Community solar allows California to lower energy bills and increase access to clean energy

It’s not often that environmental justice groups, solar developers, environmental groups, home builders and ratepayer advocates agree on their policies. But when it comes to solar energy for California communities, this diverse group of stakeholders agrees: The California Public Utilities Commission (CPUC) is wrong.

Regulators may soon vote on a flawed proposal that would senselessly limit access to the benefits of shared solar and storage for renters and low-income communities. In California, where residential electricity rates have doubled over the past decade, this would limit a key opportunity to lower bills.

At The Utility Reform Network we are calling on regulators to reconsider. Done right, California’s community solar policy can expand access to the financial benefits of solar and energy storage to communities that have been left out of California’s rooftop solar revolution – renters and low-income households. Most importantly, it can do this without increasing everyone else’s electricity bills.

Opinion

Here’s how community solar works: Instead of installing solar panels on a single-family home or apartment building, community solar projects allow subscribers to get some of their electricity from a centralized solar farm located elsewhere, such as a community center, parking lot, or field. This allows the customer to establish a direct connection with a specific clean energy project, realize some of the economic benefits generated by the facility, and have those benefits credited to their utility bill.

California lawmakers have seen the value of solar power for communities in accelerating the transition to clean energy while providing utility bill relief to low-income communities hit hardest by rate increases. That’s why in 2022 they passed Assembly Bill 2316, which directed the CPUC to create an affordable and equitable community solar program.

Lawmakers have made clear to regulators the purpose of their legislation: to consolidate, eliminate or modify existing programs that have failed to provide meaningful access to 100% renewable energy. They supported a cross-stakeholder-backed approach called a ‘net billing tariff’, which would require at least 51% of benefits to be provided to low-income customers and would enable tenants and low-income customers who are unable to install rooftop solar panels to get economic and environmental benefits of clean energy. The program aims to help the 45% of Californians and the two-thirds of low-income residents who rent their homes.

Unlike unsustainable incentives for rooftop solar, which have become so expensive that they are a major driver of overall rate increases, solar subscribers would receive bill reductions tied to the demonstrated value these projects provide to the overall grid. This approach is much more cost-effective, would protect the interests of all customers and encourage projects to operate in a way that generates the highest value for the entire network.

Instead of using a net-based tariff, the CPUC has proposed doubling down on California’s current failed approach: legacy utility-run programs that have a history of anemic results and are highly unlikely to succeed without major changes.

The details of the current structure are complicated, but the results of implementing this decision are simple: low-income communities in desperate need of utility bill relief will be largely barred from using solar energy. This is a devastating result.

In addition to limiting a key tool for lowering utility bills, hindering the development of community solar systems will keep California from getting the resilient and reliable clean energy networks that customers deserve. Requiring on-site solar projects to be combined with battery storage, as proposed by the Utility Reform Network, will ensure that solar energy produced during peak hours of the day is stored and released in the evening, when the grid faces maximum demand and greatest dependence on fossil fuels. This storage capacity would significantly increase the value of these designs as powerful tools for network reliability.

It’s time for the CPUC to recognize the opportunity to leverage community solar to meet the state’s energy reliability and affordability goals. The commission must reject the flawed proposed decision and instead choose to lower energy bills for Californians while increasing access to clean, reliable shared solar energy for renters and low-income communities.

Matt Freedman is an attorney at The Utility Reform Network.