Burrito theory gives community solar extra salsa

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Soon it will be as easy to go solar in California as it is to buy a lunch-time burrito, according to some in the industry.

SB 843 was designed to bring solar to the masses, even those without rooftops or good credit and would bring a “monstrous” 1.4GW market overnight to California, Tom Price, director of policy and market strategies at CleanPath Ventures, told Solar Power International last month.

“The system could be frictionless to the point where if you were choosing solar power [it] could be the sort of thing you could do while waiting in line to get a burrito… that means it becomes a lifestyle choice that means the adoption rates go up because it's not this long-term financial obligation. I'm going to get solar power, because my friend's getting it too…”
Some 43% of people living in California rent their homes, a figure that rises to 65% in urban areas, he noted.

“Our current market is not a market, it's a niche market,” he said. “We can't sell our product even to people who want it. That's a market failure.”

SB 843 would have created a 2GW “shared solar” programme with a 2MW cap for customers with California's Investor Owned Utilities (IOUs). Wind, biomass, geothermal and small hydro were also part of that 2GW total, but it was thought that shared solar would take the lion's share.

Clean power kilowatt would be converted into transferable credits for customers who would otherwise have solar on their roofs.

Businesses, which largely lease property to take advantage of tax credits, also faced the same restrictions and limit access to solar for commercial properties, he said.

Ah, community solar. What better way to celebrate and share in the Californian dream… along with some real practical advantages that convert into hard currency even the Department of Energy recognizes: improved economies of scale, optimal project siting, increased public understanding of solar energy, generation of local jobs, opportunity to test new models of marketing, project financing and service delivery.

What's not to love? California has managed to become the largest US market by tapping only into 25% of an available market. Could there be much greater potential based on this “burrito” theory of availability?

Although the bill had the support of the Department of Defence and San Diego Gas & Electric, other IOUs were apparently not so keen on SB843's communal “free ride” on their transmission and distribution grid (T&D).

Connection charges for net-metered customers is a topic of hot debate that has been explored previously in this blog. However, SB843 only offsets energy, not T&D costs and other charges.

“That narrative really resonates with public policy makers,” said Price.

But what no one can agree on is what that charge should be – an especially tricky issue in California where retail sales of energy is decoupled, forcing the utilities to rely on investments in T&D.

Paul Spencer founded Clean Energy Collective in Carbondale, Colorado, three years ago specifically to target community developments.

“The US$20m question is what is that [T&D] charge? No one can ever determine that because it's a great known secret,” he said.

But SB 843 should have allayed utilities' fears, said Price.

“You have to pay utilities for the services they provide, full stop. They have to get paid for what they do otherwise they will go out of business,” he said.

“It is that narrative tension that we have had with them that has created a lot of challenges for us.”

Despite widespread industry and legislative support, SB 843 was killed off in August after last-minute lobbying by Pacific Gas & Electric and Southern California Edison.

California might be the largest market in the US thanks to its aggressive Renewable Portfolio Standard and the California Solar Initiative, but other states are coming through with some interesting policy developments in community solar.

The Colorado Community Solar Garden Act 2010 was passed in response to the state's Renewable Energy Standard which at 30% by 2020, is almost as aggressive as California's RPS.

Xcel Energy developed the legislation, which offers subsidies for up to 4.5MW this year. When Xcel opened the programme, it was full within 30 minutes and oversubscribed by three times the original 4.5MW.

Paul Spencer's Clean Energy Collective won 2.5MW of the 4.5MW and the remainder went to REC Solar to build four 500kW systems.

“[The act] was passed three years ago and first solar coming out the ground will be later this year,” said Spencer. “The big gap in between is essentially the PUC and Xcel and all the stakeholders agreeing what actually did the legislation mean and how was it going to work. You want to take as much of that thinking and process as possible from the legislators and regulators as possible.”

Meanwhile in Arizona, community solar customers can lock in the price they pay for electricity for 20 years, said Marc Romito, the manager of renewable energy resources at Tucson Electric Power.

“It's an opportunity for customers to hedge. They can say: We're immune to your rate increases on the power supply charges and we're immune to purchase power fuel adjuster mechanism when fuel prices spike. You don't really know what's going to happen with gas and coal nuclear and solar who knows?”

After this year's disappointment, Price is not going to give up on California any time soon. Shared solar has the potential to be as disruptive to the industry as the introduction of Power Purchase Agreements were 10 years ago, he said.

SB 843 will no doubt be hotly contested by PG&E and SCE when it is re-introduced to the assembly in January next year.

Price said that solar advocates need to make their voices heard more than ever, despite the risk of policy fatigue.

“More solar customers means more solar advocates. If the only people advocating for us despite the true believers who care about renewable energy are property owners that are high net worth and that have credit in their homes and have rooftop solar that's just a small percentage of the vast population of California and other states. The more advocates we have on our side, the more success we'll have advocating for policy.

“Policy is everything in this industry. It doesn't exist without policy. If people don't believe it's going to make a difference who is president you are not paying attention. If Mitt Romney is elected president it's very clear as Clinton said he supports coal, he supports carbon. This is a zero sum game, there are winners and losers.”

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