It was “everyone against the utilities” in California earlier this month as the push to secure a new payment structure for community solar entered its final stretch, carrying the potential to make the state a sector leader while reducing energy poverty and climate emissions.
“A sprawling coalition” of solar industry groups, consumer advocates, environmental justice organizations, labour unions, and the homebuilding industry has been urging the California Public Utilities Commission (CPUC)—the agency that regulates utility companies—to approve a new payment structure plan for community solar called the Net Value Billing Tariff (NVBT), reports Canary Media.
“As the state comes up on a September 26 deadline to apply for its share of US$7 billion in federal community solar grants, the coalition is pressing the CPUC to lock in the NVBT program—and not allow it to be derailed by arguments from utilities Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison,” the news story states. The utilities say community solar must be treated like larger-scale generators that have to follow different rules and are overseen by the federal government—not like rooftop solar, batteries, electric-vehicle chargers, and other distributed energy resources connected to the low-voltage distribution grid.
“On community solar, it’s everyone versus the utilities,” said Brandon Smithwood, senior director of policy at community solar developer Dimension Renewable Energy.
Should the CPUC rule in favour of the NVBT proposal, it would be a game-changer for community solar in California. Analysis shows the tariff could enable about eight gigawatts of community solar paired with batteries to be built in the state using existing grid infrastructure, progress that would move California into the company of heavy hitters like Colorado, Minnesota, and New York State.
“That’s far from the estimated 13 gigawatts of rooftop solar installed in California to date,” says Canary Media. “But it’s a big jump from the less than 600 megawatts of community solar developed in California so far under a panoply of programs.”
NVBT determines how people who participate in community solar projects get compensated for the energy they generate. Instead of a fixed payment, NVBT ties compensation to factors like how much a project helps the grid during times of high demand or stress.
Another important feature is that NVBT puts no caps on how much capacity can be built, opting instead for “an open-ended set of rules for how much money project developers can expect to make over the coming decade.” Such regulatory flexibility is intended to appeal to potential developers and financiers of community solar who might otherwise be reluctant to sign up for a long haul.
The tariff is also purpose-built to respond to CPUC’s “broader push” to ensure all new solar comes equipped with batteries “to help the state balance an increasingly solar-saturated grid.”
“I’ve joked we should call it community storage plus solar,” Smithwood said, flipping the emphasis from solar to batteries.
Environmental justice advocates are strong backers of NVBT because it would “open up the benefits of solar—namely cheaper, cleaner power—to Californians who can’t install solar panels on the roofs of their homes,” either because they can’t afford the panels or because they are renters with no control over landlords’ decisions. Such households could subscribe to a share of a project’s energy output and use the revenue to offset their utility bills.
NVBT could also spell the end for polluting and expensive fossil-fuelled “peaker plants” that California still relies on to stabilize its grid—and which are “predominantly located in lower-income areas and communities of colour.”
NVBT-supported community solar will also help California meet the CPUC’s order that state utilities and community energy providers together procure “a massive 85 gigawatts of new clean energy capacity by 2035, more than double the generation capacity on its grid today,” Canary Media writes.
Due to bottlenecks in getting utility-scale solar, wind, and battery projects connected to the grid, utilities are already struggling to meet the CPUC’s 2026 target of 11.5 gigawatts. Community solar+storage projects are ideally positioned to help with this problem as they connect directly to lower-voltage distribution grids and can be sited anywhere, due to their small size.