California Moving Too Slowly On Customer-Sited Energy Storage

By Laura Gray, Solar Industry Magazine

 

It may surprise many around the country that California would reject a bill in the legislature to give long-term certainty to the energy storage market and to repeat the successes the state has had with solar. However, the Assembly Utilities and Energy Committee quietly killed a bill last week that would have created a program similar to the California Solar Initiative for customer-sited energy storage.

The storage businesses in the state would have had the opportunity to double-down on their investments and create more jobs and energy independence across the state. The bill, S.B.700, would have provided the runway that California businesses need to bring down storage prices and to eliminate the fits and starts that characterize the current market. Under pressure from utilities, the bill was tabled until next year without even a vote. Utilities see customer-sited storage as the next frontier in massive grid defection. But as we move toward electrification, storage is just another tool for consumers to control their energy use and to integrate more renewables on the grid.

The bill would have created up to a $1.4 billion extension to the current Self-Generation Incentive Program (SGIP) and would have given the industry long-term certainty to invest in storage in the state. The bill would have created a 10-year rebate program that declined in steps to zero, forcing businesses to bring down prices over time and get the industry off rebates.

The bill had passed the state Senate and was up for a vote in the Assembly Utilities and Energy Committee when it was pulled from the agenda. The unexpected coalition of supporters of nearly 100 businesses, environmental justice groups, trade associations low-income and housing advocates, state environmental groups and workforce development advocates all see the benefits of customer-sited storage, and we were pushing hard for a bill many thought wouldn’t even see the light of day after the first committee. Under the leadership of the bill’s author, State Sen. Scott Wiener, D-San Francisco, the bill gained momentum and was headed for a vote in committee when it was pulled from the agenda. Although many thought of this as a big lift and a “two-year bill,” our unique coalition nearly got the bill through in one year.

 

Bernadette Del Chiaro, executive director of CALSEIA, led a social media campaign during Intersolar North America’s opening ceremony last week as a final push before the legislative committee decided to let the energy storage bill die. Attendees held up pieces of paper saying, “Pass SB 700.”

 

SGIP has sparked a nascent industry of nearly 200 developers, installers, and manufacturers competing in this new space. These fledgling businesses need a longer runway to invest in technologies and practices that will bring prices down so that state rebates are no longer needed. Energy storage is key to our clean energy future, and the state should support the industry it has already created so that the benefits are felt across California.

The biggest benefit to customer-sited storage? Private investment is fueling the bulk of the industry. Ratepayers pay a small fee that provides rebates to storage projects, and the rest of the cost is shouldered by investors and customers. Private investment is fueling this distributed solution to our ramping and curtailment issues, allowing for more renewables on the grid and providing grid benefits, which saves money on expensive infrastructure upgrades. Ratepayers that don’t have storage on their homes or businesses benefit from the private investment made by customers who choose to invest in storage. Moreover, ratepayer investment, combined with declining rebates, will bring down the prices of storage overall, making the technology more affordable.

California is a leader in storage. But the state has much more work to do to become the international storage market leader that it is for solar and other clean energy firsts. Storage on the customer side of the meter can also provide unique ancillary grid benefits while managing demand-side load that can defer expensive transmission and distribution upgrades. If we do that all through utility procurement, we lose a competitive market and we put ratepayers on the hook to pay for big utility projects. Let me be clear: We need utility-scale storage to manage supply-side issues, among other important reasons. But we also need distributed resources to manage demand-side issues.

Californians want storage, and they are ready for it.


Laura Gray is the energy storage policy advisor at the California Solar Energy Industries Association. Gray also authored a broader article, titled “Massive Storage Development Needed In California,” in Solar Industry‘s July 2017 issue.

Source: http://solarindustrymag.com/california-moving-slowly-customer-sited-energy-storage

 

California energy storage incentive bill dies in committee

A last-ditch effort to pass SB 700 and create a long-term energy storage subsidy in California has failed, leaving the state without a plan for one portion of what it needs to meet increasingly ambitious renewable energy targets.

By Christian Roselund, PV Magazine

Among the states pushing the boundaries of the Energy Transition in the United States, California can make a strong case for being the leader. The state’s 50% by 2030 renewable energy mandate is not as ambitious as targets in Vermont and Hawaii, but given the sheer economic and geographic scale of the state, it is resulting in far more wind turbines and solar panels.

California gets the highest portion of electricity from solar of any state in the nation, but is already experiencing problems with negative pricing and curtailment, due to factors including high PV production during daytime hours and the 24/7 import of electricity and running of hydroelectric and nuclear power, even during periods of curtailment.

As a reaction to these realities, California has subjected all utility customers who participate in the state’s new Net Metering 2.0 policy to time-of-use rates, which are expected to increasingly weaken the economics of customer-sited solar.

The obvious answer to these circumstances, both at the macro level and the level of individual electricity customers, is energy storage. There’s just one problem: the economics of battery storage systems don’t yet pencil out, at least for residential customers. And while battery prices are falling from year-to-year, even a modest battery system can double the cost of a residential solar installation, well overwhelming any savings derived from time-of-use arbitrage under current rate proposals.

This week hopes for a long-term program to bridge the gap while energy storage costs fall were thwarted, at least temporarily. SB 700 aimed to create a system of incentives for energy to continue after the current funding dedicated to the Self Generation Incentive Program (SGIP) dries up, which could happen by the end of this year.

However, the bill failed to pass through the California Assembly Committee on Utilities and Energy, and after missing a deadline will not be considered. “It had a lot of opposition from the utilities, which would prefer to install and own all the storage themselves,” California Solar Energy Industries Association (CALSEIA) Executive Director Bernadette Del Chiaro told pv magazine.

This is despite an aggressive campaign by CALSEIA, which included an impromptu social media audience engagement exercise at the opening of the Intersolar North America trade show.

However, Del Chiaro says that while the bill may have been killed, that this is not the end. “The vehicle that is this piece of paper that has been called SB 700 has been stopped, but this broad coalition that we have built had not been stopped,” states Del Chiaro. She also notes that a bill to move California to a 100% renewable energy mandate is moving forward.

However, the devil may end up being in the details, as California will not be able to get anywhere near such an ambitious targets without massive deployment of batteries. “You need storage to do that,” says Del Chiaro, referring to the proposed 100% renewable energy target. “We just couldn’t get this committee to fully engage. Yet.”

Source: https://pv-magazine-usa.com/2017/07/14/california-energy-storage-incentive-bill-dies-in-committee/

Solar and political struggle: The view from Intersolar North America

Despite all the success of the U.S. solar industry, the 10th annual Intersolar North America launched on an activist tone, with policy struggles at both the state and national level. In many ways, the work of transforming our energy system is just beginning

By Christian Roselund, PV Magazine

Bernadette Del Chiaro's keynote address at Intersolar, Monday Jul.10.17

2017 is already a banner year for solar in the United States. Following on record levels of deployment in 2016, the solar industry has been hitting a series of new records, with utility-scale solar costs falling below $1 per watt, power purchase agreements being reported at under $0.03 per kilowatt-hours, and the leading state, California, getting 13% of its electricity from solar on an annual basis.

But at the same time that the solar industry is seeing these successes, there are new challenges. While the overall solar market continues to grow year-over-year, the national residential PV market declined in the first quarter of 2017, largely due to difficulties in California and the other largest markets. Some of this is due to political pushback, and the modifications to state-level implementation of the Public Utility Policies Act of 1978 (PURPA) are in some cases closing off new state markets.

This is to say nothing of the national political picture, where the Trump Administration has made moves to threaten renewable energy, including proposals to slash funding for support through the U.S. Department of Energy. But while Trump can’t stop the progress of solar, the challenges to integration of high levels of wind and solar are already showing in California, which is leading to new fights over not only solar, but the future of the grid.

As such, at the opening ceremony 10th anniversary of Intersolar North America in San Francisco, the mood is decidedly combative. MC and California Solar Energy Industries Association (CALSEIA) Executive Director Bernadette Del Chiaro started the event with a social media audience participation exercise to put pressure on the California Assembly to pass SB 700, which would spur the creation of $1.4 billion in consumer rebates for energy storage systems.

But as states such as California are grappling with what to do next, the divide between the actions of progressive states that are grappling with a changing grid and states that have turned their back on the Energy Transition are stark. 2017 Champion of Change Award Winner and New York State Energy Czar Richard Kauffman during his acceptance speech referenced a statement by early 20th century Supreme Court Justice Louis Brandeis, who described states as the “laboratories of democracy”.

“There are states that are going forward, and there are states that are going in another direction,” noted Kauffman. He could have been speaking of Indiana, which recently shut down its net metering program, or Montana, which has greatly weakened its implementation of PURPA.

To be sure, the movement of policy to adapt to the rapid changes in the grid is always a balancing act. “We can’t keep putting DG On the grid of Tesla and Westinghouse, that was not designed for distributed generation or intermittent sources,” noted Kauffman.

However, he also noted that due to the opportunities involved in transformation of the electric system, there will be rewards as well. “There are ample opportunities for the utilities to share in the savings,” Kauffman explained.

And even with all of the political and policy work needed, there is also a need for less confrontational roles within the industry. Keynote Speaker and former Federal Energy Regulatory Commission (FERC) Chair Jon Wellinghoff spoke of the “three i’s” – Information, Innovation and Integration.

“There are lots of winners if we do this right,” concluded Kauffman.

And ten years in at Intersolar North America, in many ways the work is just beginning, as the needs move beyond raw deployment to integration, and beyond solar to an entire clean energy ecosystem.

More on that tomorrow.

Source: https://pv-magazine-usa.com/2017/07/10/solar-and-political-struggle-the-view-from-intersolar-north-america/

California’s C&I solar sector thrown into chaos with TOU changes

California regulators are proposing to move C&I customers onto pending time-of-use rates starting on August 1 – despite a lack of clarity as to the details of those rates.


By Christian Roselund, PV Magazine

California has a few problems with timing. The state is in the process of setting new time-of-use (TOU) electric rates at its three large investor-owned utilities, which could have significant impacts on the economics of distributed solar installations under the state’s new net metering rules. And until these are finalized, solar customers and developers are in the dark.

This lack of clarity is a problem for residential solar customers, who will be forced onto mandatory TOU rates under Net Metering 2.0, which will be effective in the final of the three utilities as of July 1. But it is also a problem for commercial and industrial (C&I) PV system owners who were already on TOU rates, as these time periods that these rates will apply are set to change for the first time since the 1980s.

The cut-off date for grandfathering

Under a January ruling existing C&I systems will be grandfathered for 10 years under the previous TOU time periods. However, this week California Public Utilities Commission (CPUC) made moves to reject a petition by two solar industry groups – California Solar Energy Industries Association (CALSEIA) and the national Solar Energy Industries Association (SEIA) – to extend the date when new C&I PV systems will be grandfathered under the old rates.

The groups say their petition was an attempt to give more lead time to customers who are in the process of installing systems. “People have gone forward under certain assumptions,” CALSEIA Policy Director Brad Heavner told pv magazine. “A lot of customers are caught in the middle – moving forward with projects that aren’t going to be installed by (August 1).”

The Administrative Law Judge decision issued on Monday denies the SEIA/CALSEIA motion, but makes an exception for schools, which can complete interconnection by August 2018 and still be grandfathered under the old rates.

This ALJ decision is only the first step, and will now spur a round of comments before a proposed decision and then a final ruling. However if it goes forward under its current form, C&I PV systems that are not completed on August 1 will be subject to the new rates – despite installers and system owners not yet knowing what those rates will be.

The fight over the peak

The new TOU rates which have been proposed by utilities are themselves controversial. In response to a surfeit of mid-day power from California’s many PV systems, the state’s utilities are proposing moving “peak” periods back to as late at 5-10 PM. This would mean that solar PV would be generating in off-peak periods, and that PV systems owners would receive less for the electricity they generate than the electricity they use in the evening.

In SDG&E’s service area, which is the one utility service area which is moving toward resolution, the proposed decision is peak to set peak 3-9 PM. This translates to PV installations generating during only a portion of the peak.

According to CALSEIA, this is the first big change in TOU rates since the 1980’s, when peak was set at 12-6 PM. This timing was ideal for solar, but certainly not in line with recent changes to the composition of the state’s electric generation. And the change from 12-6 PM to 3-9 PM, let alone 5-10 PM, will have significant effects on the economics of solar.

Market impacts

A decision on SDG&E TOU rates is expected in July, and these rates will go into effect on December 1. However for PG&E and SCE final decisions on TOU rates are not anticipated until the first quarter of next year.

During this period of limbo, Heavner says that the uncertainty around TOU rates is affecting California’s solar market. “The markets are struggling right now, and the biggest reason is getting adjusted to the new outlook,” notes Heavner. “I’m hearing a lot of companies that specialize in commercial projects saying that business is slow.”

SEIA agrees. “The solar industry is committed to supporting California’s move to time-of-use rates, but we need to make sure there is continuity in the market,” Brandon Smithwood, SEIA’s director of California state affairs told pv magazine.

“This week’s ruling suggests that the vast majority of commercial customers won’t have clarity on time-of-use rates, a decision that prevents businesses who want to adopt solar from doing so, potentially leaving the state’s commercial market nearly frozen until next year.”

Source: https://pv-magazine-usa.com/2017/06/29/california-ci-solar-sector-thrown-into-chaos-with-tou-changes/