When Communities Choose Their Energy, They Get a Better Deal

Jigar Shah and Russ Hancock say community choice energy programs are being developed in 80 California communities.

Jigar Shah, Russ Hancock March 01, 2016

Jigar Shah

Jigar Shah is the President and Co-Founder of Generate Capital. Jigar was the founder and CEO of SunEdison (NASDAQ: SUNE, TERP), where he pioneered “no money down solar” and unlocked a multi-billion-dollar solar market, creating the largest solar services company worldwide. He is the author of Creating Climate Wealth: Unlocking the Impact Economy. After SunEdison, Jigar served as the founding CEO of the Carbon War Room, a global non-profit founded by Sir Richard Branson and Virgin Unite to help entrepreneurs address climate change. Generate Capital, the Carbon War Room and SunEdison all follow from Jigar’s vision that business model innovation will unlock the largest wealth creation opportunity – resource efficiency. Jigar is committed to helping entrepreneurs and large companies alike implement resource efficiency solutions using “pay as you save” project finance models. Jigar holds an MBA from The University of Maryland and BS in Mechanical Engineering from the University of Illinois, Champaign-Urbana. He sits on the boards of sPower and the Rocky Mountain Institute. Jigar lives in New York City and is trying to find the perfect cocktail.

Silicon Valley continues to lead the nation in the transition to a clean energy economy. In addition to driving innovation at some of the world’s leading cleantech companies, residents and businesses in the region will soon be able to participate in community choice energy programs providing new energy offerings from clean and renewable sources.

The Silicon Valley Clean Energy Authority was formed to develop just such a program. This new community choice program will serve business and residential energy customers in the cities of Sunnyvale, Mountain View, Cupertino, Los Altos and Los Altos Hills, Campbell, Saratoga, Monte Sereno, Los Gatos, Morgan Hill and unincorporated Santa Clara County. And it isn’t the only one in formation. San Mateo County and San Francisco have plans to launch community choice programs in 2016. In addition, the San Jose City Council will be taking up the matter shortly. In total, community choice energy programs are currently at some stage of development across nearly 80 communities in California.

Community choice energy programs enable cities and counties to organize the tens of thousands of customers interested in buying renewable energy to negotiate lower rates with the electricity companies that produce that power, or to develop projects to provide energy locally. The results are a win-win for customers and the region: competitive (and often lower) electricity rates; increased choice and competition in the energy market; more local control over energy decisions; lower greenhouse gas emissions, cleaner air, and reduced dependence on damaging fossil fuels.

Marin Clean Energy and Sonoma Clean Power are community choice programs already operating in the area. While PG&E obtains 27 percent of its power from renewable energy sources, Marin Clean Energy offers consumers options for 50 percent or 100 percent renewable energy, at lower prices than the utility. Sonoma Clean Power offers consumers programs that are 37 percent or 100 percent carbon-free using a mix of sources like wind, solar, hydropower and geothermal.

These programs drive local economic development, too. Prior to the establishment of Sonoma Clean Power, about $200 million left the county in the form of payments from business, residents and governmental accounts to PG&E for electrical generation. Since its launch in 2014, Sonoma Clean Power has already achieved $50 million in direct customer savings, in addition to $35 million in spending shifted back to the county, a number that is expected to increase over time.

This is a time of tremendous innovation and change in the energy industry. Community choice provides both a new choice for consumers and a platform for utilizing energy technologies like rooftop solar, storage and grid services. The competition will be good for the generation market. At the same time, the programs' partnerships with existing utilities -- which will continue to do the billing, set up service, and maintain the grid -- provide the stability that the grid and the market need.

It will take robust public-private partnerships to bring together experts in finance, energy policy and technical innovation to accelerate deployment of underutilized technologies that are essential to ensure a smooth transition that benefits everyone involved, especially the customer. Community Choice can provide the competition and opportunity that will drive the market forward.

Distributed, renewable energy that offers consumer control and input isn’t just a future endeavor. It’s already benefiting California communities all across the state and developing innovative solutions for how we generate and use energy. So if your city council is not discussing how to start one of these programs, it's time to contact them and ask why.

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Jigar Shah is a clean energy entrepreneur, Carbon War Room's first CEO, founder of SunEdison and author of Creating Climate Wealth: Unlocking the Impact Economy.

Russ Hancock is president and CEO of Joint Venture Silicon Valley. He will speak at a symposium on how to optimize community choice programs in San Jose in March.