Solar and Battery Storage Can Keep the Lights on Next Summer in California
At the end of July, Governor Gavin Newsom declared an energy emergency and directed his energy team to develop plans to prevent rolling blackouts during the summer of 2022. Vote Solar sprang into action and submitted to the California Public Utilities Commission (CPUC) an innovative proposal that would provide incentives for consumers to add batteries to rooftop solar systems they owned or leased. Vote Solar’s idea was that behind-the-meter battery storage could provide both reliability for the electric system during normal grid operations and resiliency for customers whenever there was an outage.
Our proposal was based on the Hawaii Electric Battery Bonus program that launched in June on the Island of Oahu in Hawaii, supported by Vote Solar. Like California, Hawaii is facing a looming energy shortage, with the retirement of Hawaii’s only coal plant next year. Vote Solar estimates that over the next two years, as many as 300,000 battery systems could be added to homes and businesses throughout California. Those systems would lower the risk of blackouts during extreme weather events and lower wholesale market prices during the most expensive hours of the day.
Vote Solar’s California proposal, inspired by the Hawaii program, has been submitted to the CPUC in its Microgrid Proceeding, which was opened up two years ago to address the multiple power outages resulting from the threat of wildfires. The lead commissioner in the CPUC proceeding, Genevieve Shiroma, had requested parties to come up with proposals that could help address Governor Newsom’s concern about overall electric system reliability.
Our California proposal would provide up-front cash incentives for customers who purchase or lease a battery storage system. In return for the incentive, customers would agree that the battery would be used for two hours each evening during the summer months to offset peak power demands. Vote Solar has recommended that each customer select a two-hour window between 4 pm and 9 pm when their battery would be discharged during the summers of 2022, 2023 and 2024. Higher rebates would be available for lower-income and medically vulnerable customers, as is currently the case in the Self Generation Incentive Program.
The Microgrid Proceeding is being expedited to quickly review Vote Solar’s proposal and other more limited proposals put forward by the state’s utility companies. A proposed decision is scheduled for October 29th with a vote by the Commission planned for November 18th. If the Commission adopts our proposal, it could then take the Commission a few months to set the program up administratively, if it acts expeditiously. That would still leave time for tens of thousands of customers to get batteries installed before next summer. More could then be installed for the summers of 2023 and 2024.
The state’s three big investor-owned utilities appear to be trying to slow down Vote Solar’s proposal. They have argued that there is a need for further study to determine if there might be unintended negative consequences. On the other hand, their responses to the Governor’s emergency proclamation have been quite unambitious in comparison with Vote Solar’s proposal. Southern California Edison proposes to expedite interconnections for microgrids that can also provide reliability. This proposal is complementary to Vote Solar’s and could be helpful for larger battery systems on commercial buildings.
Pacific Gas and Electric proposed studying the use of mobile diesel generators during the summer of 2022 to provide system capacity during extreme weather events. However, they noted they would likely have to make investments at distribution substations to enable the diesel generator to operate in parallel with other grid resources. (Vote Solar opposes adding fossil generators for reliability, given the negative health and climate impacts.) San Diego Gas and Electric is proposing to own and operate two multi-customer microgrids along the border that could improve reliability.
While California deliberates on the Vote Solar proposal, a Utah utility, Rocky Mountain Power, is moving ahead with a similar concept that it claims will put Utah years ahead of California in the innovative use of batteries. The Utah program intends to standardize utility communications with behind-the meter solar and battery systems so that they can be used not only to provide system reliability but also local voltage support. While the Vote Solar proposal focuses immediately on system reliability, the batteries could be used after 2024 to provide a broader range of grid services.
Governor Newsom will soon be heading over to Glasgow, Scotland to attend the United Nations Climate Change Conference. The U.S. strategy on climate policy is still being debated in Congress. That uncertainty about national policy gives California’s Governor the opportunity to put forward a dynamic portfolio of policies for the 5th largest economy in the world. Vote Solar’s battery incentive proposal could be a vital part of the suite of policies for others to consider in Scotland.