM's annual US Solar Market Insight conference in San Diego in December.