There it is, below: my favorite image of people working in silos. Unfortunately, you may see a similar image in your own community—or in any organization that is striving to succeed with community solar-plus. CSVP has led a gentle, persistent campaign to move all the folks needed for these highly integrated solutions out of their silos and into more effective and fast-acting collaborations. We have some resources for that in our existing toolbox. But lately we’ve recognized the benefits of adding one more set of wrenches, i.e., policies.
If you attend SPI, look for the poster that CSVP principals co-authored with Achyut Shrestha of North Carolina Clean Energy Technology Center (NCCET) and Marta Tomic of Vote Solar. We take on the question, how fast can the community solar industry respond to the increasing need for projects that offer integration value, as well as shared solar? The answer lies for the most part in policy.
1. Less favorable net metering policies for community solar or customer-owned systems persist, and there is little if any guidance for solar plus storage;
2. Lack of standardization in procurement methods for energy storage systems, especially with regard to establishing complex multi-partner storage-operation contracts;
3. Full requirements wholesale power contracts for COUs often limit the local utility's ability to generate their own energy or to hold PPAs. At the same time, many wholesale suppliers are reluctant to provide local DERs;
4. COU’s represented by G&Ts or joint action agencies must revisit agreements to promote both innovation and equity among members.
Notice that none of these has much to do with a need for technology innovation. The closest we come to a missing technical link would be to improve the operation (perhaps standardization?) of storage operating software, so utilities could more readily integrate battery storage with existing DR programs. Tech wizards I have not met yet are probably out there shrugging. “Sure, we can do that.”
But the rest of these barriers have to do with policy. For example, here in New Mexico, I met last year with a team that was drafting community solar legislation. We agreed that allowing community solar to co-locate with storage would be forward-looking for utilities and stakeholders. But if the community solar developer were a private "third party," then more guidance would be needed in order to work with the utility. Would the arrangement affect the community solar "share" value? Virtual net metering, using time-of-use rates or incentives, could be part of that answer. But, diving deeper...? These are complicated questions. Alas, that legislation did not pass last session, but it will come up again.
According to Vote Solar, states like Massachusetts and Hawaii have recently taken steps to provide additional value for community solar plus storage. Under the Solar Massachusetts Renewable Target Program, co-located energy storage that meets performance requirements receives a $0.045 cent per kWh storage adder. Hawaii encourages community solar to be interconnected with a range of DERs to deliver 85% of the system's output during on-peak times from 5 to 10 pm. In exchange for meeting minimum performance requirements, these facilities can earn a Peaker Credit Rate via a clearing price auction. For states like Hawaii that have high penetrations of renewables, it is critical to develop policies to incentivize dispatchable power at times of peak grid demand and to discourage solar over- production. Additional incentives could be provided for aspects of strategic siting and design, local resiliency, and community empowerment. In coming months, more policy innovation in leading states could provide examples that state regulators and local utility boards can follow.
Why does it matter? Utilities are already acquiring a tremendous amount of storage, largely without the community solar element. In Q1 of 2019, the amount of utility energy storage was 5 times that acquired in Q1 the year before. But the utility’s focus can be narrow. Based on price alone, centralized solar-plus or even batteries disassociated from solar may appear to be the top choice. The aforementioned community-based DER benefits need policy support—at least until more of these benefits are accurately and routinely monetized under regulation. Community solar represents a force to preserve interest in local solar; it has been credited as the major force behind commercial solar growth the past several years. Once regulators and utilities start to work across silos—even if required to do so—they can unleash more value in the synergies associated with community solar-plus.