A Look At California’s Modern Solar History

By Bernadette Del Chiaro, Solar Industry Magazine

As Solar Industry changes from print to online-only, I think about other changes to our industry over the years.

Not long ago, most of this did not exist. And, if we aren’t careful, if we don’t aggressively and collectively invest in public policy to support the continued growth of local solar and storage, much of it could be taken away. Yes, even in California.

Back in 2002, when I first started working on solar policy in Sacramento, most of the big names in the industry today were not even a glimmer in the entrepreneurial eye. There were some important players, of course – SunPower, AstroPower and PowerLight, to name a few, as well as many of the founding members of the California Solar Energy Industries Association (CALSEIA) that make up the backbone of the local solar industry.

The pioneers of the PV industry, who will gather one last time for the Third and Final Solar Pioneer Party in Mendocino County in November, started tinkering with PV and inventing the industry in the backwoods of northern California in the late ’70s. And for this, we are all forever grateful. But the engines of commerce that put solar into the hands of everyday California consumers did not get started in earnest until 2002.

In 2002, everything changed. In fact, that year marked the dawn of the modern era of the California solar industry. What happened in 2002 was that policymakers were spurred into action by the Enron-made electricity crisis of 2000/2001. Due solely to the criminal actions of manipulative and monopolistic energy companies, California businesses, consumers and cities lost billions of dollars, suffered great social and political upheaval (for example, Gov. Gray Davis lost his job), and voters were simultaneously angry and fearful that it could happen again – two powerful motivators of political action.

During this time, not only were voters and politicians motivated to make change, but also the utilities had yet to invent the concept of “cost shifting” – the notion that all local solar is an inherent burden on other ratepayers. Instead, the best arguments they had at the time were that solar was too expensive and unreliable.

What’s more, during this time, most policymakers understood that electricity, an increasingly critical commodity, was best generated and controlled locally (as opposed to in corporate board rooms of profit-minded companies) and that empowering citizens to own their own energy, creating competition in the marketplace, would help prevent future Enrons from repeating the sins of the past.

And so, California policymakers began a new era of embracing self-generation and alternative energy. Individuals, local governments, and businesses that invested in their own solar systems were heroes and warriors, “sticking it to the Enron-man,” and helping everyone avoid another blackout. These early adopters were not burdens on society, as utilities today like to characterize it. The California Public Utilities Commission (CPUC) even published a paper showing that for every dollar invested in local solar, three ratepayer dollars were saved in fuel costs alone. That’s a pretty good return on investment for the ratepayer. Environmental groups, including my organization at the time, Environment California, saw opportunity to make California a solar leader, pushing for big, concrete policy ideas.

Thus, in the four years that followed the electricity crisis, California passed several landmark bills, including the first renewable portfolio standard (S.B.1078), set at 20% by 2017, and the first comprehensive local solar policy (S.B.1), also known as the Million Solar Roofs Initiative, expanding net metering and solidifying a 10-year, $3 billion incentive program. (The first legislation authorizing Community Choice Aggregation was also passed during this post-Enron era via A.B.117 by Assemblymember Carole Migden, and in 2007 – riding the heels of this momentum – we were able to pass A.B.1470 by now-U.S. Rep. Jared Huffman to give continued life to the solar heating and cooling industry.)

It is hard to imagine today, but at the time of the electricity crisis, there were only 20 MW of local solar electric systems on roughly 6,000 rooftops, as well as only one or two experimental solar thermal plants in the desert. Daniel Sullivan of Sullivan Solar Power was a journeyman electrician down in San Diego pitching solar to his employers at the time, but they didn’t want to touch it, and Elon Musk had only just become a U.S. citizen. So much has changed.

Motivated by economics and energy independence, consumers doubled their consumption of local solar year over year, and by 2006, when S.B.1 passed, there was roughly 300 MW installed. By the beginning of 2008, when Solar Industry published its first print edition, local solar had become a 500 MW market with a healthy growth trajectory, thanks to the certainty provided by state and federal policy, including the investment tax credit, as well as a promising international market. 

Did everyone in the solar industry like the idea of creating a 10-year-long incentive program via S.B.1? No! There was, in fact, dissent among industry players. Some wanted to simply let the market grow slowly so as to not invite too much competition. Some thought growth-oriented international markets would lower hardware and installation costs here in California without any further intervention at the local level. Some simply didn’t like government involvement at all.   

And then there were the real opponents to the idea and to solar and storage, in general: the utilities and their local International Brotherhood of Electrical Workers (IBEW) union. Packing the same one-two punch that this duo wields today, this unified force single-handedly killed S.B.1’s predecessor two years in a row. These powerful defeats were not due to clever arguments against solar, but rather sheer political might.

At midnight on the last day of the 2005 legislative session, frustrated and exhausted from nine months of campaigning, I was quoted in the media as saying, “Not air pollution, nor blackouts, nor soaring energy costs were enough to elevate the Million Solar Roofs bill above the politics of the day.” Sound familiar?  Just replace “air pollution” with “climate change” and “blackouts” with “Aliso Canyon,” and you have a ready-made quote for the energy storage bills that failed to, in the case of S.B.700, even get a hearing in the state assembly this year.

In fact, back in 2005, there was such stalemate in Sacramento that then-Gov. Arnold Schwarzenegger had to circumvent those intractable politics and direct the CPUC to create the multibillion-dollar incentive program on its own.

After this move, legislation was still needed to expand net metering, mandate similar programs at the publicly owned utilities, and jump-start solar on new home construction, but the most controversial part of the bill – the money – was defanged by the CPUC pre-emptive action, and S.B.1 sailed to the governor’s desk relatively easily in 2006, the same year A.B.32, the well-known climate change law, passed.

Interestingly, despite all of the excitement over solar energy, it took another six years for the utility-scale solar market to catch up and surpass the local solar market. In 2013 – two years after the state passed its third iteration of the renewable portfolio standard, upping the mandate to 33% by 2020 – California saw utility-procured solar go from 500 MW to 3,000 MW nearly overnight.

Today, California policymakers still hold the key to the solar industry’s future. A few short years from now, thanks to changing time-of-use (TOU) rate structures and net metering successor programs, it will be nearly impossible to install a solar electric system without an accompanying energy storage device. Yet, the number of storage devices sold in California today matches that of the solar market circa 2004. We have a long way to go on storage to marry it with solar cost-effectively for a mainstream market.

This fact bears repeating: Local energy storage today is where solar was in 2004. We have a long way to go.

A critical question we must ask ourselves now is whether the solar and storage industry, in just a few short years, will be able to lower prices, achieve economies of scale in both production and installation, and realize the same hand-over-fist growth that solar enjoyed during the previous decade without something akin to S.B.1 for storage. History would suggest certainty and market rules are needed. And, besides, that’s a lot to gamble.

Let’s be honest with ourselves. It isn’t hard to envision growth when the storage market is a mere 100 MW per year. But expecting continued and sustainable growth, free of damaging fits and starts and commensurate with what California has come to expect of its solar market? That seems like a heavier lift than a market based on “preppers,” “techies,” and C&I demand charge arbitrageurs can sustain.   

The fact is that California’s solar market grew from 500 MW to 5,000 MW in 10 years. It was built on a consumer base (650,000 strong) much deeper and broader than blackout- and demand-charge-triage seekers. My favorite fact and a testament to the maturity of the market is that there are twice as many people with a solar system in oil-rich and conservative Bakersfield than in liberal, tech- and eco-friendly San Francisco. And, although we are not yet at a million solar roofs (let’s hurry up and get there, already!), we are on pace to surpass three-quarters of a million consumers with their own solar systems, totaling nearly 7 GW, in the next 12 months. None of this would have happened without clear, intentional, long-term public policy initiatives.

And what about our opponents? Well, some things never change. The utilities and their affiliated IBEW locals are once again leading the anti-local storage charge, claiming that they can do a better job building California’s modern electricity infrastructure and should, in fact, own and install everything through legislative fiat. Earlier this year, they killed S.B.700 and A.B.1030 – bills that would have guaranteed California could build a mainstream local storage market, thereby addressing the duck curve and giving consumers TOU rate relief.

As I write this article, CALSEIA is preparing to celebrate 40 years of service to this industry. What the next 40 years have in store is anyone’s guess, but this brief era of consumer-driven local solar is but a blip in our collective energy history. Nothing should ever be taken for granted, especially in the dog-eat-dog world of energy markets and the special-interest-driven world of politics.

We’ve come a long way since 2002, and we have a long way to go to reach true market saturation. Congratulations to
Solar Industry for helping cover this journey over the past 10 years. Here’s to another decade of coverage of this industry, with all of its ups and downs, twists and turns. There is one thing that is certain: None of us would be doing this if the future didn’t look bright for solar and energy storage. 

Source: https://issues.solarindustrymag.com/article/look-californias-modern-solar-history

Californian Solar And Storage Workers Gather At State Capitol

By Joseph Bebon, Solar Industry Magazine

Approximately 150 solar and energy storage workers from 80 businesses across the state converged on the California state capitol on Tuesday, Aug. 29, to meet with their legislative representatives and urge continued support of local solar and energy storage policies. Organized by the California Solar Energy Industries Association (CALSEIA), the event was the 4th Annual Worker Day. The clean energy workers had a clear message: “Keep local solar and storage growing in California.”

“Our jobs require strong policies to ensure access to local solar and storage for all California consumers,” said Bernadette Del Chiaro, executive director of CALSEIA. “Local solar and energy storage businesses bring many benefits to the state including jobs that can’t be outsourced and an affordable and reliable pathway to 100 percent clean energy.”

The workers came to the capitol to educate legislators about the different forms of local solar and energy storage technologies including solar photovoltaic systems, solar thermal systems, and grid-tied batteries that help keep the sun shining at night. CALSEIA also honored California Assemblymember Jacqui Irwin, D-Thousand Oaks, with the 2017 Legislator of the Year Award for her work to promote local solar and storage.

Specific bills supported by the association included:

  • A.B.797 (Irwin) – to continue consumer incentives for solar thermal (hot water) systems that reduce natural gas use.
  • A.B.1414 (Friedman) – to extend and expand existing cap on permit fees for local solar systems.
  • S.B.700 (Wiener) – to create a multi-year consumer rebate program for energy storage. The bill stalled in July under opposition and will be taken back up in Assembly Utilities and Energy Committee again in 2018. CALSEIA notes an earlier backed bill, A.B.1030 (Ting), also faced opposition earlier in the year and was stopped by the same committee.

“I got up at 3:30 this morning to make sure my voice would be heard,” said Ricardo Armendarez, sales manager and system designer for AltSys Solar Inc., a Central Valley contractor based in Tulare, Calif. “I have come to believe running a business is only half of the work needed to create a successful industry. Engaging with our state legislators and making sure they understand the significance of their policy decisions is critical to the continued growth and maintenance of our businesses and the jobs we create.”

CALSEIA says the nearly 80 businesses that participated in the day’s event came from all over California from San Diego to Redding. These businesses and 150 workers are a diverse cross-section of the 100,000 jobs that solar and storage have created across California, according to the group.

Source: http://solarindustrymag.com/californian-solar-storage-workers-gather-state-capitol

Storage saves

Sustaining the market: As the leading solar state in America, California’s behind-the-meter solar markets are seeing challenges as they explore new terrain. CALSEIA’s Bernadette Del Chiaro explains how the industry is navigating these changes, and what to expect in the future.



California’s residential solar market obviously suffered during Q1. Can you talk about what you are seeing in Q2 and beyond in the residential sector, and what this says about the viability of the market under Net Metering 2.0?

Bernadette Del Chiaro: We definitely saw in Q1 – and it is looking like in Q2 as well – a slowdown in the residential market in California. At the same time as that, we saw an uptick in the C&I market. I think there are a couple of things happening, but ultimately, to answer your question directly: Distributed solar is absolutely viable under Net Metering 2.0, but we need to start pairing storage with every single solar system, and we need the policies in place to make that possible.

Otherwise we are concerned that the viability of the market under Net Metering (NEM) 3.0 isn’t going to be there. NEM 3.0 is going to be upon us before we know it, and it is critical that we get storage deployed. CALSEIA has prioritized spending the bulk of our time this year working on creating incentives to make storage available and affordable to all customers. Right now our storage market is really limited to one segment within the C&I sector, and completely dependent upon incentives. And that’s not sustainable. That’s just like how PV was 12 years ago before the California Solar Initiative.

Let me also just say that there are a variety of factors on the slowdown. I think NEM 2.0 had its effect. I think rate changes for residential – those had their effect – and those started as you remember back in 2015. But the rain was legitimately a factor: We had twice as many rainy days in the winter of 2017 as there were in 2016. When you have that many rainy days, it really does cut down on your ability to go out and install. And more importantly, it cuts down on your thought process about getting solar. When it is cloudy and rainy and cold, people don’t pick up the phone.

The third factor is that our sales folks had for years these built-in deadlines to sell against. One of them was expiration of the ITC, expiration of NEM 2.0 being the other. It was easier to sell a system when you had this built-in urgency. Because the residential solar market isn’t an absolute necessity for the consumer, you need built-in urgency to get people to jump. Without that, it makes it harder.

I think that played another role, and I think we will be able to start to sort that out. People will be able to figure out how to motivate consumers to jump and make the purchase or sign the contract within a more stable policy environment.

To get away from residential for a moment, the C&I market in California has grown, despite the fact that C&I installations are also under Net Metering 2.0. So what is going on here?

The C&I market is different because you have bigger projects – longer time lines. Going back to that previous thing about deadlines driving sales – that is a little bit less of a factor. You are going to spend six months to a year having a conversation with your customer anyway, so these annual deadlines don’t play as big of a role in motivating them to act.

The other is that they are a little more motivated by demand charges, and they have been on time-of-use rates (TOU) already. The economics of C&I solar installations are really strong – they’ve always been strong. The commercial market has just not suffered those same blows.

I think a residential homeowner hears in the press that solar is under attack and hears about these changes in net metering and thinks, “I’ll wait a while.” A C&I decision maker is going to be a little less influenced by daily media, and is going to be more influenced by the one-on-one conversation and thinking about the bottom line.

That being said, even though the C&I sector has been under time-of-use already, the changes to TOU rates that are unknown right now are going to have a big impact on the C&I market – and already are. I think we are going to be seeing some dips in the latter half of this year. It’s just a delayed response but for different reasons.

That’s the next thing that I want to talk with you about. Obviously the move to TOU rates for residential customers is a huge component of NM 2.0. Another issue is that they are changing. Can you talk about what the current state is of the negotiations over TOU rates, and what this looks like for the market?

TOU is critical. We have been working a lot on this issue. We are basically going to see a massive shift towards evening peak pricing. And everyone who has a solar system is going to move in that direction.

There is some grandfathering for existing customers, but the California regulators are eager to move as many people as they can in that direction.

What remains to be seen is what the differential is, and the price differential between peak and non-peak, and how dramatic in the early stages that is. And we hope that regulators understand that this needs to be a gentle transition.

But going back to C&I, the uncertainty there about what those rates are going to be is causing problems. And even with a solar paired with storage project it is holding people up from making decisions right now.

The California solar industry doesn’t have a problem with TOU rates per se. The key is having the transition be smooth and gentle, and making sure that as we let our foot off of one pedal, we are pushing down on storage. That is the key to giving consumers a tool to manage under a true TOU pricing structure.

If the California regulators and policymakers don’t give consumers that tool, there is going to be a major backlash from consumers when they realize that they are paying three times the price when they get home, and find that they have no way to truly lower their energy usage.

California has been interesting as a place where high levels of renewable energy have been deployed and the grid operator has to grapple with these high levels. We are already seeing curtailment and negative prices. At what point do these integration issues begin to affect the distributed solar market?

It’s already hitting the distributed generation (DG) market. Embedded in NEM 2.0 is the challenge of all of the large-scale solar, and what impact that is having on the grid, and the value of behind-the-meter. That is already a natural tension there, and already impacting the value of DG in Public Utility Commission (PUC) proceedings and deliberations on this, and it will be a factor in NEM 3.0.

At the end of the day, if we get storage deployed in a way in which everyone in the marketplace can participate with storage, and we continue on our path to electrify the transportation sector, and we really bring the grid into the 21st century and truly embrace the internet of things, there is more than enough need for all forms of renewable energy. But it all hinges so much on getting storage right.

Source: https://pv-magazine-usa.com/2017/08/29/storage-saves/

Solar Groups Denounce California Regulator’s Rate Case Decision

By Joseph Bebon, Solar Industry

On Thursday, the California Public Utilities Commission (CPUC) voted unanimously to approve a decision in San Diego Gas & Electric’s (SDG&E) general rate case after revising the proposed decision earlier this month. The California Solar Energy Industries Association (CALSEIA) and the Solar Energy Industries Association (SEIA) both criticized the decision as unsupported by the facts in the case, inconsistent with the state’s policies, and detrimental to solar customers.

As the solar groups explain, the vote is the first in a series of changes to time-of-use (TOU) rates set to take place statewide over the next two years. Under TOU, rates are higher at periods of peak demand and lower off-peak. Experience in California and elsewhere has shown that customers can understand TOU rates and can in ways the benefit the grid, such as by waiting to run the dishwasher until the off-peak period. The solar groups say these rates are important for sending customers accurate incentives to reduce energy when the grid is most strained, and TOU rates also impact the economics of customers’ rooftop solar systems.

According to the solar groups, utilities in California are proposing to move the highest-priced “peak” periods into the evening (4-9 p.m. or 5-10 p.m.) from today’s afternoon (e.g., noon-6 p.m.) peak. Some utility proposals would create super off-peak rates in the middle of the day in spring months, ostensibly to help manage spring hydro runoff and abundant solar production. However, the groups say lower rates in the daytime would reduce the relative benefit of going solar.

The groups say the San Diego decision adopts a 4-9 p.m. on peak for vague “policy reasons” despite the judge in the case originally proposing an earlier period based on the commission’s TOU methodology, which was established this January.

“The commission spent more than a year examining how to develop time-of-use rates, for the very purpose of ensuring that this once-in-a-generation change to new periods was based on facts,” says Brandon Smithwood, director of California state affairs at SEIA. “Earlier time periods would also help reduce consumption during hours of declining solar generation when the California system operator (CAISO) needs to ramp up gas plants to meet energy needs.”

Solar parties expect a more thorough analysis of data in the forthcoming TOU decisions Southern California Edison and Pacific Gas & Electric. According to the solar groups, the commission may have to move SDG&E’s TOU periods earlier in the day once it follows the methodology in its next rate case when the utility’s application must take all of the required data into account. The next general rate case for SDG&E will be filed next year and decided less than three years from now.

“The commission has decided not to apply its new TOU methodology in this rate case,” says Brad Heavner, policy director for CALSEIA. “It is shocking that the commission purposefully avoided considering data that was solidly on the record.”

According to the groups, the decision dampens a market already depressed by uncertainty about the changing TOU periods. A decision earlier this year set a deadline of July 31 for most new solar projects to connect under the old TOU periods. Projects under development and new project development have slowed dramatically. Both CALSEIA and SEIA say they are seeking a change to the “grandfathering” rules so that project development can continue as rate cases are decided. The decision extends the deadline for schools to August 2018.

Source: http://solarindustrymag.com/solar-groups-denounce-california-regulators-rate-case-decision