Community Solar is the Law of the Land in California Now
On September 16, 2022, California Governor Gavin Newsom quietly signed a community solar bill that, if proactively and properly implemented, will bust open the clean-energy revolution for all California utility ratepayers, finally making it possible for renters and homeowners who can’t afford solar panels or whose roofs aren’t solar-power friendly to participate.
The U.S. Department of Energy defines “community solar” as any solar project or purchasing program, within a geographic area, in which the benefits of a solar project flow to multiple customers such as individuals, businesses, nonprofits, and other groups. In most cases, customers are benefitting from energy generated by solar panels at an off-site array.
In cities like Los Angeles, more than half the households are renters while in the state as a whole its 45 percent. With the signing of AB 2316, these ratepayers now have the chance to enjoy affordable and reliable clean energy, too.
And it gets better: the legislation also requires that at least 51 percent of a community solar project serve low-income customers while prohibiting the program’s costs from being shifted onto nonparticipating customers.
An early draft of the bill contained subsidy provisions to help low-income families subscribe to community solar programs. Unfortunately, that was stripped out of the bill but it remains the case that all subscribers will benefit from reduced power bills for as long as they participate in a program. Additionally, the Biden Administration’s Inflation Reduction Act (IRA) expands the credits for clean-energy projects serving low-income or underserved communities, adding another incentive to include them in the mix.
Supporters of the AB 2316, sponsored by Chris Ward (D-San Diego), are a diverse bunch – from homebuilding groups and the Union of Concerned Scientists to the Sierra Club, Grid Alternatives, and the California Environmental Justice Alliance. I mean, really, what’s not to like about saving an average of 10 percent on electricity bills and improving grid resilience through distributed energy production while democratizing clean energy?
Unions like the International Brotherhood of Electrical Workers have tended to resist decentralized energy systems, but when Gov. Newsom signed AB 2316 into law the IBEW hailed the move. The sweet spot for unions is that the community renewable-energy facilities will be owned by investor-owned utilities (IOUs) and facility construction will have to comply with specified prevailing (read “union”) wage requirements.
It's a fact that protecting IOUs from distributed-energy entrepreneurs sustains a power imbalance between utility companies and consumers. But requiring prevailing wages is indisputably the right move – and any move that starts to jump the rut of centralized power production is disruptive in a good way. After all, it’s not an insurmountable leap from community solar to microgrids. Both can generate power but microgrids can also “island” from the grid and continue to produce and distribute electricity even when the grid goes down.
California utilities, from IOUs like Southern California Edison to municipal utilities like Los Angeles Department of Water and Power have been epically foot-dragging on incorporating community solar – and microgrids in particular – into their infrastructure. Here’s just one example: In 2018, LADWP partnered with the National Renewable Energy Laboratory to study pathways to get the nation’s second-largest city to 100% clean energy. The study was three years in the making and concluded that “a reliable, 100% renewable electricity supply is indeed achievable for LA by 2045 or even a decade sooner.” Impressive!
Not so impressive is the fact that in the entire 1,291-page LADWP/NREL report “microgrid” is mentioned exactly one time, in the chapter titled “Adopted Rooftop Solar and Storage.” And it is mentioned here, just this once, to be dismissed out of hand as an option. The report states that “assessing the economic value to adapting [LADWP’s current] system to be more resilient [by integrating microgrids] is both difficult and subjective.” The cop out would be laughable if it weren’t so retrograde and harmful to our shared clean-energy future.
In any event, AB 2316 is a win for environmental justice and intelligent infrastructure design. I wish, however, that the bill had mandated that battery storage be an integral part of any community solar program. Thanks to the IRA, however, the bill’s prevailing wage requirement triggers a 30 percent federal tax credit for storage, which will help. Additionally, market forces will push community solar projects to add storage so that they can supply electricity when it’s needed and is more remunerative – meaning after the sun goes down and during peak use when rates are highest.
Weirdly, the governor’s office did not put out a press release touting the truly progressive nature of this bill, and nearly two weeks after its signing there have been precious few news accounts of Newsom’s epic move. It’s a big deal.
