California reacts to CPUC proposal approving utility-backed solar plan over community solar

(Image by StockSnap from Pixabay)

The California Public Utilities Commission (CPUC) has issued a proposed decision that rejects a plan to bolster the state’s community solar market and instead approves a utility-backed alternative. Here are two pertinent pages from the order:

In late 2022, California passed AB 2316 (Ward), which directs that at least 51% of subscribers be low-income customers, triggering at least a 40% federal tax credit on solar installations under the federal Inflation Reduction Act. It also requires paying prevailing wages for workers, triggering a separate 30% federal tax credit for storage installations, also under the IRA. It also required CPUC to review existing customer renewable energy subscription programs.

However, in its proposal, CPUC says that while language about community solar programs was included in the preamble of AB 2316, “it is not listed as one of the specific evaluation goals outlined by the Legislature in Public Utility Code Section 769.3(b)(1).” Public Utility Code Section 769.3(b)(1) requires the Commission to “evaluate each customer renewable energy subscription program,” to determine “if the program meets all of the following goals”: (i) efficiently serves distinct customer groups; (ii) minimizes duplicative offerings; and (iii) promotes robust participation by low-income customers.

Parties have twenty days to submit comments on the proposed decision. After opening comments and replies have been submitted, a revised proposed decision will be issued and the Commission will vote on whether to adopt it by the Commission’s April 18 business meeting at the earliest.

Reaction to the widely anticipated decision has been rolling in throughout the day. You’ll find an updating collection below this fancy separator.

“This is a significant misstep in a string of head-scratching CPUC decisions that are crushing California’s clean energy progress and preventing thousands of households from accessing the benefits of solar energy,” said Stephanie Doyle, California State Affairs Director for the Solar Energy Industries Association (SEIA). “The state legislature made it clear in passing AB 2316 that it wants a robust program to provide community solar to low-income Californians and to support grid resilience for all ratepayers. This proposed decision, if adopted, will harm those efforts and risk California missing out on crucial federal funding by approving a utility-backed alternative that is unlikely to be commercially viable.”

“The solar and storage industry is shocked by the CPUC’s apparent determination to deny an opportunity to take a step forward as a community solar leader,” Doyle continued. “We continue to review the proposed decision and will keep working toward solutions that deliver the clean energy that Californians are demanding.”

“The proposed decision would not adopt the Coalition for Community Solar Access (CCSA) proposal, however, finding instead that the Net Value Billing Tariff (NVBT) proposal more closely resembles wholesale electricity procurement, rather than retail NEM tariffs, and thus does not comply with federal law (PURPA) as proposed (with compensation values based on the Avoided Cost Calculator),” wrote Stoel Rives, energy development partner at Lilly McKenna of San Francisco.

“To counter concerns that these contracts do not attract developer interest and could not offset prices for low-income customers, as required under AB 2316, the Commission (through the PD) proposes to develop an adder value that would be funded from the $33 million allocated under AB 102, and possibly further supplemented by funding opportunities from the California Infrastructure and Economic Development Bank.  These funding credits would only go to low-income customer-subscribers,” Rives added.

“The CPUC’s proposed decision represents a significant missed opportunity for solar development in the state,” said Katie Kavanaugh, Community Solar Acquisition Manager at DSD Renewables. “The Net Value Billing Tariff has the potential to position California as the largest community solar market in the nation, providing bill savings to low-income customers and other Californians unable to access other renewable resources and helping the state meet its ambitious clean energy goals. For these reasons, the NVBT has garnered extensive industry support which is why the CPUC’s proposed rejection of this program is so astounding. DSD strongly supports the NVBT as the mechanism through which low-income and other Californians unable to benefit from onsite solar will be able to access the cost savings and environmental benefits promised through the clean energy transition.”

“It is important that a community renewable energy program not impose a cost burden on nonparticipating ratepayers,” Kavanaugh added. “However, the CPUC’s proposed decision does not appropriately consider the value of distributed energy resources. One of the most exciting aspects of the NVBT is it would enable the development of substantial amounts of solar paired with energy storage, which would improve grid resilience and help the state address its costly peak demand periods in late summer afternoons and evenings. The CPUC’s proposed decision does not adequately address this. As it stands, the proposed decision issued by the CPUC represents a dangerous precedent that will undermine the growth of the clean energy industry both in the state and across the country. The CPUC must reconsider this proposed decision and issue solutions that will create a viable state-wide community solar program that will promote development and benefit residents for years to come.”