California is on the cusp of a dramatic jump in deploying cost-saving, climate-solving technology in the form of customer-sited energy storage, but the industry needs help cutting red tape that keeps the cost of the technology unnecessarily high for customers.
Energy storage helps electricity customers and the electric grid in many ways: It reduces monthly bills; delivers grid services such as peak reduction, emergency backup and smoothing out the increasing share of renewable energy production; and it enables California to keep the lights on while reaching our clean energy goals.
The state has recently passed a number of policies that could deploy thousands of energy storage projects in the next several years, such as the Self-Generation Incentive Program, storage and renewable energy procurement targets for each of the investor-owned utilities (IOUs), and the AB 2868 authority given to IOUs to accelerate widespread deployment of energy storage.
But most California cities and counties -- less experienced with the new technology and the relevant codes and standards -- issue permits for energy storage projects in inconsistent processes with a broad range of permit fees.
Developers spend a great deal of time with repeated travel to deliver materials in person, to submit “wet stamps” on minor revisions of plans, and to complete reviews by unrelated agencies -- all of which drive up installation costs for the customer.
Moreover, local jurisdictions are largely unaware that the storage industry and fire protection professionals have collaborated on a comprehensive forthcoming 2018 standard for energy storage fire safety, the NFPA 855, as well as a wealth of product safety standards.
A new bill to clarify good permitting practices and to make permits and related fees more consistent was signed by Governor Jerry Brown September 30.
The fact that the bill, AB 546, passed unanimously with bipartisan support shows policymakers’ clear intent to give customers access to this valuable new technology and to arm cities and counties with clear information on how best to permit energy storage projects.
AB 546 will speed the process of siting storage by requiring application documents to be accessible online by 2019, requiring jurisdictions to accept electronic submissions, and making the processes and permit fees more consistent across jurisdictions.
In doing so, it could dramatically cut the costs associated with storage permitting. The bill relies on the California Office of Planning and Research and the State Fire Marshal to centrally educate cities and counties on the most recent codes and standards, best practices for permit review and potential factors for consideration in establishing fees.
When a city or county gains experience with storage permitting, it gradually reduces the currently disparate and confusing processes to only the most relevant steps and fees. Putting documents and steps online similarly speeds the process and cuts unnecessary costs. The state has achieved success with similar bills to streamline deployment of rooftop solar and electric vehicle charging stations.
AB 546 helps Californians control their energy costs by smoothing the installation of customer-sited energy storage, which can be used to avoid costly peak energy and demand charges. These systems can even be aggregated into fleets to participate in utility demand response programs or in the wholesale energy market, helping the grid during heat waves or other times of grid stress.
Intelligent energy storage is growing increasingly attractive to customers, utilities and grid operators. Cities and counties will need a consistent, “best practices” approach as developers build hundreds to thousands of these projects. And the resulting best practices could themselves become a national model, leveraging California’s clean energy leadership.
AB 546 puts the state ahead of a fast-moving opportunity for the benefit of ratepayers. We applaud the legislature’s and governor’s action to help deploy climate-solving technologies more efficiently and at a lower cost without sacrificing important safety reviews.
Assemblymember David Chiu represents California’s 17th Assembly District of San Francisco, is Chair of the Assembly Housing and Community Development Committee and authored AB 546. Janice Lin is the founder of the California Energy Storage Alliance, and Polly Shaw is vice president of regulatory affairs and communications at Stem, Inc.