Looks like California’s going to be getting a whole lot of solar power soon. After a year of discussions, the California Public Utilities Commission on Thursday not only approved Southern California Edison’s 250-megawatt rooftop solar project -– but doubled it.
To jog your memory, the Rosemead, Calif.-based utility announced the ambitious project to install solar power on commercial rooftops, which it plans to rent in power-hungry areas in Southern California, in March of last year. The plan represents SCE’s first direct investment in renewable generation in more than a decade. Even the previous program was to be 10 times the size of any other distributed-generation project in the country.
The decision is exciting for the solar industry because it “absolutely validates” the value of distributed generation for the grid, said Adam Browning, executive director of solar advocacy group Vote Solar. In the decision, the commission wrote that the added value of having electricity generated where it’s used — reducing line losses and eliminating the need to build new transmission facilities — justifies a higher price for this electricity. “This is really precedent-setting,” Browning said. “It shows that solar has come of age and that new solar generation really can be counted on to keep the lights on.”
The decision also helps settle heated controversy about solar ownership. A federal law that took effect in January allowing utilities to take advantage of solar tax credits for the first time led to several utilities –- including SCE, San Diego Gas & Electric and Pacific Gas and Electric (s pcg) –- proposing their own solar projects to meet the state’s renewable portfolio standard. SCE originally proposed owning the whole project, saying that it was focusing on installations that weren’t of interest to independent developers and that the high volume would enable it to get lower costs than those developers. But solar insiders opposed the idea, saying they believed open competition would generate the lowest prices.
The commission resolved the issue by splitting the project in half, with 50 percent to be utility-developed and owned and 50 percent to be completed created via independent power producer bids. It then made the project larger to ensure that SCE could get the same economies of scale it had originally anticipated.
Solar insiders also see the decision as a step forward in their argument for more net metering in the state. Net metering enables solar customers to feed excess electricity into the grid, which runs their meters backward, reducing their electricity bills. California has a net-metering limit of 2.5 percent and PG&E is approaching that cap, meaning that solar installations are in danger of grinding to a halt if the limit isn’t increased. Browning explained, “It would be highly hypocritical of any policymaker or [SCE] to say it’s a good value to ratepayers to buy this electricity, but we shouldn’t allow people to net meter, when that gives them the same benefits at tremendously lower costs.”
Using thin-film panels from First Solar (s FSLR), SCE installed the program’s first roof in December, and in March began its second installation, expected to be completed by August. SCE also said it expects its third project to come online by the end of this year.
The utility said Thursday it plans to immediately begin ramping up rooftop lease, supplier and contractor solicitations to reach 50 megawatts of installations per year, and also plans to begin a solicitation of independent proposals right away.