Community solar developers react to CPUC rejection of NVBT proposal

The California Public Utilities Commission (CPUC) proposed decision on California's community solar program has dashed the hopes of developers across the county who have waited years for the proposal, which several sources tell NPM will hinder community solar advancements in its current form.

“The CPUC's decision to favor Southern California Edison's (SCE) feed-in tariff over our Net Value Billing Tariff (NVBT) proposal not only jeopardizes California's clean energy objectives but also hinders the development of a robust program,” Trevor Laughlin, Senior Analyst, Policy and Regulatory Affairs with Standard Solar, told NPM.

“By gravely misinterpreting federal regulations and impeding community solar projects, this choice undermines both state and national efforts toward a sustainable energy future. We urge the CPUC to reconsider and align with the vision of scalable community solar programs," added Laughlin.

The proposal, which came Monday, sought to "modify and streamline" the state's existing Green Access Program tariff, leaning towards components of a program proposed by SCE. The Coalition of Community Solar Access's (CCSA) NVBT tariff, backed by a slew of developers, trade groups, and environmental advocates, was said to conflict with federal law and not meet the requirements of Assembly Bill (AB) 2316 under the proposal. AB-2316 directed the CPUC to examine the state's existing program and implement a program that served at least 51 percent of low-income households.

The proposal is not a final verdict and has no legal effect until the Commission votes to approve it. Parties have 20 days to submit comments on the proposed decision. After comments have been submitted, a revised proposed decision will be issued, and the Commission will vote on whether to adopt the proposal, at the earliest, during the Commission’s April 18 business meeting.

Lilly McKenna, an attorney with the law firm of Stoel Rives, explained to NPM that CPUC argued that the NVBT violates the Public Utility Regulatory Policies Act of 1978 (PURPA) because it finds that community solar projects would be providing wholesale energy rather than retail since they are front-of-meter and do not serve on site load or proximate load. Additionally, the projects would not, and do not qualify for the PURPA exemptions being below 20 MW and receiving compensation at the avoided cost value.

“If adopted without modification, the proposed decision would hinder community solar development,” McKenna said.

Derek Chernow, Western Regional Director for CCSA, in a statement said that the CPUC had a significant opportunity to take a major step forward to position California as a national leader on community solar development but missed the mark entirely.

“The proposed decision’s assertion that CCSA’s NVBT conflicts with federal law manages to both misinterpret federal law and our proposal and ignores precedent that has been set by states deploying community solar for more than a decade,” said Chernow.

Chernow argued that the state cannot meet the Department of Energy’s (DOE) clean energy and equity goals, which challenges the community solar industry to meet a target of 20 GW by 2025 with the proposed decision.

Private developers, operating under similar models to the NVBT, have installed more than 6.6 GW of community solar capacity in more than a dozen states across, Chernow added.

Katie Kavanaugh, DSD Renewables Community Solar Acquisition Manager, echoed others stating that the proposed decision represents a significant missed opportunity for solar development in the state and said that the rejection of NVBT was astounding considering the extensive industry support it received.

“It is important that a community renewable energy program not impose a cost burden on nonparticipating ratepayers,” Kavanaugh said. “However, the CPUC's proposed decision does not appropriately consider the value of distributed energy resources (DERS). One of the most exciting aspects of the NVBT is it would enable the development of substantial amounts of solar paired with energy storage, which would improve grid resilience and help the state address its costly peak demand periods in late summer afternoons and evenings. The CPUC's proposed decision does not adequately address this.”

“As it stands, the proposed decision issued by the CPUC represents a dangerous precedent that will undermine the growth of the clean energy industry both in the state and across the country,” Kavanaugh added. “The CPUC must reconsider this proposed decision and issue solutions that will create a viable state-wide community solar program that will promote development and benefit residents for years to come.”

Green Lantern Solar’s Vice President of Development and Chief Legal Officer, Dave Carpenter, told NPM that it is disappointing to hear a state like California make a terrible policy decision.

“As other states often look to California as a historic leader in the realms of environmental law and renewable energy, it does make me concerned, but I am confident that even this bad news can’t slow the growth of renewable energy,” Carpenter said.

*This story was originally published exclusively for NPM subscribers last month.

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