Community Solar: California’s Shared Renewables at a Crossroads

In an article for Renewable Energy World, Navigant outlines how to get California Senate Bill 43 Back on Track

California, once considered a leader in community solar, has struggled to implement a key piece of legislation that mandates the creation of the Green Tariff Shared Renewables (GTSR) Program and provides an opportunity for the state’s three investor-owned utilities to procure up to 600 MW of new renewable energy combined.

According to an article in Renewable Energy World by Navigant’s Karin Corfee and Andrea Romano and John Powers of Extensible Energy, Senate Bill 43 (SB-43) applies a dramatically different financial model than net energy metering (NEM), with the GTSR compensation structure based on wholesale rates net of program fees and charges instead of retail rates. The GTSR currently does not provide a comparable economic return to NEM, but shared renewables could play a large role in filling the gap as NEM policy changes in California, particularly due to economies of scale and potential locational benefits.

With this in mind, Corfee, Romano, and Powers say that it’s time for the California Public Utilities Commission (CPUC) and the California State Legislature — in partnership with IOUs and industry stakeholders — to work together and revisit their interpretation of SB-43, setting a foundation for a successful shared renewables market in California.

“The key challenge in California is to develop a viable regulatory framework for promoting clean energy through a shared renewables business model while balancing the objective of maintaining nonparticipating ratepayer indifference,” the trio wrote. To achieve this, they recommend the following approach:

  • Balance key policy objectives
  • Revisit the bill’s Green Tariff and Enhanced Community Renewables rate structure, streamlining the complexities of the credit structure to reduce the variability and provide adequate stimuli to move the market to achieve the 600 MW policy goal
  • Streamline other requirements and approval mechanisms
  • Design programs to address the low-income and environmental justice market segments

“The gap in pricing between NEM and the current California shared renewables programs is so wide that small changes acceptable to all parties could, without abandoning the principle of nonparticipating ratepayer indifference, result in a lower price premium or a higher credit that would stimulate the market,” Corfee, Romano, and Powers wrote. “…By addressing these challenges, California’s vision for shared renewables as articulated in SB-43 could be achieved.”

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