Community Solar

CPUC sides with PG&E on community solar, and the renewable energy industry isn’t pleased

CPUC sides with PG&E on community solar, and the renewable energy industry isn’t pleased
(The Big Beau solar and storage project in California. Photo: Masdar)

Community solar probably isn’t going to survive in California.

On Thursday, the California Public Utilities Commission (CPUC) voted on changes to its customer renewable energy subscription programs, known as Green Access Program tariffs. In a 3-1 decision, CPUC voted in favor of modifications to its community solar program that industry groups and developers are calling “shocking” and “disappointing” developments that “threaten to unravel California’s clean energy progress.”

In late 2022, California passed the original version of the bill (AB 2316) proposed by Assemblymember Ward, which directed at least 51% of subscribers of a community solar program should be low-income customers, triggering at least a 40% federal tax credit on solar installations under the Inflation Reduction Act. It also required paying prevailing wages, capitalizing on a separate 30% federal tax credit for storage installations under the IRA. The bill garnered support from the Coalition for Community Solar Access (CCSA), Solar Industries Energy Association (SEIA), Vote Solar, and other influential groups, but not California’s investor-owned utilities.

Then in March, CPUC issued a proposed decision rejecting the plan, instead approving a utility-backed alternative from Pacific Gas & Electric. In it, CPUC argues 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.

This week’s vote actualizes the changes laid out in the proposed decision. Part of its summary reads:

“As described herein, while the current Green Access Program tariff options do not meet all the evaluation goals described in AB 2316, the California Public Utilities Commission (Commission) finds it efficient — in terms of costs and resources — to modify and streamline existing Green Access Program tariffs to better meet these goals. Further, the Commission finds that it is beneficial to ratepayers to adopt a community renewable energy program by layering a customer subscription model and a non-ratepayer-funded adder onto identified standard supply-side tariffs and contract mechanisms that meet the requirements of AB 2316 and Pub. Util. Code Section 769.3.”

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The renewable energy industry swiftly reacted to CPUC’s latest decision, which some believe signals the end of a viable community solar program in the state.

“Today’s Commission vote ignored the will of the California Legislature and the broad coalition of ratepayer, equity, environmental, labor, agricultural, and business groups who have demanded a functional community solar program for more than a decade,” said Derek Chernow, Western Regional Director for the Coalition for Community Solar Access (CCSA). “By accepting the utilities’ proposal, the Commission has chosen to double down on failed programs that have not — and will not — establish a viable community solar market that would provide affordable energy to Californians that need relief the most.”

“The CPUC is doing the bidding of monopoly utilities to block a functional community solar program in California,” contends Stephanie Doyle, California state affairs director for the Solar Energy Industries Association (SEIA). “This decision effectively shuts out the vast majority of low-income Californians, renters, and others that can’t install solar directly on their homes from participating in the clean energy economy.”

“Today’s vote ignores calls from the solar industry, environmental justice organizations, consumer advocates, and labor groups to create a workable program. It also puts into question the status of federal Solar for All funding, which is solely dedicated to expanding solar accessibility. This is a shocking decision from a Commission that is charged with protecting ratepayers and keeping electricity bills affordable,” Doyle added. “The CPUC’s recent series of decisions threatens to unravel California’s clean energy progress. It’s past time for Governor Newsom and state leaders to reign in the commission before it inflicts more damage on customers and the state’s clean energy economy.”

“We are gratified that the CPUC removed the original Proposed Decision’s incorrect conclusion that the NVBT proposal would have violated Federal law,” said community solar management company Ampion’s VP of law and regulatory Chris Kallaher. “However, we remain disappointed that the Commission has not taken this opportunity to create a robust and enduring community solar program. We continue to believe that such a program would benefit all Californians, subscribers and non-subscribers alike, by taking advantage of a model that has resulted in the successful development of thousands of megawatts of new solar capacity in many other states. We hope that California does not abandon the community solar concept, and we will support continued efforts by the CCSA, SEIA, and others to achieve the kind of legislative and regulatory changes that would establish such a program in California.”

“As a community solar developer based in California and operating across 15 states, it’s clear that the California Public Utilities Commission’s final decision will not make California a leader in community solar,” argues Aaron Halimi, founder and president of Renewable Properties. “With this misguided decision, it is highly improbable that the industry will invest in building community solar and energy storage projects in California. The CPUC’s decision primarily benefits the financial interests of utilities and does not support the State’s climate goals or the aim of reducing electric bills for low-income Californians, which was the purpose of AB 2316.”

CPUC argues the “improvements” to its existing community solar programs and the launch of a new community renewable energy program will “allow Californians to capture millions of dollars in state and federal funding, including the Solar For All grant recently awarded to California.” CPUC emphasized several key components of the decision:

Disadvantaged Community Green Tariff Program

  • Expanded from 60 MWs to up to 144 MWs
  • Expanded geographic boundaries of a disadvantaged community to allow for more eligibility for low-income customers

Green Tariff Program

  • Enhances the existing program available to commercial and residential customers
  • Improvements will stabilize the charges or credits for the program and align it with other clean energy procurement efforts
  • Allows battery storage to be paired with solar projects and creates a pathway for potential expansion

New Community Renewable Energy Program

  • Available for customers of all income levels and commercial customers
  • 51% of each project’s program capacity is dedicated to low-income subscribers
  • Community choice aggregators are allowed to participate in the program
  • Sets amount of compensation for solar exports to the grid at costs avoided by each project, with additional compensation and customer subsidies from state and federal funding that does not add costs to electricity bills.

CPUC says a ruling in this proceeding will be issued shortly to collect feedback from parties on the development of the details of the community renewable energy program, including additional compensation for projects from state and federal funds.

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