Utilities moving in on distributed generation solar markets
There’s a new phenomenon afoot. Across the U.S., utilities are getting involved in distributed generation solar markets like never before.
In March, Southern California Edison submitted an application to the California Public Utilities Commission to install 250 to 500 MW of solar photovoltaics, in projects of 1 to 3 MW, on leased rooftops distributed throughout its service territory. If approved, the SCE application would allow SCE to own and rate-base the generating assets and sell the electricity to its customers.
Not to be outdone, Duke Energy in North Carolina has announced that it wants to do $100 million worth of distributed generation solar (about 16 to 20 MW), and more recently, San Diego Gas and Electric filed an application with the CPUC seeking approval of $250 million of distributed solar (70 to 80 MW). That’s a lot of solar, and it will be installed in a way that we are not used to seeing — not as large central-station plants, but as utility-owned generation sites at or near loads, providing wholesale power for utilities to sell to their customers. We hear rumblings from literally every corner of the country about other utilities considering similar moves.
Boon or threat? Kevin Fox and I just published an article in Renewable Energy World with an answer, and our thoughts about what it all means for the solar industry. The Cliff Notes version: We believe this new development provides advocates with a tremendous new opportunity to open up solar markets for all. The tactic we are adopting is like judo: we use utilities’ arguments and momentum to leverage market mechanisms that allow anyone that can deliver the same value to do so.
In California, we are working toward a standard-offer wholesale tariff under the RPS (for the wonks, the docket proceeding can be found here, and the initial filing of the joint solar parties can be found here). In North Carolina, we are intervening in Duke’s application to establish a standard-offer REC program.
We expect this trend to accelerate, as the recent re-up of the 30 percent federal investment tax credit also extended the offer to utilities.