The first bill is AB 327, which addresses the topic of net metering for rooftop solar photovoltaic (PV) systems and residential rate reform. Net metering allows owners of small solar PV systems to use the grid as a giant battery, shifting any excess generation to the grid for use by other utility customers, and then taking back energy from the grid when the sun isn’t shining. I tackled this topic in January as the legislative cycle began, highlighting utility complaints that, as more and more customers generate their own power using net metering, the costs of maintaining the power grid that benefits us all are spread across a smaller and smaller set of customers without solar PV.
Here are the primary aspects of AB 327 that could create a seemingly unlimited market for not only solar PV, but all forms of renewable energy:
- Removes the scheduled suspension on net metering that was to go into effect at the end of this year
- Eliminates uncertainty over how the current net metering cap is calculated, and provides a framework for permanently removing the net metering cap altogether
- Removes the current 33% ceiling on the state’s Renewable Portfolio Standard, which, in essence, means there is also no cap on California’s wholesale renewable energy supplies
Pacific Gas & Electric, with a nation-leading 90,000 customers taking advantage of net metering, supported AB 327, as did the solar lobby and ratepayer advocates, but only after a series of last minute amendments brokered, in part, by the governor’s office. What makes this legislative consensus even more amazing is that California has among the most liberal net metering laws in the country. The battle over net metering is still brewing across the United States, but this California deal may take some of the some of the acrimony out of the debate, and point a path forward for compromise.
The other bill worth noting heading for Gov. Brown’s signature this month is SB 4, which addresses natural gas fracking, which has helped provide a huge supply of low-priced natural gas but, according to critics, also poses environmental risks. Just as utilities have attacked net metering, the American Petroleum Institute has sought to undermine RPS laws, arguing that they increase costs to consumers and favor renewable sources over natural gas. Natural gas prices have doubled in California in the last year, which, coupled with tighter limits on emissions of carbon due to the state’s climate change law, led to a 70% increase in wholesale energy prices in California. Only time will tell how the combination of new fracking regulations and removal of any prescribed limit on retail and wholesale renewables will impact California’s energy market. My prediction? Growth in microgrids and other smart grid solutions will continue, as clearly the current status quo will no longer do.
Tags: Microgrids, Natural Gas, Policy & Regulation, Smart Energy Program, Solar Power
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