SMUD community solar approval threatens California new home solar mandate goals

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The California Energy Commission (CEC) approved the Sacramento Municipal Utility District’s (SMUD) Neighborhood SolarShares Program, a proposal for community solar under the 2019 Building Energy Efficiency Standards (Energy Code). In November 2019, the commission decided to table the decision after the solar industry said SMUD’s original proposal would undermine the new home solar mandate and take away from the goal of installing localized solar projects. The Commissioners agreed to postpone the decision in 2019 to better define “community solar,” according to LA Times energy reporter Sammy Roth.

The California Solar & Storage Association (CALSSA) denounced the decision.

“While we are disappointed by the Commission’s decision, we are mostly disappointed by SMUD. For the sake of the environment and customers, SMUD should immediately amend its program so it doesn’t block any home from going solar,” said Benjamin Davis, policy associate for CALSSA, in a statement.

Despite continued solar industry opposition, the new SMUD proposal was satisfactory to the commission and received unanimous approval.

“Community solar was built into the Energy Code to provide flexibility in satisfying the solar requirement,” said Commissioner J. Andrew McAllister, who is the Energy Commission’s lead on the Energy Code. “We expected that the marketplace and stakeholders would find solutions appropriate for their communities. SMUD has created a proposal to do that by offering builders 100% solar power at guaranteed savings to their customers. Other community solar proposals will look different. Openness to diverse cost-effective solutions is a hallmark of California’s innovation economy and key to meeting our goals for clean energy, climate and resilience.”

The Energy Code provides for Commissioners to consider approving community solar programs based on the following six requirements:

  1. Enforcement – The solar resource must exist at the time the home is permitted and the applicant must work in coordination with the building department for review and enforcement
  2. Energy Performance – The energy savings must match that of rooftop solar
  3. Dedicated Energy Savings – The generated solar must be dedicated to the building
  4. Durability – Proposed facilities must be operational for 20 years
  5. Additionality – Savings cannot be counted to meet other utility renewable requirements
  6. Accountability and Recordkeeping – Applicant must keep records and make them accessible for 20 years

Commissioners voted unanimously that the Neighborhood SolarShares Program meets each of the six requirements.

“We are thankful that the CEC saw the benefits that community solar programs can provide and are excited to launch this first-of-its-kind program,” said SMUD CEO and general manager Arlen Orchard. “This program provides options to builders and a net benefit to potential homebuyers, all while providing clean power to our community. The state of California and the Sacramento region are facing an affordable housing crisis and our low-cost solar option provides a valuable tool to lower the construction costs of new homes while supporting carbon reduction goals.”

SMUD said in a press release that it has supported and incentivized the growth of the rooftop solar industry for many years: To date, 210 MW of customer-owned rooftop solar has been installed in its service area.

The SolarShares program guarantees resources that supply power to participating homes will be located in SMUD service territory; renewable power sources will be new and 20 megawatts or less; and assistance to developers and builders to facilitate offering a point of purchase choice option for homebuyers. SMUD also states that participants will see charges and receive credits on their bill at a guaranteed annual net benefit of $10 per kilowatt per year.

More details are available in SMUD’s revised application and CEC staff review.

News item from the California Energy Commission. Updated with CALSSA’s statement at 10:17 a.m. ET

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