July 21st, 2011
Each investor-owned utility in California has developed a program designed to use distributed generation photovoltaics as wholesale generators. The approved programs total 1.1 GW over the next 4 years–an amount equivalent to the daytime output of 2 mid-sized coal plants. The first results are coming in–and are exciting. » Read the rest of this entry «
May 26th, 2011
The California Public Utilities Commission voted down proposals by PG&E that would have been a big step backward for solar customers. The two major victories were 1) the CPUC opted to maintain its 4 tier rate structure, wherein high usage customers are given a strong price signal to conserve electricity or invest in solar to offset the cost of high usage, and 2) PG&E will not be allowed to implement a fixed customer charge.
» Read the rest of this entry «
July 27th, 2010
FERC may have recently put the kibosh on states implementing European-style Feed-in Tariffs for the moment, but that doesn’t mean the U.S. is left high and dry without ways to drive wholesale solar markets. We’re seeing daily action from utility PV programs that play by FERC’s rules.
Just today, Southern California Edison announced 60 MW worth of contracts under its new wholesale distributed generation (WDG) program. These winning bids will be installed on 31 rooftops and five ground-mounted sites across SCE’s service territory and deliver clean, reliable, wholesale power to the grid (as opposed to meeting on-site load).This is the first traunch of contracts for the utility’s 500 MW distributed solar program – half of which the utility will own and half of which must be contracted like this through independent producers.
As you may recall, SCE proposed the program as a mechanism for meeting its RPS requirements. The RPS may have set the end-goal of 20% by 2010 (with efforts still underway to increase to 33% by 2020), but it was the utility that opted to develop distributed solar to meet part of that requirement – a departure from the previously exclusive focus on large-scale projects in the 10 – 500 MW range. SCE’s move into WDG is significant for a few reasons:
- It was a clear example of utilities recognizing the value of power being generated within the distribution network – a solid case for developing more rooftop solar.
- It opened up a new type of solar development – adding to a nice robust wholesale policy framework that supports diverse market participation (large-scale and distributed systems, utility-ownership and independent industry alike). That’s in addition to the state’s retail program that encourages customers meet their own electricity needs with solar (CSI plus net metering). We think all that diversity of opportunity’s a good thing for building a resilient solar market and lowering solar costs for everyone.
- The program used a competitive solicitation process rather than a fixed standard contract offer – a policy approach designed to ensure projects get built at the best cost to ratepayers. Today’s announcement validates the competitive auction mechanism that we’re also seeing arise in the utility’s RPS procurement more broadly and in the CPUC’s to-be-launched twist on the Feed-in Tariff (because the incentive model doesn’t set a wholesale price, it’s another innovative way states can support wholesale solar development without stepping on FERC’s jurisdictional toes).
Northern California’s PG&E has a similar program in the works, so expect to see more WDG on the way.
June 22nd, 2010
In the California Public Utilities Commission proceeding to set a net-excess generation compensation rate pursuant to AB 920, Vote Solar co-filed with the Solar Alliance.
Workpapers showing calculations of the rates for each IOU can be found here (each are Excel files of approx 6 MB):
The record of all filings can be found here.
June 7th, 2010
What do the SF Chronicle, the LA Times, the Sacramento Bee, and the San Diego Union Tribune have in common with this blog?
All are not fans of Prop. 16, a California ballot initiative that would, in the words of the official analysis, place “new voter approval requirements on local governments before they can use ‘public funds’—defined broadly in the measure to include tax revenues, various forms of debt, and ratepayer funds—to start up electricity service, expand electricity service into a new territory, or implement a CCA.”
Public power may or may not be more renewable-friendly–for every Sacramento Municipal Utilities District, famously solar-centric, there’s a Los Angeles Department of Water and Power, which currently has the dirtiest portfolio in the state.
But while we like the choice of taking energy issues to the ballot, we don’t believe it should be a requirement. And a 2/3 hurdle is punitively high.
Official proposition details here.
A list of opposition (and newspaper editorials) here.
May 3rd, 2010
More wholesale distributed generation: on April 22, the California Public Utilities Commission finally approved PG+E’s 500 MW solar program application.
The ruling can be found here (pdf).
Briefly, the utility gets to own 250 MW of PV generation over the next 4 years (they may use a combination of solicitations for turnkey projects, or contract for materials and services), and has to buy the equivalent amount from independent solar developers. This is very similar to the SCE program, except that this program targets systems 1-20 MW in size, and is expected to be mostly groundmount instead of rooftops. Think solar farms sited near substations.
The IPP portion will be competitively bid.
There’s a bit more regulatory work before this hits the street. There will be some advice letters, draft resolutions, resolutions, and plenty of opportunity for parties to comment to guide the implementation details.
In any event, this program joins the 500 MW SCE DG PV program (the first RFO just closed, and by all accounts, there was *robust* activity, the SCE standard offer program (140 MW this year), the SMUD 100 MW FIT, the upcoming SB 32 FIT expansion, increasing amounts of mid-sized PV projects coming in under the standard RPS solicitations, and, hopefully, the final resolution of the 1 GW market-based FIT that parties have been working on for about 2 years now.
We are seeing incredible activity in the wholesale distributed generation market segment in other states, as well. Arizona utilities are going gangbusters. And even in New York: the New York Power Authority was blown away by the response to their RFP for 100 MW of solar. There’s a huge appetite to sell: all that’s needed is a market to sell into…
April 30th, 2010
…and the California solar market is sending up some extraordinary green shoots.
Check out the recent California Solar Initiative activity:
As you see, rebate reservations for the California Solar Initiative have absolutely exploded in the past 2 months. Last month was a record with 54.5 MW. And this month blows it away, with about 92 MW to date.
Couple of things going on here, as far as I can tell.
- We are nearing some incentive level drops, with always induces people to get reservations in at the higher level
- The cash-grant-in-lieu of ITC program sunsets end of year, folks are scrambling to make sure they can use it
- Financing is finally freeing up
- As PV programs in Europe face some headwinds (see press around Spain and others), module mnfs are scrambling for market share, and pricing accordingly
- California PV developers are getting very good at low cost installations—the product of long-term, sustainable policy to build a local market and workforce
- This is what happens when solar gets cheap
We may see some of these reservations drop out if they didn’t get the higher incentives, but all in all, really an extraordinary growth story.
Note that this is all behind the meter stuff. There’s tons more activity going on in the wholesale side (SCE standard offer program maxed at 140 MW of PV, Sacramento Municipal Utilities District doing 100 MW of PV under 14 cent/kWh feed-in tariff, both PG+E and SCE with 500 MW wholesale PV programs approved and off to the races, etc).
But that’s another story.
January 27th, 2010
About a year ago, Pacific Gas and Electric asked regulators to approve a 500 MW distributed generation photovoltaic program. In their proposal, the utility would build 250 MW of solar installations over the next 5 years, with each individual project sized between 1-20 MW. In addition, the utility proposed to buy a further 250 MW from independent power producers, in the form of a standard offer contract–to be priced at the utility’s cost of development. PG&E estimated that their costs in the first year to be $295/MWh, levelized over 20 years, with time-of-delivery factors included.
On Tuesday, the CPUC released two proposed decisions in the matter, one from the Administrative Law Judge (here), and the other from CPUC President Peevey (here), the assigned commissioner in the matter. Both proposed decisions would approve the program, with modifications. One of the most important change is to essentially turn the PG&E pricing process on its head. Instead of receiving a fixed-price standard contract offer, power producers wishing to sell solar electricity to the utility must compete for contracts. And the utility doesn’t get a blank check to build projects either—it is only allowed guaranteed rate recovery up to the average cost of IPP projects. The proposed decisions argue that this is the best way of ensuring that projects get built at the best price to ratepayers.
The two proposed decisions differ on one significant point. ALJ Ebke’s proposed decision would limit allowable projects to between 3 and 20 MW. Her rationale is that SB 32, passed by the legislature last year, establishes a fixed-price standard-offer feed-in tariff for renewable projects 3 MW and under, and gaming on price would result if similar sized projects were allowed to forum-shop. Unfortunately, SB 32 is not immediately available—it requires the CPUC to conduct a ratesetting process that we expect will be long and contentious, and which may or may not end up at a price sufficient to deploy renewables. It is our belief that projects under 3 MW are somewhat of a sweet spot for solar development: large enough to achieve sufficient economies of scale to reach competitive price-points, but small enough to have a significant advantage in siting and permitting. President Peevey’s alternate proposed decision allows projects from 1-20 MW to participate, hinting that the decision may be revisited when SB 32 is implemented.
Next step: parties have opportunity to comment, then it goes before the Commission for a vote. With many of the details on the mechanics of implementation already negotiated or resolved through the process of considering a similar proposal by Southern California Edison earlier, once approved the program could be implemented relatively quickly.
In sum, we are looking at least 1 GW of utility-sponsored PV programs hitting the ground (and roofs) in the next 5 years. Still to be determined is LADWP’s program—the utility announced plans for a 1.2 GW program, but details remain murky. But make no mistake–wholesale distributed generation is the hottest thing moving in solar these days.
December 7th, 2009
You may remember that due to the failure to lift the cap on net metering in California, the DG solar market was facing potential disruption. See latest story here. Good news–we have a stay of execution. After … encouragement on the part of the Governor and the solar industry, PG&E (the utility in CA with the most solar, and thusly closest to the cap), filed an ‘Advice Letter’ with regulators to voluntarily lift the cap to 3.5%, pending resolution on a longer term solution:
PG&E believes an increase to the net energy metering cap to 3.5 percent will ensure that investment in the state of California for solar by homeowners and businesses is not slowed by any concern with the cap and would allow for sufficient time to work with the Governor, the Legislature, the California Public Utilities Commission (Commission) and others on the broader issues relating to net energy metering, including any cost shifts that place a greater burden on nonparticipating customers.
You can read the letter here (pdf). Today, the California Public Utilities Commission granted the request. This is good news, and good on PG&E for doing this.
Next steps: the CPUC is preparing a report (as mandated by SB 1), on the cost and benefits of net metering, and will deliver it to the Legislature by Jan 1, 2010. Then the fun begins again at the Legislature, as stakeholders discuss the aforementioned broader issues, etc, and work out a longer term solution for a sustainable solar industry.
The good times. They never cease.