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Q&A: What Does The California Solar Mandate Mean And Where Does It Go From Here?

By Frank Andorka, Senior Correspondent

California has been working for nearly seven months on a plan to mandate solar on the roofs of all new-build homes starting in 2020. While the initial fanfare surrounding the bill took place in May, it didn’t become, in the words of Kelly Knutsen, “officially official” until yesterday. Knutsen, Director of Technology Advancement for the California Solar & Storage Association, agreed to talk to SolarWakeup about the mandate: what it means and where the California solar industry will go from here.

SolarWakeup: We thought this was a done deal. What was the vote about today?

Kelly Knutsen, director of technology advancement for the California Solar & Storage Association (Knutsen):There was always the small asterisk that the final part of the process for updating the California Building Energy Efficiency Standards is that the California Building Standards Commission (CBSC) had to officially sign off on the California Energy Commission’s (CEC) May 9 vote to update the standards. As the CBSC explained before the discussion, the CBSC confirms that the CEC followed all the proper procedures in developing their updated rule. This is done every three years as one final check on the process to ensure everything is done appropriately. CBSC’s hearing and final vote yesterday confirmed the rigorous process.

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SolarWakeup: How many new homes will this affect per year?

Knutsen: California on average builds 80,000 homes per year, per this California Department of Housing and Community Development report. There are exceptions for shading (the code is flexible for these types of instances), so technically not all new homes built will have solar, but 80,000 is a good estimate of the number of new homes every year that will now have solar installed.

SolarWakeup: What affect will this have on solar penetration in California

Knutsen: Each year there are roughly 120,000 solar installs on homes and buildings, and of those installations, currently only 15,000 are on new homes. (FYI — In 2016, there were 149,422 residential solar projects installed (both new and retrofit homes. It’s been on the order of 120,000 to 150,000 annually for past couple years). So, this new rule will see an increase from 15,000 to 80,000 new solar homes (65,000) each year. If retrofit stays the same, that increases overall installations to 185,000 per year, or 54% increase over the current 120,000 installs per year.

SolarWakeup Is the grid ready to handle the influx of distributed solar?

Knutsen: Yes. The grid already safely and reliably interconnects 120,000 to 150,000 residential solar installations each year, so adding another 65,000 each year is on the order of existing installations. In fact, the addition of distributed energy resources has been shown to actually decrease the need for additional transmission lines. PG&E, one of the nation’s biggest utilities, cancelled 13 transmission projects saving ratepayers $192 million – thanks to the growth of solar – making the additional ratepayer costs unnecessary. In addition, in Fresno, the rapid growth of solar has California officials reconsidering the need for a major new transmission line, which is projected to cost between $115 and $145 million to build. Finally, the new standards include a solar plus storage option, which if given the proper price signals, will provide benefits to both the grid and the consumer.

SolarWakeup: How will this affect utilities in the state?

Knutsen: I think the position of the utilities was best summarized in quotes from Julia Pyper’s GTM article on the new standards. In her article, Erik Takayesu, director of grid modernization, planning and technology at Southern California Edison said “[w]hen we look at what we need in the future to reduce greenhouse gas emissions, to get to the state’s goals of 40 percent below 1990 levels, there needs to be a lot more carbon-free resources that supply energy to the grid, and so we think that this is one component of that.” When discussing the impact to the grid, he added “[b]ut when we look across the system more holistically, when we consider the amount of electrification that’s needed with transportation, electric transportation, building electrification, we think that there will be some offset to the amount of solar that we’re seeing.”

SolarWakeup: Is the next goal to mandate energy storage and, if so, how soon will that discussion start?

Knutsen: The next goal on storage is to make it cheaper, easier and faster to install across the state. Discussions to make that happen are already underway and that will require work on multiple fronts. The state legislature just approved an extension of funding for storage incentives, and the state is working with local governments on ways to streamline the permitting processes through the implementation of AB 546. We worked hard to make the case for the inclusion of the solar plus storage option in the code, which we see as a very important step towards having all homes and businesses in California install storage – a goal we need to achieve in order to meet our ambitious climate change goals.

SolarWakeup: What advice would you give to other states that want to consider doing what California has done? What’s the most important lesson you learned through this process?

Knutsen: The key to California’s success was a well-known, inclusive and rigorous stakeholder process, with good debate, data and analysis from all parties. Like most things in life, building up working relationships over time can achieve good results that work well for all parties. The underlying framework was also there. State laws were passed over time (dating back to the 1970s) that established a state-agency-led process for increasing the energy efficiency of California’s buildings. Having a state agency implement the measure through a known three-year process developed strong buy-in from all stakeholders. Taking it in step-wise manner also helped. Solar was first option for compliance with codes (as was done in earlier versions of the standards) and then once determined to be cost-effective across all climate zones in the state it became a requirement. Flexibility for compliance, such as an understanding about shading, is important to include in a solar requirement. And finally, going back to the point at the top, make sure that it will be implemented. That means having key stakeholders like the solar industry and building community closely engaged in the process and on board with complying gives confidence that the codes will not just be paper on the books, but will provide real direction for real homes that will be built with solar.

Vivint Solar Plans To Grow California Operations Aggressively In Anticipation Of 2020

By Frank Andorka, Senior Correspondent

California has the most aggressive solar plans in the nation. This is no surprise. Between the 100% renewable portfolio standard (RPS) (which in the Golden State means solar) to its mandating that all new construction must have solar panels on them starting in 2020, it’s clear the legislature and the people of California have gone all in on the Solar Revolution.

But that would mean nothing if there is no one to serve the burgeoning market. Which is why the most recent announcement from Vivint Solar is so exciting that they are expanding their solar leasing program to the entire state.

Vivint Solar, a leading full-service residential solar provider, announced it has launched a new fixed rate solar lease plan. Initially available in select markets in California, the new solar plan allows new customers to install solar panels for no money down, lease them from Vivint Solar for 20 years and pay the same fixed monthly payment over the entire contract term.

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The new offering underscores Vivint Solar’s commitment to expand the solar plans homebuilders can offer to homebuyers as they prepare for California’s 2020 mandate requiring rooftop solar installations on new homes. In collaboration with Vivint Solar, homebuilders in California can offer multiple solar plans to homebuyers, who will have the opportunity to choose their preferred financing option.

“In order to provide a best-in-class customer experience, we must continue to diversify the ways homeowners can go solar and save money on energy bills,” said Vivint Solar CEO David Bywater. “This new solar plan introduces a simple, flexible option for embracing clean, renewable energy and gives new customers the assuredness that they will pay the same amount for solar energy in 2038 as they will in 2018.”

Vivint Solar expects to extend the fixed rate solar lease plan to additional states in the coming months.

SB700 Signed By Governor Brown, Extends SGIP 5 Years

By Yann Brandt, Managing Editor

Governor Jerry Brown has signed SB700, the bill also known as the ‘Sun Shines at Night’. The bill, which had passed the legislature in early September, will extend and fund the popular energy storage incentive called SGIP.

“If we are going to get to 100% clean energy, we need to be using solar power every hour of the day, not just when the sun is shining,” said Senator Scott Wiener, author of SB 700. “This bill will protect clean energy jobs while also protecting consumers from ever rising energy bills.”

The California Solar and Storage Association (CALSSA) backed SB700 as the signature legislation for 2018 and with over 200 solar professionals pushed for its passing at the annual lobby day. Yesterday, CALSSA called for emergency outreach to the Governor’s office to ask for the bill to be signed.

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“By signing this bill, the governor is making the sun shine at night!” said Bernadette Del Chiaro, executive director of the California Solar and Storage Association, the 500-member clean energy business group that championed SB 700 for the past two years. ”Energy storage is critical to achieving our ambitious climate change goals by allowing massive deployment of solar energy and giving everyday consumers another reason to be green.”

SB 700 re-authorizes the Self-Generation Incentive Program (SGIP) for five years, extending rebates for consumers through 2025. It would add up to $800 million for storage and other emerging clean energy technologies, resulting in a total investment of $1.2 billion for customer sited energy storage. Boosting energy storage will help California achieve its goal of generating 100% of its electricity from renewable resources, as called for in SB 100 (de Leon), which was signed into law on September 10th. A summary of SB 700 with more details about the SGIP program can be found here.

SB 700 won broad, bipartisan support in the California legislature in August with a 25-12 vote in the Senate and a 57-18 vote in the Assembly. It was signed into law by Governor Jerry Brown on September 27, 2018. The new law will take effect January 1, 2019.

No Bridge Necessary: Solar+Storage Cheaper Than Natural Gas In Southwest

By Frank Andorka, Senior Correspondent

According to a report from Bloomberg, natural gas is going to run into significant price competition from solar+storage in the coming years – perhaps even eliminating the need for new natural gas plants in parts of the American Southwest.

The report by Bloomberg New Energy Finance advances a story SolarWakeup has been telling you about for months, which is that new natural gas-fired plants are increasingly being seen as unnecessary as the costs of solar+storage, especially at the utility-scale level, continue to come down.

Prices are so low, in fact, that Bloomberg predicts solar+storage will replace nearly 7 GW of coal-fired generation in the region – but that’s not all.

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This won’t be contained to the Southwest,” said Hugh Bromley, a New York-based analyst at BNEF in the article. “This is spreading and will continue to spread.”

Bloomberg offers the following example:

For example, a 100-megawatt solar farm that goes into service in Arizona in 2021, coupled with a 25-megawatt storage system with four hours of capacity, will be able to provide power for $36 a megawatt-hour, according to BNEF. That’s well below the $47 price from a new combined-cycle gas plant, according to the report.

This finding mirrors what’s going on already in California and Arizona, where public service commissions (in Arizona called the corporation commission) are already looking askance a utility requests for new natural gas plants. In the past, utilities have relied on natural gas plants to fuel their electrical grids once the sun goes down, but with battery storage coming into significant usage, natural gas is increasingly obsolete.

In California, the Public Utilities Commission has become far more unwilling to allow its utilities to build or fix natural gas plants and is insisting far more often that they produce grid support through the use of solar + storage instead. And in Arizona, the Corporation Commission told Arizona Public Service (the state’s largest utility) to throttle back its plans to build 5.3 GW of natural gas plants in its latest integrated resource plan and instead resubmit it with more renewables (read: solar) in it.

Energy storage is the key.