California Tries Again For A "Community Clean Power' Bill

Ucilia Wang, Contributing Editor
December 14, 2012 | 7 Comments

The idea of giving the masses more access to solar energy has taken shape in a newly drafted bill in California that will allow renters to buy renewable electricity that is produced away from where they live and get credit on their utility bills.

Sen. Lois Wolk introduced the bill yesterday, a second attempt by her and solar energy proponents to pass such renewable energy sharing legislation. SB 43 will allow renters, along with homeowners who don’t have good enough credit or have roofs that aren’t suitable for solar panels, for example, to sign contracts with owners of solar power generation projects for a portion of the electricity produced. The amount they pay for will show up as credits on their utility bills. Businesses that lease office space will be able to do the same.

Participants could buy enough renewable electricity to offset 100 percent of what they get from their utilities. The renewable energy generation projects they contract with must be located within their utilities’ territories. Each project can’t be larger than 20 MW in size. The bill would apply to investor-owned utilities in the state, such as Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.

The renewable electricity produced won’t actually be piped to the buyers. Instead, it will flow into the grid and in effect increase the amount of clean energy in the power supply.

The concept of subscribing to offsite solar or wind power generation isn’t new. Some utilities in the country promote programs that tag on some extra dollars on the monthly bill of customers who pay for renewable energy that their utilities buy on their behalf. Xcel Energy, for example, runs its Windsource program in several states. Closer to home, the Sacramento Municipal Utility District runs a SolarShares program.

A startup called Solar Mosaic in California has sold shares of solar power projects but markets its service as an investment opportunity.

Although SB 43 covers various kinds of renewable energy, solar energy will likely be a popular choice. Unlike, say, wind turbines, solar panels can easily find a home not only on land close to cities but also high above ground, such as the roofs of large industrial complexes. That flexibility, along with a state incentive program called the California Solar Initiative, already has made California the largest solar energy generation market in the country.

The latest bill differs from the previous version in several ways. Instead of creating a 2-GW program, the new bill will create a 500-MW one instead. The California Public Utilities Commission can expand it later. The bill also includes language on protecting sensitive environments from renewable energy development and ensures that clean power projects serving low-income residents also will be located close to them, said Tom Price, director of policy and market strategies at Cleanpath Ventures, a power project developer in San Francisco that has helped draft the bill. The idea is to promote solar construction jobs in low-income communities. The new bill also simplifies the process for crediting the renewable electricity purchases on the utility bills, he added.

Solar energy proponents say the bill will benefit the majority of the households and businesses in California because they are renters or don’t have suitable properties for installing renewable energy equipment. It does indeed provide more access to clean power. It also threatens the traditional business model of utilities, unless the utilities get into the game of building and selling these shared renewable energy projects. But they won't be allowed to do that under SB 43.

7 Comments

Mark Miller
December 17, 2012

Ulicia,

Thanks for the SMASH reference!! I have forwarded the link to the installers of my system. I will scope out my in-laws parcel over the holidays to see if they have any clear space for a system. Their two story home, which must be close to 40 years old by now, is nestled in a set of pine trees so a roof mount system is out of the question for them. I think they may have a 3/4 of the day clear (i.e. shade free) spot close to their well. My present to my mother in law this year is an induction burner for her to try out, hopefully use, for cooking as it is a bit more energy efficient then her electric range. My wife loves the unit I got her earlier this year.

My in-laws don't have a lot of need for irrigation, but they do have to pump water from their well for household (clothes washing, cooking, showers, etc) uses. As they are going to be home more now they are going to need to plan, i.e. budget, for a tad more energy usage monthly. Unlike my in-laws we have a lot of fruit trees and roses that require irrigation to keep them alive and producing in the summer months. We put in three new fruit trees earlier this fall so our electrical energy needs are going to go up a tad next summer. Hopefully, we are going to save enough energy by using the induction burner for some of our cooking needs to offset the extra energy we need to pump water from our rather deep well.

Dave your "lazy bums" reference is inappropriate. For your reference I found the work ethic of the folks I met in the Hong Kong area to be beyond reproach.

Ucilia Wang
December 16, 2012

@612 STS: The idea of not "shifting costs to non-beneficiaries" means the incentives from the California Solar Initiative won't be available to owners of the community solar projects. The owners can still take advtange of the 30% federal tax credit.

There is a state program called Single Family Affordable Solar Housing that subsidizes PV system installation. If you haven't checked it out, then you can find some info here: http://www.gosolarcalifornia.ca.gov/affordable/sash.php

Going back to SB 43: I'll ask more about the bill's design for low-income residents. I do want to point out there is no promise of energy savings in the bill, as far as I can tell. The bill promises to give people access to "affordable" solar, and the definition of "affordability" isn't clear cut. I'm going to emphasize this point more the next time I write about it. Whether your in-laws will benefit from SB 43 is not certain at this point because the bill is new and will go through many re-writes -- it will depend on the program fee/rate designs and your in-laws' energy use. Thanks for bringing up the issue and stay tuned.

Mark Miller
December 16, 2012

Ucilia,

My mother in law just retired (at age 71) from the working world in Northern CA (PG&E territory). She lives in the Sierra foothills on a forested country parcel at an elevation of about 2000 feet. They don't have natural gas or propane at their place- hence they don't have the option of using natural gas for HVAC, or for heating their hot water. Your reference to moderate income (my in laws previous economic status) and low(er) income status reminded me of an option that the ISO's and CPUC have in place to ensure affordable electrical (and natural gas, but that's a different topic) energy via the CARE program.

I had my in-laws check into this program as their electric bills have gone up recently with the change (reduction) in baseline quantities and their lifestyle change. Their need for electrical energy at home has gone up as they spend more time there now. My in-laws income status is above the CARE limit so they aren't able to access this program. If they were able to get onto this program (26% of PG&E's customers/households/billing meters fall under the CARE program), then their electrical energy costs would drop on their marginal usage from 33 cents kwh down to 12 to 14 cents.

I am having a hard time figuring out how any community RE system could be "designed" that can benefit someone on the CARE program while at the same time meeting the "while not shifting costs to nonbeneficiaries." Mathematically it doesn't add up.

Bruce Karney
December 15, 2012

Wolk's bill would not apply to municipal utilities like SMUD. SMUD has very low rates, but the 3 investor owned utilities in California have high rates for customers who use a lot of electricity. SMUD's peak summer rate is $.183/kWh, while PG&E's peak rate is $.339.

The price of leased solar installed on a single family residence in Northern California is now about $.21/kWh (with a typical 3% annual escalator). On a large scale, community solar farms in Northern California should be able to produce electricity profitably at a price of around $.15/kWh with a 2% annual escalator. Emissions-free solar electricity at that price will be a very attractive service for tens of thousands of people at all economic levels. Many will save money, but some will happily pay a little more for the green attributes of renewably generated power, just as many Sacramento residents do today via SMUD's SolarShares or Greenergy programs.

Ucilia Wang
December 15, 2012

@Dave Fisher: I'm not sure what you are referring to in your comment. I can tell you that Solar Moasic's projects tend to locate in urban or suburban areas. They are not massive projects like the ones being built by First Solar and SunPower in the desert. Here is a list of Solar Mosaic's projects: https://joinmosaic.com/browse-investments

Ucilia Wang
December 15, 2012

@6.12 STS: Thanks for looking into the SMUD program. I think the idea of utility bill savings through solar, while is possible, also can be over-played by solar retail service providers. How much you save or don't save depends on your energy use and the cost of owning solar equipment or your solar lease. It's been the case that high energy users see more savings than low energy users. My parents live in Southern California, and their monthly bill is so low that they aren't going to reduce their bills through solar. You are right to say that the design fo the SB43 will be crucial to figuring out if it will truly benefit low-income residents. We will see about that as the bill gets modified along the way.

Mark Miller
December 15, 2012

Ucilia,

I wasn't sure how SMUD's Solar Share program worked so I went to the link you provided to see the effect of signing up for a 1 or 2 kW system- using a yearly 8000kwh demand. The costs and benefits of going with this program are: https://myaccount.smud.org/Signups/SolarShareForm.aspx

"1 kW System
This system would replace approximately 22% of your electricity use with solar. With a $26.50 monthly program fee and an energy credit of $17.74 from the solar generation, this option would add an average of about $8.76 to your monthly bill.

2 kW System
This system would replace approximately 43% of your electricity use with solar. With a $53.00 monthly program fee and an energy credit of $33.36 from the solar generation, this option would add an average of about $19.64 to your monthly bill."

Understanding the rational for the monthly program fee seems kind of important to the viability of SB43. For the SMUD program the net costs of signing up for the program is more then the economic benefits. I can't imagine many low or moderate income renters or homeowners signing up for this program.

The SMUD program doesn't seem to meet the objective of cost savings noted in the bill:

"(d) Properly designed shared renewable energy programs can provide access and cost savings to communities that have under participated previously, such as low- and moderate-income residents and renters, while not shifting costs to nonbeneficiaries."

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Ucilia Wang

Ucilia Wang is a California-based freelance journalist who writes about renewable energy. She previously was the associate editor at Greentech Media and a staff writer covering the semiconductor industry at Red Herring. In addition to Renewable...