In February, the Biden Administration laid out plans for ten years of tax credits and an approximately $7 billion investment in residential and community solar projects under the Inflation Reduction Act. VX News interviewed Derek Chernow, the Western U.S. Regional Director for the Coalition for Community Solar Access for insight into the benefits that community solar + storage offers small businesses, renters, and low-income households as well as impending rulemaking coming from the California Public Utilities Commission and how it will impact the rate of deployment of community solar in the state.
Derek, share the Coalition for Community Solar Access’s current mission and the scope of your work as its Western US Regional Director.
Derek Chernow: The Coalition for Community Solar Access, or CCSA, represents over 115 companies across the nation working in the community solar space, which is one of the fastest-growing segments within the renewable industry, which is still the fastest-growing renewable sector. At CCSA, I am the Western Regional Director, which means I am working to expand community solar access across the West, including California, Oregon, Washington, and Hawaii. We're working on putting together policies and regulations that make it favorable to take advantage of this opportunity called community solar in those places.
Elaborate on what Community Solar is and is not.
It's not residential rooftop residential, which requires you to own your home or have a good credit score, and it's not utility scale which is located far away on hundreds if not thousands of acres of land.. They're mid-sized projects located within a community where multiple customers can subscribe and receive credits on their utility bills for their share of the power that is produced, just as if the panels were on their own roofs. It's ideal for small businesses, renters, and low-income households. It's also a wonderful opportunity to take advantage of clean energy and see some bill savings at the same time.
Re unlocking the potential for Distributed Energy Resources (DERs), what are the policy incentives and laws that encourage DERs and what are the obstacles to its growth?
Twenty-two states and Washington D.C. have laws in place that allow for community solar. Last year, we passed a law in California, Assembly Bill 2316 (Ward), which really was a terrific piece of legislation that sets the bar for other states throughout the country. The bill requires 51% of the energy for each community solar project to go toward low-moderate income customers and each project is incentivized for the energy based on the time it’s produced and the value it brings to the grid. We are now in the rulemaking process at the Public Utilities Commission here in California, and we're hoping to have it wrapped up by summer of this year and then shovels hitting the ground in 2024 on community solar projects.
What precisely does the Coalition for Community Solar hope to secure from the California Public Utility Commission’s rulemaking?
The Public Utilities Commission needs to fill in those gaps laid out in Assembly Bill 2316. The bill laid out what the criteria were. It called for 51 percent of the projects to serve low-income households. It called for community solar to fulfill requirements under Title 24, which it will. This includes a few other things like including prevailing wage during projects.
Now, we have proposed what the program rules would look like and now the Public Utilities Commission is going through that process to adopt those.
Elaborate.
Really, it is a net value building tariff. It's what makes these projects pencil out, not just for the developers, but for the subscribers of the community solar and all ratepayers in the State. When we say community solar in California, we really are saying solar plus storage so that those projects will dispatch during peak hours. Those rules will be spelled out in the PUC rulemaking process more specifically. Community solar is ultimately democratizing solar energy!
With California's regulatory decisionmakers pulling back a bit from net-zero policies, how impacted is your Coalition’s agenda?
We were encouraged during the net energy metering docket at the Public Utilities Commission because the commissioners took community solar essentially out of the NEM docket and put it into a separate docket. What they're really saying is they are evaluating the community solar programs currently in place in California separately. If they're not working, they're going to get rid of them and then institute one that does work. We believe the proposal that CCSA meets all the criteria laid out under AB 2316 and are pleased it is in a separate docket focused solely on community solar. That's the one that the CCSA has proposed, but it's in its own separate docket at this point. They've gone through a public workshop. We're going through the testimony phase now. Again, hopefully this will all be wrapped up soon.
To follow up, address the CCSA’s challenges to achieving its aspirations.
I think a lot of it was, in California, just getting that bill over the finish line last year. We've had community solar here in California and, frankly, it hasn't lived up to its billing, no pun intended. It really hasn't seen the uptake it could. It hasn't seen the benefits to the low-income households that it could. It hasn't seen these things that community solar has provided in other parts of the country here in California.
Now with the Public Utilities Commission having the authority to jettison those programs that are not working and then institute a new clean energy renewable program, we're hoping to finally see California go from very little community solar to the leading community solar state in the country within two short years. Under our estimates, we can add a gigawatt of community solar plus storage on our grid within two years here in California.
Address the capital needs and success to date, both from public and private sources, of Community Solar project developers.
Tere's been a lot of financing for community solar projects around the country. I think what we've seen in other states, once the rules are in place, if the regulations make sense, if they're fair, if they're consistent, then the companies are ready to go. Like I said, we have over 115 companies at CCSA and they're ready to leverage their human and financial resources here in California and put people to work.
Pivoting, have you engaged in other western states, like Oregon and Washington and Hawaii. What can California regulatory leadership learn, if anything, from these other states?
That’s a good question. We had a bill introduced in Washington State this year – HB 1509 – which was put on hold until next year. We need to give it some more time for people to review it and get acclimated to it, but Governor Inslee has been a big supporter of community solar so we’re confident we can get something done there. There is also a program in Oregon, but it's a smaller program that's been kind of incremental, with a number of barriers in place that we hope to alleviate in the years ahead.
I think what California is learning from these states is what have been some of the barriers to full scale rapid deployment of community solar. Now with our proposal here, we have a chance to get through some of those barriers and really go from a sliver of community solar to being the leading state in the nation.
You have focused here on the CPUC, but do the CEC and CAISO have a role in getting to your goals?
There is, again, a policy alignment among the Governor's office, the Energy Commission, and the Public Utilities Commission. I think they're really working hand in hand now. The Governor signed Assembly Bill 2316 as part of his climate change package in September of last year. We were very encouraged by that.
We've been in regular conversations with the Energy Commission, who really need to see opportunities like community solar plus storage to take the place of these peaker plants and take the place of natural gas-fired facilities that we've grown accustomed to in California. Community solar plus storage has an opportunity to blossom and take the place of some of these previous things that weren't quite as environmentally friendly.
Now we've got a chance to do this on the distribution side of the grid, which is favorable to a quick deployment. We can do it on rooftops. We can do community solar on farms, on landfills, and on brownfields. There's really a tremendous amount of opportunity here in California. We think that the Commissioners at both the PUC and the CEC are recognizing what this can bring to the table.
Do the mature rooftop solar and commercial solar companies look with favor on what CCSA is doing in the policy arena and energy market?
For CCSA, many of our members are also engaged in rooftop residential., commercial, or industrial – or at the utility scale. They've got projects across the board, but they really see community solar as a burgeoning part of their business opportunity. It’s a way to leverage their resources to reach even more customers. They can reach low-income households, small businesses, religious institutions, and schools, for example, who haven't had access to community solar in the past. They see this as a wonderful opportunity now to engage in that amongst the other parts of their businesses.
Lastly, a quick Google Search affirms that you’ve had an interesting career – including working as Chief of Staff for State Senator Bob Wieckowski, who was a thoughtful senator who actually read his legislative bills and COP briefings, and consistently embraced environmental policy challenges of both the state and the globe. Share your career arc with readers and how it prepared you for CCSA leadership.
It's been a tremendous career for me and one that I've been very fortunate to engage in. My background is half political and half energy and environment related. I've run nonprofit environmental groups; I've run the State Department of Conservation; I’ve run a green financing authority in the State Treasurer's Office. I also had a chance to serve wonderful elected officials like Senator Wieckowski. During our time together, we were fortunate to have been to a number of VerdeXchange conferences, in Los Angeles, and COP conferences across the globe.
It's been a tremendous opportunity that's led me to this point here with CCSA and to be at the forefront of this remarkable service called community solar that we're engaged in. With the passage of the Inflation Reduction Act at the federal level, plus with what we're seeing across the states, I feel like I'm joining an exciting time for community solar.