Net Value Billing Tariff gaining momentum to drive California community solar implementation
The Net Value Billing Tariff (NVBT) proposal being circulated in the California Public Utilities Commission is starting to gain momentum as a means to implement the state’s community solar program.
Seven months following the passage of AB-2316, CPUC is presently evaluating community solar programs and establish a drive for more development and is hearing testimony from utilities and various stakeholders until May.
NVBT calls for an uncapped program that allows projects up to 20 MW. The proposal requires all projects have a 4-hour battery storage system and a 51 percent low-to-moderate income subscriber base.
The tariff design, sponsored by the Coalition for Community Solar Access (CCSA) and its stakeholders is similar to the program in New York and also the only proposal consistent with the guidance laid forth by AB-2316.
“That is the biggest requirement in the country—no other state has 51 percent,” said Derek Chernow, CCSA Western Regional Director, in an interview with NPM. “While we’ve led the nation in rooftop residential solar, there’s been a large segment that’s been left out of this clean energy evolution.”
While the program allows projects to be built up to 20 MW, Chernow said that developers will likely stick to 5 MW to take full advantage of federal tax credits and avoid interconnection constraints.
NVBT also sets a 25-year bill credit term with monetary credits and allows projects to bank unsubscribed credits and allocate them to subscribers within two years of generation. Subscribers must reside in same utility-service territory as project and receive a simplified billing concept which allows subscribers to receive a portion of their bill credit on their monthly utility bill while the utility remits the balance to the project owner. Subscribers will not have a contract duration and no termination fees for LMI subscribers. NVBT also prohibits credit score screening for LMI customers.
If the PUC adheres to their deadline, and so far, they’ve done a wonderful job keeping this docket moving and progressing, we anticipate a final decision this summer with shovels in the ground next year,” Chernow said.
“Our industry analysis is that California can achieve a gigawatt within a couple years—that's how fast it’s going to blossom in California. We’re going to become the leading state in the nation in just a few short years.”
The CPUC has until July 2024 to establish the new program.
The growth story…
Signed into law last September, Assembly Bill 2316 (AB-2316) directed the California Public Utilities Commission (CPUC) to evaluate existing community solar programs and establish a new program that would drive more development.
Up until this point, California's existing programs, the Green Tariff Shared Renewables Program (GTSR), the Disadvantaged Communities Green Tariff (DAC-GT), and Community Solar Green Tariff (CSGT), have only delivered 163 MW over the last several years, according to the CPUC.
“There’s still the opportunity for utilities to put together some rebuttals that might influence what the ultimate program looks like, but I’m pretty optimistic that they are not going to be totally obstructionist given California’s long history in fostering net-metering and distributed generation,” said Kristina Shih, partner at Segue Sustainable Infrastructure in a separate interview with NPM.
Segue is ready to act once a program is in place.
“We’re interested in providing developers with capital to fund their project pipelines and are differentiated from other capital providers with our collective team experience as developers ourselves,” Shih said. Their typical investment size ranges from USD 2m to 20m and they're looking for partners to start the process.
As the industry waits for official guidance, Shih said developers should keep a few things in mind about California, such as stricter environmental protections and costly land.
“Developers are hesitant about putting real dollars at risk in building a development pipeline bare concerned with rules changing on them, because a lot of people have been burned through policy changes,” Shih said. “To underwrite the early development risks when the rules aren’t written yet can be daunting for developers because an initial portfolio of projects could end up requiring you to set aside USD 10-15m of development expenses that are subject to very early-stage risks."
*This story was originally published exclusively for NPM subscribers last month.
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