California approves community solar program backed by utilities
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[May 31, 2024]
(Reuters) -The California Public Utilities Commission on
Thursday approved a new solar energy program that the industry had said
would not go far enough to incentivize smaller community projects.
The decision marked the latest disappointment for the solar industry in
California, which is the top U.S. solar market overall but ranks eighth
out of 50 states in community solar.
In the last two years, California has reduced incentives for the clean
energy technology, in part because regulators worried the subsidies were
being funded by ratepayers who do not have solar.
The CPUC voted to expand two existing programs and create a third, which
was supported by utilities, in a 3 to 1 vote. The new program will be
able to tap $250 million in federal funds provided under President Joe
Biden's climate change law, the Inflation Reduction Act.
The program update, which was required by state law, was in part meant
to expand solar energy to lower-income Californians who may live in
apartments or cannot afford rooftop systems.
Despite its reputation as a leader in solar energy, California has
lagged other states in building community solar projects. As of the end
of 2023, California had 163 megawatts of community solar, compared with
more than 2 gigawatts in New York and 1.1 GW in Massachusetts.
"It's disappointing that the CPUC's decision fails to provide meaningful
improvements to California's lackluster community solar program," Steven
King, a clean energy advocate with green group Environment California,
said in a statement. "Utilizing spaces such as rooftops, parking lots,
and roadside land for generating solar power is essential to address the
climate crisis and reach 100% clean energy as soon as possible."
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California has among the most ambitious climate change goals of any
U.S. state, and Governor Gavin Newsom has pledged to decarbonize the
state's economy by 2045.
The CPUC decision marked a rejection of a scheme backed by solar
project developers, ratepayer advocates, environmental groups and
others that would have compensated project subscribers for energy
exported to the grid based on the value of the electricity at that
time.
The PUC said that proposal would have increased costs for ratepayers
not participating in the program.
Instead, the regulator embraced a proposal to treat community solar
projects like wholesale facilities and compensate them at a rate
they would pay for power elsewhere, known as the avoided cost. That
scheme was backed by utilities including Southern California Edison
and Pacific Gas & Electric.
The PUC said it would sweeten the returns for project developers
with state and federal funds.
(Reporting by Nichola GroomEditing by Chris Reese, Diane Craft and
David Gregorio)
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