California set a new, higher “carbon-free” energy goal this past week, burnishing the state’s reputation as a US and worldwide leader when it comes to use of renewable energy resources and the drive to reduce greenhouse gas emissions and limit global climate warming.
Governor Jerry Brown in early 2017 promised that California would buck President Donald Trump’s national energy and environmental agenda and continue to forge a path towards a fossil fuel-free economy and society. Putting his signature on Senate Bill 100 (SB 100) marks a major milestone in that regard.
SB 100 sets California – the world’s fifth-largest economy – on a path towards complete reliance on “carbon-free” energy. The bill sets a goal of zero-carbon energy meeting 60 percent of statewide electricity needs by 2030 and 100 percent by 2045.
“California has taken a monumental step in enacting one of the world’s most ambitious clean energy policies…Governor Brown and the legislature deserve enormous credit for getting SB 100 done,” Abigail Ross-Hopper, president and CEO of the US Solar Energy Industries Association (SEIA), said in a press statement. “As the largest solar market in the U.S., California has already proven that investing in renewable energy brings jobs and massive economic and environmental benefits to the state — benefits that will grow exponentially with the enactment of SB 100.”
Leaving the doors to clean energy innovation open
SB 100’s use of the term “carbon-free,” as opposed to renewable, energy is significant. It acknowledges that California is moving into uncharted territory as it comes to rely on unprecedentedly high penetrations of distributed renewable and carbon-free power generation and a host of decentralized, digitally networked clean technology, some of which may not even be envisioned or considered feasible at present.
Advocating in support of SB 100 was a “top priority” for SEIA’s state chapter this year, according to Rick Umoff, SEIA regulatory counsel and California director of state affairs. “It’s the right time for California to step up and show its leadership, both in terms of increasing use of renewable energy and reducing greenhouse gas emissions… SB 100’s framework increases the state RPS (Renewable Power Standard) to 60 percent, which is significant, especially considering the size of California’s economy,” Umoff told Solar Magazine.
Current Renewable Procurement Status:
Actual RPS Procurement Percentages in 2016
|Pacific Gas and Electric||33%|
|Southern California Edison||28%|
|San Diego Gas and Electric||43%|
“And [carbon-free] doesn’t mean renewables won’t wind up supplying the remaining 40 percent. The bill leaves the way open for stakeholders to take advantage of further declines in costs and new innovations and technology, such as energy storage. It [SB 100] is written smartly enough not to be overly prescriptive. It leaves the door open to development of other, carbon-free alternatives that could be important in terms of reaching SB 100’s 100 percent carbon-free energy target and achieving California’s greenhouse gas emissions goals.”
“California’s carrying the torch in the fight to combat climate change in the US,” added Jessica Sumikawa, chief legal officer for Freedom Forever, a fast-growing solar energy finance and installation company based in California. “Other states are watching California to see if the state can pull this off. It’s the fifth-largest economy in the world and it’s in a position to encourage and support others to pursue and achieve clean energy and climate change goals.”
Fueling the transition away from fossil fuels is the smart thing to do from any of various perspectives or viewpoints, Sumikawa continued. “Phasing out use of fossil fuels is a win-win situation all around – whether it’s fighting climate change, boosting the economy, creating jobs, or spurring innovation and the creation of new technology that will bring a 100 percent renewable energy goal within reach,” Sumikawa said.
Sumikawa agrees with SEIA’s Umoff in that she sees SB 100 being crafted smartly enough to leave the path to 100 percent clean energy open to innovations that may be just emerging, or not even conceived. “SB 100 is written well enough to capture technological advancements that are not envisioned today…We need to develop the technology to handle the variability, and all the other aspects, of renewable energy resources to the greatest degree possible. SB 100 extends across a period of more than 25 years. Given the pace of innovation and commercialization, I believe the bill’s goals are well within reach,” Sumikawa said in an interview.
The capstone of California’s institutional framework for clean energy and climate change
Assembling the numerous and varied elements of a new, clean energy ecosystem and integrating them to form a cohesive, interactive whole is essential if all the advantages and benefits of the transition to decentralized, “decarbonized” power and energy are to be realized. These benefits and advantages include greater energy reliability, resilience and security, as well as lower energy costs; zero in the way of net, new greenhouse gas emissions and dramatic reductions in power and energy-related environmental pollution, ecosystems destruction and degradation.
Technological innovation and commercialization is the pivotal driver of growth in distributed renewable energy and clean technology. The rapid pace of technological, clean energy evolution makes it more difficult to craft long-term strategies and investment plans, however. Complicating things further are shifting energy consumption levels and patterns, driven by and large by the rise of energy “prosumers” – residential and business utility customers generating and making use of electricity produced, and stored, behind the utility meter.
SB 100 could be considered the capstone for a series of pioneering, interrelated legislative and regulatory clean energy initiatives enacted by California’s government this year, as well as over the course of the previous decade and more. Earlier in 2018, the state instituted a change to its building code that requires all new residential construction to be equipped with solar PV generation capacity.
California’s 2019 Building Energy Efficiency Standards require solar power to be installed when new homes are being built. The new solar-ready building code could revolutionize residential solar in the US and drive total installed systems costs down to utility-scale solar levels, according to an analysis by Arizona State University energy security researcher Wesley Herche and solar energy industry specialist John Weaver, who is also an author at PV Magazine.
“Over time, California home buyers could see per unit prices drop to rates approaching that of some of the world’s largest utility scale solar installations ($1/W in the United States),” Herche and Weaver conclude.
California’s 2019 Building Energy Efficiency Standards also set new, demand-side, smart home connectivity and energy technology standards that will help balance and manage the variability of power generation inherent to renewable energy resources, such as solar and wind power, for example. It will also provide a big boost when it comes to sales and installation of “behind the meter,” residential battery energy storage systems throughout California, Freedom Forever’s Sumikawa says.
California clean energy and housing costs
California’s SB 100 and the 2019 Building Energy Efficiency Standards go well beyond solar power generation in setting the foundation for the development of a decentralized, digitized and “decarbonized” economy and society, Sumikawa told Solar Magazine. Both complement one another very nicely, she pointed out.
“The 2019 building energy efficiency standards require that all new homes built in California are equipped with solar PV generation capacity. The 100 percent clean energy initiative covers utilities and retail sales of electricity for both the residential and non-residential sectors…I think we’ll see stakeholders in these and other sectors collaborating to meet the technological and economic challenges that need to be resolved.”
Critics assert that complying with the 2019 Building Energy Efficiency Standards will add significantly to the cost of new homes in California, a state in which new home prices, as well as energy bills, are already among the highest in the US. Not so, SEIA’s Umoff says.
“We’ve heard that criticism, but the fact of the matter is that the new building code energy efficiency standards went through a thorough and rigorous analysis that showed they will result in significant energy savings and reduce the overall costs of powering homes. As the climate warms and we experience increasing extremes in temperature, it will become more and more important, and increasingly valuable, to control energy use in order to keep the lights on.”
“These distributed energy and energy efficiency resources will only become more valuable. People will save money over the life of these systems,” Umoff said. He pointed out that based on a 30-year mortgage, the California Energy Commission (CEC) estimates that complying with the new building energy code standards will add about US$40 to average monthly residential energy costs. More than offsetting that, consumers will save an average US$80 on monthly heating, cooling and lighting bills, however.
Freedom Forever’s Sumikawa agrees. “Achieving the new building energy efficiency standards will drive the cost of solar down – in particular the soft costs of solar, which can account for as much as 2/3 of total installation costs,” she said. “Overall, you could look at the cost savings over the life of a long-term home mortgage – homeowners save on electricity bills for lighting, heating and cooling over a period of say 30 years. And aside from the financial aspects, they play a part in combating global warming and climate change.”
Incentives for utilities to do more
Utilities have been the primary agents driving California’s renewable energy capacity and use higher and higher. SB 100 raises the Renewable Power Standard (RPS) for California’s three main investor-owned distribution utilities (IOUs) to 50 percent by 2025 and 60 percent by 2030.
Current Renewable Procurement Status:
Average Large IOU RPS Procurement
(PG&E, SCE, and SDG&E)
|Compliance Period 1||Compliance Period 2||Compliance Period 3|
|20% Requirement||25% Requirement||33% Requirement|
The pace at which California’s three largest IOUs have been acquiring new renewable, carbon-free capacity has been slowing as they draw close to meeting current RPS requirements, however. Solar and renewable energy advocates, as well as industry players, would like to see more done on the legislative and regulatory fronts to add momentum to the growth trend by providing utilities with incentives to do more.
A complementary bill introduced in the California state legislature along with SB 100, Assembly Bill (AB) 893 would have required California utilities to take greater advantage of the federal solar investment tax credit (ITC) and wind production tax credit (PTC) to procure some 2,500 MW of new wind and solar power capacity during the next four years. The bill failed to pass, however.
AB 893 also would have required the utilities to acquire some 1,750 megawatts of geothermal power over the next decade while also promoting use of “renewable natural gas” – organic methane collected from wastewater plants, garbage dumps, dairy farms and other sources. Two other biogas-related bills – SB 1440 and AB 3187 – did pass votes in the state’s legislature this session, however.
SEIA came out in strong support of AB 893 as well. “Unfortunately, we did not see it pass this year, but it’s probably not going away. We’re not taking advantage of the federal [solar] ITC and [wind] PTC as efficiently as we can.” It has been estimated that as much as US$143 million in utility ratepayer savings are being left on the table annually as a result, Umoff pointed out.
Arriving at opportune time
It’s estimated that some 10 GW per year of new solar, wind or other carbon-free power generation capacity needs to be deployed if California is to realize its goal of reducing greenhouse gas emissions 40 percent below 1990 levels by 2030, Umoff pointed out. “We really need to pick up the pace and realize the savings projected by CEC in its latest IRP [Integrated Resource Plan]. Doing so takes on even greater importance than ever in order to achieve SB 100’s goals,” he said.
“To make this great legislative victory [enactment of SB 100] a practical reality, California must begin taking steps now to deploy renewable energy on a wide scale,” SEIA’s Ross Hopper said. “Without serious near-term action, ambitious long-term goals will be hard to reach. Furthermore, AB 813, legislation to create a regional electricity market that includes California and neighboring states will help accelerate renewable energy deployment in California and other areas of the West.”
California’s SB 100 sets a new benchmark for policy frameworks critical to spurring rapid adoption of carbon-free energy resources and realizing greenhouse gas emissions goals, SEIA’s Ross Hopper highlighted. “But we cannot let up. To meet the state’s aggressive climate goals, we need to spur near-term procurement of large-scale solar projects. We look forward to working with California lawmakers and the California Public Utilities Commission on this pressing matter,” she said in a press statement.
California has 25 years to realize SB 100’s goals, Sumikawa noted. “We have a quarter century to get to that 100 percent carbon-free energy goal. The drive to innovate, to come up with new technologies that enable us to achieve that takes on even greater importance [in that light]. I don’t think the hurdles are high enough to stop us. It’s just a matter of time. We’ll be able to meet those goals, and that will influence all those around us. I’m sure that California is keen to see other states follow its lead.” comment