The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

California Approves Innovative Program to Spur Mid-Sized Solar

Last week the California Public Utilities Commission (CPUC) voted unanimously to approve a new program designed to drive small to mid-sized renewable energy development. Called a "Renewable Auction Mechanism" (RAM), this next-generation feed-in tariff program will require investor-owned California utilities to purchase electricity from solar and other renewable energy systems up to 20 MW in size.

Solar advocates and industry representatives applauded the CPUC for its innovative approach to helping California meet its renewable goals and build a strong new energy economy.

Full text of the proposed program can be found here (PDF). 

The Commission vote establishes a 1-gigawatt (GW) pilot program for power from eligible mid-sized renewable energy systems. The program requires California’s three largest investor owned utilities to hold biannual competitive auctions into which renewable developers can bid. Utilities must award contracts starting with the lowest cost viable project and moving up in price until the MW requirement is reached for that round. The program will use standard terms and conditions to lower transactional costs and provide the contractual transparency needed for effective financing.  To ensure project viability and realistic pricing, the program requires development security and relatively short project development.  Utilities must file implementation plans in the next 60 days, and the program is expected to be operational this spring.

The RAM procurement model addresses many of the challenges facing wholesale renewable energy policy in California and around the world:

Small to Mid-Sized Project Size Expedites Solar Development

CPUC analysis identifies transmission as the single most significant barrier to development of large-scale renewable projects that have been the focus of much utility solar activity to date. While the state works out its transmission solutions, this proposed program stimulates immediate activity by establishing a market for smaller (up to 20 MW) renewable projects that can be incorporated into existing utility distribution infrastructure. These smaller projects will also likely be easier to finance, another critical hurdle in the current economic climate.

Market-Based Pricing Delivers Long-Term Value in a Dynamic Market

Some governments have used fixed-price feed-in tariffs to drive renewable energy development. One point of difficulty has been getting the fixed pricing right. If the price is set too low, it does not stimulate the desired level of market activity.  If the price is set too high, ratepayers pay unnecessary costs, suppliers throughout the value chain are not encouraged to reduce prices, and the program can lose political support. In contrast, the CPUC program uses competition to establish a price that is both sufficient for project development and protective of ratepayers. By continuing to deliver maximum ratepayer value by driving down installed solar costs and capturing changes in market conditions, the bidding mechanism is also more likely to provide a long-term market for the growing solar industry.  Instead of guaranteeing a price, this approach guarantees a market—providing necessary long-term certainty to developers.

Program Designed to Reduce Transaction Costs

Standardized contract terms and conditions level the playing field and reduce parasitic transaction costs associated with project development.  Multiple annual solicitations provide more continual access to selling opportunities.  And strong project viability criteria, including development security, reduce the problems associated with underbidding and speculative developers holding contracts but failing to deliver.  The program builds upon best practices to create a fluid, functional competitive renewable energy market.

Untitled Document

RELATED ARTICLES

Solar Beats Gas in Colorado

Christopher Martin, Bloomberg SunEdison Inc., the biggest clean-energy developer, began construction on a Colorado solar farm that will be the larg...

Listen Up: Solar Advice from Pat Redgate at Ameco Solar

The Energy Show on Renewable Energy World Technologies, companies and business models in the solar industry come and go. But even in the relatively new solar i...

Six Observations about the US Solar Industry Mid-2015

Paula Mints In the U.S. mid-2015, deployment of solar technologies into all applications is at a pivotal point with several facto...

Indian Solar Market Ready to Takeoff

Renewable Energy World Editors Mercom Capital Group, a global clean energy communications and research firm, released its quarterly update on the In...

PRESS RELEASES

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...

Redesigned HydroWorld.com Video Gallery

Hydropower news and information, and interesting promotional announcements are now avai...

30 days to GRC Annual Meeting & GEA Geothermal Energy Expo

The Geothermal Resources Council (GRC) has announced that it is only 30 days to go to t...

FEATURED BLOGS

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...

The Coming Multi-trillion Dollar Energy Investment Drive

In coming years, a multi-trillion dollar low-emission energy investment drive will get underway. Three catalysts wil...

The Perfect Elevator Pitch

The elevator pitch is a concise statement that grabs attention and communicates value, ideally leading to a next step...

FINANCIAL NEWS

Rosalind manages media, member and donor relations for Vote Solar, a non-profit working to make solar energy a mainstream resource across the U.S. Prior to joining Vote Solar, Rosalind spent five years directing and implementing PR campaigns for a...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

International Energy and Sustainability Conference 2015

The fourth International Energy and Sustainability Conference will be he...

Intersolar India 2015

Exhibition and Conference: November 18-20, 2015 Intersolar India 2015 I...

Intersolar North America 2016

Exhibition: July 12 - 14, 2016; Conference: July 11 - 13, 2016 Intersola...

COMPANY BLOGS

Be Like The Personal Trainer

Most people think sales is all about forming strong relationships with p...

7 Tips For Capturing Attention

When you’re giving a presentation or pitching a sale, you’re...

A Mind Trick For Call Reluctance

The more you think of yourself as the connection between a product or se...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS