Tag Archives: Residential Solar Power

State Policy, Utilities Ignite Community Solar Growth

By Rebecca Kern, Bloomberg BNA News

The community solar market is heating up thanks to favorable state legislation and interest from utilities in installing solar panels that provide cost-sharing among consumers who don’t have access to rooftop solar. With nearly 50 percent of the households and businesses unable to host rooftop solar systems, community solar is a largely untapped market for consumers looking to invest in solar, which is becoming cheaper than retail electricity in parts of the country.

Developers, analysts and utilities predict that the pace of community solar will continue to grow in the future as prices of solar decline and more utilities get involved. Solar developers and utility companies are driving a lot of the growth in the community solar market, leading to a projected 59 percent annual growth rate over the next five years. Legislation in a handful of states encouraging the development of community solar systems has also driven a lot of the growth in community solar over the past several years.

Minnesota, California, Massachusetts, Colorado, and New York are the states that “have set forth mandates in a very cookie-cutter program design to attract a lot of companies that are looking to scale up their community solar presence quickly,” Cory Honeyman, a senior analyst at GTM Research, said. Much of the near-term growth in community solar is concentrated in those four or five state markets “that have the right design in place for scale,” and 90 percent of the installations expected in 2015 and 2016 will take place in states with community solar legislation in effect.

Community solar is currently economically viable in parts of the country where electricity rates are high and has the potential to become more competitive in the future, analysts and developers say. The savings that community solar subscribers receive depend on the cost of electricity in the region and the solar resources in the state, and the electricity rates depend on the competitiveness of the electricity market, Glen Andersen, energy program manager at the National Conference of State Legislatures, said. “They have high electricity rates in California, for example, so it does make [community solar] more competitive. But if you were in a state like Kentucky, where electricity rates are really low, whether or not you’re going to see savings over just buying it from the utility is more questionable,” Andersen said.

Read full article from Bloomberg BNA

Related article: Note to Utilities: Here’s Why 2015 is the ‘Tipping Point’ for Community Solar (Aug 11)

 

Note to utilities: Here’s why 2015 is the ‘tipping point’ for community solar

By Herman K. Trabish, Utility Dive

With many utilities addressing the challenge of rooftop solar, community shared solar is fast emerging as an appetizing solar business model. A top solar research firm now says 2015 is the year that the community solar market breaks through.

A new market report forecasts community shared solar developers will grow 2014’s 65.9 MW of cumulative installed capacity to 465 MW by the end of 2016. A 59% annual growth rate for the sector over the next five years will take the 21 MW installed during 2014 to 534 MW installed during 2020, it predicts. “2015 is the tipping point year when community solar becomes a relevant sector in the broader U.S. solar opportunity,” said GTM Research Sr. Analyst Cory Honeyman, co-author of U.S. Community Solar Market Outlook 2015-2020.

Two key factors will drive the transition. First, the key states of Colorado, Minnesota, California, Massachusetts, and New York now have the kind of governing laws in place that give developers, utilities, and customers the confidence to buy in. Some 90% of installations in 2015 and 2016 will come from states with community solar legislation in place, the report forecasts, and 82% of that will come from the top four markets of Colorado, Minnesota, California, and Massachusetts. Second, community shared solar developers Clean Energy Collective (CEC) and SunShare have proven there are workable answers to questions about the business model. That is now bringing big, deeper-pocketed national players to the marketplace.

Read full article from Utility Dive

Inside California’s rate restructuring plan and the battle for fixed charges looming over it

By Herman K. Trabish, Utility Dive

California regulators united behind a new rate framework before the Independence Day holiday, but lurking behind the decision is a bigger one for utilities and renewables advocates alike.

The California Public Utilities Commission (CPUC) voted unanimously on July 3 to flatten the current four-tiered electricity rate system to two tiers, push for time-of-use (TOU) rates by 2019, and make other noteworthy changes to how utilities bill customers. California’s investor owned utilities, San Diego Gas and Electric (SDG&E), Southern California Edison (SCE), and Pacific Gas and Electric (PG&E), hailed it as a step toward making rates fair. The state’s utility watchdog condemned the decision, the ratepayer advocate is concerned about it, and solar advocates are studying it warily. All recognize a decision on fixed monthly charges was deferred.

Reaction from utilities: SDG&E

SDG&E Spokesperson Amber Albrecht:

  • “We were hoping for more immediate relief but we are on the right path. This new rate structure inserts more fairness and transparency into electric utility bills,” and “brings rates more in line with the true cost of service.” The new rate design will not take away customers’ incentive to be more efficient about their electricity consumption.
  • SDG&E tier 3 and 4 customers now pay “136% more than those in the lowest tier” and those in the lowest tier “pay 15% less than the cost of the basic delivery of electricity.” With the new two tier plan, the higher users’ bills will come down while the lower users’ monthly bills will likely edge up to around $2 to $5.
  • In 2017, the SUE will go into effect; it is expected to be levied on about 2% of SDG&E customers. “Each IOU’s rates will be slightly different but the basic pattern will be the same.”
  • “This is the first step in a broader discussion about the modern electricity bill. Now we know what the framework will be. Moving forward, the CPUC will have a number of proceedings and make a number of decisions on things like net energy metering.”

Reaction from utilities: Southern California Edison

SCE Director of Pricing Design Russ Garwacki:

  • “Our estimates find the high usage customers are paying $600 million in subsidies per year to low usage customers. Even when fully implemented in 2019, there will still be significant subsidies left in the rate structure but this does provide relief.” The new plan corrects an overpayment by higher usage customers without asking lower usage customers to subsidize them.
  • Incentives for conservation and solar: The new rate design will not take away customers’ incentive to be more efficient about their electricity consumption. Lower rates for tier 2 customers will reduce their incentive to be more efficient, but higher rates for tier 1 customers provide them with an incentive to conserve. “There is a point-counterpoint. And that extends to the incentive to go solar. Because the tiers are flattened and the rates are more closely tied to cost, more middle usage customers will consider solar. A recent CPUC energy division report found solar adoption is higher under flatter tiers.”
  • Minimum bill/fixed charges: The decision “was a compromise and balancing of a large number of issues,”—the minimum bill is an example. It is not, as characterized, a replacement for a fixed charge. The commission decided to deal with the fixed charge in 2019, but the implication of the minimum bill is that even the lowest usage customers should pay “some fair share” for the distribution system. “They viewed the minimum bill as a first step toward fixed charges. That is not what we asked for but it is a step in the right direction.”
  • TOU rates: Rates follow cost with a TOU structure and it is important to provide that cost signal for residential customers. SCE just completed transitioning all its non-residential customers to TOU rates. Studies are beginning to demonstrate that, over time, usage shifts and the load profile flattens in response to them. SCE wanted an opt-in to TOU rates, but the commission disagreed.

Reaction: Solar Industry

  • Solar Energy Industries Association: “Most importantly, we’re glad to see that the commission has not adopted fixed charges – and recognized that there’s no evidence to justify them. These rates are workable, although we believe a greater tier differential would more appropriately reflect the costs of high energy users.” The flattened tiers “should significantly mitigate any concerns the utilities have about cost shifts among ratepayers.”
  • Solar Electric Power Association: “This decision is an important part of the process to incorporate more distributed resources into the system.” But rate design “needs to be articulated as part of a broader conversation on the utility business models.”
  • SolarCity: “The proposed decision achieves the utilities’ goal of flattening the tiers while also making the entire rate system more equitable for ratepayers. If net metering remains in place, this decision will continue to allow Californians to go solar.”

Read full article from Utility Dive

Report: Solar Energy Benefits Vastly Outweigh Costs

Homes and businesses with solar panels deliver more value to power customers and society than they receive through programs like net metering, a report said today.

The Environment California Research & Policy Center report, Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society, comes as California answers critical questions about the future of net metering and solar energy. Earlier this year, Governor Brown called on California to increase the amount of electricity generated by renewable energy sources, such as solar energy, to 50 percent by 2030. Meanwhile, regulators at the California Public Utilities Commission (CPUC) are working to decide by the end of 2015 what the net metering rules will be for customers who go solar after the current program sunsets.

Of the 11 net metering studies reviewed in the report, all found that solar panel owners offered power customers net benefits, such as reduced capital investment costs, avoided energy costs, and reduced environmental compliance costs. In addition, solar energy creates valuable benefits for the environment and society at large, including avoided greenhouse gas emissions, reduced air pollution that harms public health, and the creation of local jobs. Eight of the 11 studies also found that the value of solar energy was higher than the average local residential retail electricity rate. The median value of solar power across the studies was nearly 17 cents per unit, compared to the nation’s average retail electricity rate of about 12 cents. In other words: utilities that provide retail rate net metering tend to underpay solar panel owners, not subsidize them.

Read full press release