California is an undisputed clean energy juggernaut. Californians have developed the country’s most ambitious cap-and-trade program, own more electric cars than any other state, and have created 542,000 clean energy jobs.
They have created community-choice aggregators (CCAs) to accelerate the adoption of renewables. And the entire state affirmed its commitment to ending the climate crisis last year by adopting a 100 percent clean energy goal over the next quarter-century. Building on the net metering program by creating a value-based, transferrable credit for community solar projects is a way to fill a critical gap in the state’s clean energy leadership.
Despite the state’s tremendous progress, most Californians still can’t directly access the benefits of clean energy. In fact, 54 percent of Californians cannot access distributed solar because they don’t own their homes or buildings, with the majority being low- to moderate-income families, small and medium-sized businesses, nonprofits, schools and government agencies.
But it doesn’t have to be like this.
In a growing number of states, customers have an option to access community solar, or local solar facilities shared by multiple community subscribers who receive credit on their electricity bills for their share of the clean power produced.
In California, however, the community solar programs that exist are badly broken. Despite a community solar law being on the books for five years, not a single community solar project has been built. And we are concerned that new green-tariff based programs introduced by the California Public Utilities Commission and Southern California Edison contain many of the same flaws and will do little to meaningfully expand access. The effect is that the state is leaving out the millions of Californians who rent their homes or lease space for their business. This is particularly problematic in a state where affordable housing is a chronic and mushrooming crisis.
Community-choice aggregators, the emerging energy suppliers of choice in California, are securing new power-purchase agreements for clean energy projects. Having just emerged in the past decade, they are on the threshold of becoming the primary provider of power in California. Unfortunately, CCAs face challenges when it comes to getting clean energy projects — and the benefits they provide — into the communities they are intended to serve.
By only controlling the supply portion of a customer’s bill, the CCAs cannot give customers credit for the entire value a local project provides to the distribution and transmission grid. CCAs have invested their own funds to support a small number of local projects but those funds are limited, especially following CPUC's latest decision on the state’s departing load charge (PCIA). By contrast, the net metering program facilitates customer credits from the CCA and from the distribution utility, allowing customer-sited projects to thrive.
So why doesn’t California expand net metering to everyone?
The state’s experience with community solar, where there are zero projects and zero customers, stands in stark contrast to the nearly 900,000 customers with access to solar on their home, business, farm or affordable housing building through net metering, virtual net metering, and aggregated net metering. If someone can save money by putting solar on their roof, why can’t someone else access utility bill savings for their portion of a project across town?
The problem is artificial constraints on net metering. The NEM program, which has been successful by every metric, has barred customers from accessing the benefits of distributed solar offsite. Instead, the legislature and CPUC have created a separate menu of options for customers who can’t place a solar system on their property. The result is that many customers must pay a premium for utility green power or wait for the false promise of failed programs that are supposed to provide them options.
As the CPUC revisits net metering next year, utilities will argue that distributed solar brings no value to other customers, even as the state’s own grid operator, CAISO, cancels billions in transmission projects because of distributed solar.
Utilities will argue that distributed solar and storage can’t provide needed resiliency, even as prices plummet for batteries and solar-plus-storage can now keep the lights on for first responders, homeowners and businesses when the power goes out. They’ll say solar isn’t aligned with the grid, even as solar and batteries are empowering customers to respond to the time-of-use rates that encourage customers to consume when power is clean and conserve when it’s dirty.
Community solar can build on these successes. Projects can be sited in many locations and tailor their production to the needs of the grid. As a result, a net-metering-based community solar tariff can unlock a tremendous amount of opportunity.
For example, a CCA will be able to have more projects in in its region; communities historically burdened by pollution can take ownership over their own power sources; a business can subscribe to community solar providing clean energy options for their employees; a church can host a solar system that its parishioners can subscribe to; and diverse communities can come together to address the climate crisis.
Indeed, research done by GTM Research earlier this year shows community solar can serve nearly a million California customers by 2030, including over 500,000 low- and moderate-income households. This includes many of the new homes that will be built to meet the state’s housing crisis while achieving the recently adopted solar mandate in the state building code.
The community solar industry stands ready to break through the impasse and help develop a value-based credit for community solar generation when the state revisits net metering next year. If we build on the years of work the state has invested in transforming utility grid planning, we believe we can create a value-based credit for the full value community solar projects provide to the grid and allow for that value to be passed on to customers of CCAs or any company, nonprofit or organization that wants to save money and the planet through local clean energy. This concept is not new: As the white paper put forward earlier this year by the nonprofit Gridworks suggests, transferable credits can and should be part of NEM’s future.
It won’t be easy, and it won’t be fast, but it is the best path forward to create local clean energy access for all residents of the Golden State. The time is now to finally get solar to all Californians so everyone in the state can benefit from clean, local energy.
Brandon Smithwood is policy director of the Coalition for Community Solar Access.