Although California far exceeds all other states in solar electric capacity, it’s falling short in efforts to support community solar programs that can make accessing solar more equitable and allow distributed solar systems to better support the electricity grid.
Community solar can describe various business models, but we specifically mean programs that enable individual consumers to receive utility bill credits for generation from a photovoltaic (PV) system that they share with others. Program participants may either contribute to part of the system’s upfront costs or pay a rate that finances their portion of the power produced.
Community solar offers electricity to users who may not be able host PV panels and allows developers to locate solar at places of greatest cost-effectiveness and best benefit to the stability and reliability of the grid.
Read the white paper — Community Solar in California: A Missed Opportunity
In general, dedicated rooftop solar systems provide a good economic proposition for residential and commercial consumers. The downside is these individualized systems disproportionately benefit homeowners and businesses and lead to PV systems sited without regard to grid-level or community needs – preventing solar from reaching its potential technical and societal benefits.
Community solar program
California’s community solar program, named the Enhanced Community Renewables (ECR) program, was created by the state legislature as part of the larger Green Tariff Shared Renewables program in 2013 and implemented in 2015.
ECR program rules allow consumers to enter into agreements directly with third-party, private developers to purchase solar and other clean energy generated by projects with their community. However, the program’s overly complex regulations combined with inflated and fluctuating retail energy pricing have discouraged private developers from partaking with participation so far limited to the state’s major investor-owned utilities.
The ECR must be reworked. Otherwise, community solar will remain a second-tier option for PV development with continuing inequitable access to solar and other renewables and while perpetuating random placement of rooftop solar that stresses grid distribution operations. Although California is behind on community solar deployment, the state can still burnish its image as an energy innovator by developing creative approaches to compensation that incorporate the technical and social value of PV.
Successes in other states
In contrast, state policymakers across the country are realizing the potential benefits of community solar and designing programs to boost participation.
Colorado built a low-income carve-out into its state community solar regulations. Minnesota takes a value-of-solar approach to determining appropriate compensation structures for community solar. Massachusetts offers rate incentives (adders) for power acquired from community solar projects and projects providing other valued benefits, such as serving low-income customers. New York has prioritized community solar projects that are explicitly designed and sited to benefit the grid and/or serve low-income electricity users.
Program needs to be fixed
California has an opportunity to build on the successes in other states. The first step is to retool or replace the existing ECR program, working with stakeholders to design improvements. It should be modified to create an attractive economic proposition for community solar developers and program participants. It should offer a meaningful option for low-income customers and nonprofit organizations to benefit from renewable energy. And community solar systems should be strategically sited to serve both customers and the grid, while providing adequate and sustainable revenues. A promising development is a proposed decision currently before the California Public Utilities Commission which, if approved, would enhance the likelihood of developing a limited number community solar projects in disadvantaged communities.
Community solar in California can be an important tool to promote social and environmental equity and contribute to the state’s ambitious build out of renewable generating resources to meet our energy and climate action plan goals. The ECR program just needs to be fixed so that we can realize the benefits community solar offers and provide those benefits to customers throughout the state.