From Deserts to Rooftops: Solar’s California Battleground

As California pushes the leading edge of renewable energy adoption in the United States, it’s also approaching new legal hurdles that are slowly beginning to define the roles that solar developers and utilities will play in the year ahead.

This has been especially true in just this past week with news developments that will impact environmental protection and local jurisdiction on future projects, whether utilities can invest in manufacturing, and how much net-metering will be allowed by those same utilities.

The Environment

Several environmental groups have come out against the Calico Solar Project in San Bernardino County because of the 663-megawatt project’s potential impact on the desert tortoise and golden eagles.

Now a measure passed by the state Senate allows the developer, K Road Power, to sidestep local boards and go directly before the California Energy Commission, the state agency that is leading the effort to meet California’s 33 percent renewables target by 2020. According to the Los Angeles Times, Gov. Jerry Brown is expected to sign the bill into law.

The National Resources Defense Council and the Sierra Club are among the environmental organizations that have filed a lawsuit against the Department of the Interior to stop the project from moving forward, and they have come out strongly against Calico Solar as an ill-conceived project not worthy of special treatment.

According to K Road Power’s website, the first phase of Calico Solar received full CEC approval and it has secured an interconnection agreement with Southern California Edison. But the project proposed on federal land does not have the power purchase agreement in place needed to secure financing. The project is now working to switch from concentrating solar power (CSP) to photovoltaics.

This is not the first fight between a developer and the state’s environmental leaders, but it is one that is likely to further erode the natural partnership that should seemingly exist between renewable energy companies and those protecting California’s habitat.

Investing in Manufacturing

As Ucilia Wang reported on our site two weeks ago, PG&E was looking to take its investment in solar in a new direction. Utility companies traditionally invest in renewable energy by building power generation or by signing long-term power purchase agreements.

But in California, where solar innovation still thrives, PG&E saw an opportunity to invest nearly $10 million of ratepayer money with SVTC Technologies, a Silicon Valley startup that would provide equipment and engineering to smaller companies looking to enter that critical final step before commercializing their product.

But the California Energy Commission denied PG&E’s request, stating that allowing that investment did not offer enough benefit to the ratepayers footing the bill.

Critics have questioned the strategy PG&E took by linking the investment to ratepayer money, and regulators agreed by saying “that funding for this project is more appropriately sought from private sources.”

What’s clear, though, is that utilities themselves are looking for ways that they can help lower the cost of solar, and do it in a way that keeps much of the innovation, engineering and, yes, manufacturing in the United States.

Net-Metering

While utilities see the need for lower costs of solar, they’re also in a battle on another front to cap how much of it they need to accept. That’s the crux of a raging debate between PG&E, San Diego Gas & Electric and Southern California Edison over how to interpret the seemingly benign phrase, “aggregate customer peak demand.”

If utilities get their way and their interpretation remains, there could be 50 percent less net-metered solar in the state. A proposal introduced by California Public Utilities Commission Chairman Michael Peevey would clarify the meaning behind the wording and would thus boost the long-term outlook of the residential market.

But the utilities aren’t going down quietly. They recently sent a letter to Peevey expressing their concern over his proposal. In it they make the case that the law has been clear since its inception in 1996, and that every time the cap was raised it was done so with the definition of “aggregate customer peak demand” currently used by utilities. The bottom line, they say, is that a redefinition would double the amount of net-metered solar and would adversely impact ratepayers. If there is to be an increase in the cap, they say, it requires a change in the state law.

Advocates, however, continue to contend that the utilities are misinterpreting the original intent of the law. The author of the original net-metering law is among those siding with the solar industry.

The full commission can take up the vote as early as this month on whether to accept the proposal.

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