California utilities are working hard to discourage new indie rooftop solar projects, but their upcoming changes in rate structures will simply accelerate the adoption of new storage technology.
San Diego Gas and Electric (SDG&E), Pacific Gas and Electric (PG&E) and Southern California Edison (SCE) are all proposing new rate structures that will move on-peak rates to later in the day, reducing the value of solar produced during the sunniest hours of the day. In California, real-time wholesale energy prices often hit zero during the day while the need for energy at night can spike them to as high as $1,000 a megawatt hour.
In testimony submitted as part of SDG&E’s time-of-use rate proposal, California Solar Industry Association (CALSEIA) member Kevin Weinberg, commercial sales manager for Baker Electric, pointed out that some commercial solar customers could see a 9 percent to 22 percent reduction in bill savings due to the loss of premium pricing during high-sun hours. Weinberg stated that this move “could put a lot of customers underwater with their power-purchase agreements, leases, loans and property-assessed clean energy assessments,” he wrote.
The California Public Utilities Commission (CPUC) will grandfather existing solar customers for up to five years for residential systems and 10 years for commercial, industrial and institutional systems before switching them to the new rates, which will allow the systems to payback at the rates they were financed at.
This action on the part of California utilities is part of a nationwide trend to punish small indie solar producers and discourage new installations while allowing the utility companies themselves to develop large-scale solar projects and retain control over electrical generation. Their slavish devotion to out-dated central station generation models is driving new indie solar technology development, and the results may be more and more households and businesses choosing to keep their solar-generated electrons stored on-site, reducing their need for grid power even more. However, the utilities are not oblivious to that fact, and are looking ahead to capitalizing on battery storage as well, as soon as the early adopters bring the price down.
SDG&E has proposed a pilot project and a special tariff that would reward battery system users for letting the utility company control the storage system and use it as part of its overall system balancing strategy, which may appeal to some customers. The Wall Street Journal recently reported that PG&E, Edison International and Sempra Energy are testing battery storage to create “virtual power plants” that manage green power and feed it into California’s power grid.
Meanwhile, the CPUC is itself encouraging solar storage. The CPUC’s Self-Generation Incentive Program (SGIP) provides rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter. According the the CPUC website, the planned reopening of SGIP to energy storage applicants is due to occur in mid-April or early May 2017. Once reopened, SGIP will reserve 75% of its incentives for energy storage projects and 25% of its incentives for generation projects. 15% of the energy storage reservation will be reserved for residential energy storage projects less than or equal to 10kW in size, and 40% of the generation reservation will be reserved for renewable generation projects.
Many storage companies are anticipating the reopening of the SGIP. In a press release from SimpliPhi Power and CivicSolar, they announced their partnership to bring new energy storage solutions to residential installers in California. The AccESS all-in-one-box storage system from SimpliPhi is now available from CivicSolar.
“Because of the inherent safety and non-toxicity of SimpliPhi’s lithium ferrous phosphate chemistry and proprietary battery architecture and management, the AccESS allows installers to eliminate the complexities of ancillary equipment necessary for thermal monitoring. They can now standardize on an integrated solution without the risk of thermal runaway or fire characteristic of cobalt-based lithium batteries and safely install energy storage inside or outside the home,” said SimpliPhi CEO Catherine Von Burg. “CivicSolar, like SimpliPhi, believes in empowering customers to make informed decisions about their power storage and generation needs with systems that are dependable, safe and enduring; without having to wait for ambiguous product availability dates that have not been deployed or validated through years of performance and field tests.”
Ms. Von Burg is obviously taking a shot at Tesla, another major player in the California storage scene. Tesla has made news in recent months by building a large storage facility for SCE comprised of their large-scale “Powerpack” batteries. Tesla’s “Powerwall” residential-scale system has yet to gain widespread adoption.