California state regulators gave Pacific Gas and Electric (PG&E) the green light last week for a voluntary program that will allow customers to get up to 100 percent of their energy from solar by paying a monthly surcharge.
The program, expected to roll out by the end of the year, will allow PG&E to procure solar from small and medium-sized solar projects (0.5 megawatts to 20 megawatts) located within its service area. Participating residential and commercial customers can sign up to get 50 percent or 100 percent of the electricity they use from solar power for an estimated premium of 2 cents to 3 cents per kilowatt-hour. About 25 percent of PG&E's current power mix comes from renewables.
PG&E applied for approval of the "green option" in 2012, shortly after closing its ClimateSmart program, a utility program that allowed customers to voluntarily reduce their energy-related greenhouse gas emissions.
“This is really about empowering customers who want make a statement with their consumption choices about the environment and climate to be able to do that,” said Molly Hoyt, principal project manager at PG&E, in an interview. “That’s huge for our customers. Regardless of how many [decide to] take up this option, knowing that they can is important.”
All new demand will result in incremental new solar power that would not have been put on the grid otherwise, and will not be counted toward PG&E’s renewable portfolio standard obligation.
The California Public Utilities Commission (CPUC) requested that PG&E seed the market with some procurement in advance of customer enrollment. To meet initial demand, PG&E will assign customers solar energy generation from their existing assets -- and no longer count them toward the RPS.
PG&E will issue solicitations from third parties to build new solar projects once the total hits 30 megawatts of incremental demand or for total new demand by the end of the calendar year, whichever comes first.
“The program will put...additional demand on the market for the solar development community, so generally they’re pleased,” said Hoyt.
While structured differently than a traditional community solar program, PG&E’s green option is being labeled community solar because it’s similarly aggregating demand and supplying it through local solar systems. Community options are intended to expand access to solar power for renters, homeowners with shaded roofs, and those who choose not to install an array on their roof for financial or other reasons.
Since participants don’t own the solar project, they don't qualify for net metering. They pay only for the solar energy they use, as well as any program-related costs. Participants also get a credit for the standard generation that is being avoided, which could produce savings down the road.
“What we anticipate to be a premium in the range of 2 cents to 3 cents per kilowatt-hour at the outset of the program is likely to fall over time as the price of solar drops in relation to the costs associated with our standard generation mix,” said Hoyt.
The rates are structured so that non-participants aren't charged anything for the program, she added.
Under a separate program, PG&E will offer a more traditional community solar option whereby customers will be able to contract directly with a third-party developer for a share of the output of a local solar project. However, the CPUC has yet to finalize the rules for these types of projects.
In other recent community solar news, NRG Renew is partnering with SunShare, a leading community solar company, to finance and build 10 megawatts of community solar projects along the Front Range region of Colorado. The initiative will more than double NRG’s existing community solar portfolio once completed in mid-2015.
In December, First Solar teamed up with Colorado-based CEC to develop and market community solar projects to residential and commercial customers. And last month, Florida Power & Light Company unveiled plans to build 225 megawatts of large-scale PV capacity in the Sunshine State over the next two years, which will include a handful of smaller community solar plants.
The Department of Energy is also supporting growth in the community solar market through a recent $59 million investment in solar energy innovation.