As part of the Department of Public Works’ City Solar Project, solar canopies were recently installed on top of the two parking structures at the Long Beach Airport. City officials, partners and staff celebrated the completion of the sustainable project on Monday, April 22. (Photo by Christina Merino, Press-Telegram/SCNG)
California‘s utility regulator adopted new rules for community solar projects, despite warnings from clean energy advocates that the move will actually undermine efforts to expand solar options for low-income customers.
The state’s largest utilities advocated for the new rules.
Community solar projects are generally small-scale local solar panels that can serve renters and homeowners who cannot afford to install their own rooftop solar panels. They are a part of the state’s overall strategy to eventually run the electric grid entirely on renewable energy.
The California Public Utilities Commission’s 3-1 ruling preserves and expands programs that will allow any ratepayer to sign up for a pool of projects and receive a 20% rate reduction, said Commission Chairwoman Alice Reynolds. But it also reduces future compensation for solar providers and residents.
The commission calculates the benefits derived from small-scale distributed solar energy projects, which provide a “service” by sending clean energy to the electric grid and reducing transmission costs by serving nearby communities. Solar developers are compensated for the value of the benefit their project provides.
The formula adopted today essentially reduces the value of small-scale distributed renewable energy in the future, providing fewer incentives for the construction of new community solar projects.
In the short term, subsidies and incentives that help promote community solar installation will remain in place, funded by a recent $250 million grant California received under the federal Solar for All program.
One of the concerns of solar energy advocates is what will happen after the funding pool runs out and the financial incentive to develop solar energy evaporates.
“The foundation of a sustainable program should not be built with one-time money,” said Derek Chernow, western regional director of the Coalition for Community Solar Access.
While California has been a leader in promoting solar energy and advocating for a carbon-free electric grid, the state’s efforts to encourage smaller solar projects have been lackluster. One example of a missed opportunity that critics point to is not requiring community solar projects to have battery storage systems that allow power to flow after sunset.
“We’re not done today,” Reynolds said, adding that the programs can be modified and improved in the future.
With electricity bills rising for many Californians, he also criticized the impact of “cost shifting,” the idea that subsidies provided to community solar projects are costs borne by all ratepayers. It is a fundamental fairness argument that the commission has applied in other proceedings to justify reducing subsidies.
But changing or reducing subsidies and other incentives to a still-mature industry, advocates argue, will result in fewer solar installations, ultimately excluding low-income ratepayers from the benefit of renewable energy. Community access solar programs are supposed to ensure that at least 51% of the energy derived from the projects serves disadvantaged customers.
Late last year, the commission reviewed incentives for owners of apartment buildings, schools and businesses that install solar panels. Those regulations were another in a series of recent decisions the commission made to reduce financial incentives for rooftop solar. In late 2022, the commission reduced payments to homeowners who sell excess energy from newly installed solar panels on single-family homes.
Advocates have complained about what they say is California’s lagging clean energy leadership and have criticized Gov. Gavin Newsom, who last week gave a keynote address at the Vatican Climate Summit, for failing to hold powerful companies accountable. state public service and oil companies.
The commission’s decision on community solar was quickly added to the list of what critics say is a troubling pattern of backsliding on critical renewable energy policies.
“The CPUC’s recent series of decisions threatens to derail California’s clean energy progress,” the Solar Energy Industries Association said in a statement. “It’s past time for Governor Newsom and state leaders to rein in the commission before it inflicts more damage on customers and the state’s clean energy economy.”
As it had in previous closely watched decisions, the commission heard from a host of organizations, including the solar industry and environmental justice groups, that advocated for programs that would expand access to clean energy and reduce energy bills.
There was little public comment during the morning hearing, but at least two state legislators expressed opposition to the proposal. Assemblyman Christopher Ward noted that the updated proposal had only been released this week and called it “fatally flawed.”
“This does not reflect the intent of the bill,” Ward, a San Diego Democrat, told commissioners, referring to legislation he authored that required the commission to review its rules. The unintended result of today’s decision, he said, would be to discourage new projects.
An aide to Sen. Josh Becker, D-Menlo Park, read a letter from the lawmaker saying experts doubt the policies will expand access to clean energy.
In extensive comments, Commissioner Darcie Houck outlined several concerns about the decision, including her view that it did not go far enough to benefit taxpayers in low-income communities. Much of the commissioner’s disagreement centered on provisions that she said will discourage the adoption of solar energy and will not allow for a “just and equitable energy transition.”
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