SB843 Lets California Utility Customers Share Solar Projects

May 19th, 2012 by Susan Kraemer

A revolutionary renewable energy bill could become law in California as soon as this September.

It will allow customers of the big three utilities in California to buy power directly from renewable energy projects developed in their neighborhoods for the first time.

They would get a credit on their regular utility bill for their share of renewable energy delivered to the grid.

SB843 is designed to expand solar power in the state by opening it up to those who would like to go solar but lack the roof space, the credit rating or the home ownership needed.

The policy cleverly leverages the two greatest solar resources of the state: the sizable numbers of urban renters who want to go solar but cannot – and the huge cadre of extremely professional solar developers. (Plus the California sunshine.)

Solar developers would build projects in an economic size range, up to 20 MW, the utilities would handle the billing, the developers would recoup their investment by the shares, and the utility customers would have an easy way to go solar.

There is an abundant supply of young sophisticated urban Californians desperate to go solar, but who rent, or have a teeny roof, or no credit, or too many trees, or have such a small electricity bill that it’s not worth building them a solo system.

Similarly, there’s no shortage of competent solar developers in California. To meet California’s 33 percent by 2020 mandate, the three utilities had so many offers that prices were driven down around the 9 cent a kilowatt hour mark for utility scale solar contracts – and if they were all accepted would have supplied 100 percent of the state electricity from solar.

This bill finally brings these vast driving forces for clean energy development together in a way well calculated to grow solar adoption in the state, in middle sized projects.

According to PV-Tech, these projects would range in size from 1 MW (which takes up about a city block) to 20 MW.

Environmental Entrepreneurs estimates that the bill will generate $6 billion in economic activity from the construction of up to 2 GW of community distributed solar; tax revenues will be boosted by $500 million and 48,000 jobs will be created – all at no cost to the public sector.

The projects built would be in addition to the 33 percent mandate the utilities must meet, says Tom Price, the director of policy and market strategies at CleanPath, a solar project development company in San Francisco. They don’t involve complexities like Renewable Energy Credit (REC) auctions and trading, which people seem to distrust.

“This is very different from RECs, than just buying the credit from a wind turbine,” said Price. “This is 100% brand new energy built for that customer and the RECs are retired on behalf of that customer and they are made so that they cannot be resold and there is no double counting.”

Neither as large as the utility-scale projects in the high desert, nor as small as the home rooftop systems, it fills a void in between. But most importantly they would fill a void in a sense of neighborhood ownership of power.

As our own John Farrel has covered here, studies have found that a sense of local shared ownership goes a long way to eliminating NIMBY issues:

With local ownership of the wind project, 45% of residents had a positive view toward more wind energy (Zschadraß). In the town with an absentee-owned project (Nossen), only 16% of residents had a positive view of expanding wind power; a majority had a negative view.

But the one huge issue that makes most waver before solar adoption is creditworthiness.

To go solar for no money down with a lease or PPA, you have to have at least reasonable credit, unlike when you sign up for regular electricity (because if you don’t pay your electric bill, your utility can simply turn off your service).

So, if the utilities handle the money side, that removes the need to have creditworthiness.









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About the Author Susan Kraemer writes at CleanTechnica, CSP-Today and Renewable Energy World. She has also been published at Wind Energy Update, Solar Plaza, Earthtechling PV-Insider , and GreenProphet, Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times. Follow Susan on Twitter @dotcommodity.