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We’re coming up on judgment day for the nation’s most contentious and impactful solar battle. That would be a fight in California over how much to pare back compensation for rooftop solar. Regulators had been expected to vote later this week on a proposal to curb that compensation dramatically.
Even those of you beyond the boundaries of the sun-washed Golden State have a stake in this battle. California has built the nation’s biggest market for rooftop solar by far. A negative outcome for the rooftop solar industry would hit national installation numbers and send companies scrambling. It could also spawn copycat policies in states with more nascent rooftop markets.
Given the stakes, Canary Media is hosting a live debate Wednesday, January 26 between two leading commentators on the policy at issue, known as net energy metering or NEM. Register for free right here.
- Severin Borenstein, a professor at UC Berkeley’s Haas School of Business, has chronicled what he sees as a status quo that unnecessarily favors rooftop solar, channeling public support to a relatively expensive form of clean energy that directly benefits only a small slice of the population. He called the state’s proposed decision “a bold step toward a more rational climate policy.”
- Ahmad Faruqui, a veteran expert in utility regulatory proceedings, has written that he’s never seen a proposed regulation “as regressive and out-of-touch with reality as this one.” His 10-point rebuttal of the proposed policy change even earned a shoutout in actor Edward Norton’s recent Twitter thread in defense of rooftop solar.
That’s on the eve of the date the decision was originally expected, but the regulators appear to have pushed back their timeline — perhaps taking note of California Governor Gavin Newsom’s recent comment that “changes need to be made.”
This is our first live event directly responding to events as they unfold. I hope you can join us, and please let us know what you think about the debate.
Three ways to equitably expand access to solar power
One of the most contentious aspects of the solar net-metering proposal is that California could slap a fixed monthly fee on households that install solar panels in the name of fairness to less-affluent people. Lower-income customers would be exempt from the new fee.
Of course, if the goal is really to expand solar access across the income spectrum, imposing a new fee on some people’s solar systems doesn’t do the trick. Nor does waiving the fee for the subset of lower-income people who can find a way to put solar on their roofs.
Democratizing the benefits of clean energy takes a concerted effort — and an increasing number of people and companies are making that effort, outside of the regulatory realm. Here are three ways to broaden solar access that Canary Media has recently covered.
1) Build solar for people who can’t put it on their roofs
Impact investor Lafayette Square pledged last week to invest up to $550 million over the next three years to build community solar projects for low- to moderate-income customers. The partnership with renewable developer Invenergy is called Reactivate.
- Community solar projects offer the bill savings of solar to people who can’t put it on their own roofs due to financial constraints, not owning the building, or living in a multi-family structure.
- Reactivate will sign up customers, then buy or build solar projects to produce the electricity.
- Customers will get credits on their energy bills for the solar power produced by these community projects — a boon that would be especially helpful for energy-burdened families that pay a high portion of their earnings to keep the lights on.
Brooklyn-based startup NineDot is working on community-level battery projects in the New York City area. This model, like community solar, would allow individuals to subscribe to a project and see the benefit on their bills, even if they can’t install a battery where they live.
Private equity firm Carlyle Group invested $100 million last week in NineDot’s projects, which just might be enough to help projects navigate the Big Apple’s notoriously complex and lengthy permitting process for batteries.
2) Offer rooftop solar regardless of FICO score
Louisiana-based PosiGen leases solar to lower-income people regardless of their credit scores. By packaging solar with home-efficiency upgrades, it delivers substantial enough energy bill savings that PosiGen doesn’t worry about customers having enough cash to pay for the service.
That unconventional model scared off plenty of investors early on. But with 11 years of operations and 19,000 customers to its name, that’s changed. PosiGen just raised $100 million in equity financing to expand its business in Mississippi and Pennsylvania and enter new markets in Illinois, Massachusetts, Missouri and Washington, D.C.
It’s a proof of concept that solar economics can work for lower-income families if solar companies muster sufficient creativity and discipline.
3) Put solar on apartment buildings
If you rent an apartment unit, you can’t just stick solar panels on the building roof. It’s not your roof. And the landlord typically won’t go out of their way to lower your utility bill.
This dynamic bars millions of people from accessing clean energy in their homes. A company called PearlX says it can fix that.
The startup pays landlords for the right to install solar and batteries, then uses the equipment to supply power to the tenants. Like PosiGen, PearlX doesn’t want to restrict its services to people with high credit scores. Instead, it looks at occupancy rates: If a sufficient proportion of units are occupied, the company will earn enough revenue to pay for the solar installation. PearlX can supplement what it earns from tenant payments by participating in wholesale power markets.
PearlX has directed $50 million toward turning this idea into reality, and it’s starting with a single apartment building in Houston, Texas, where the competitive ERCOT electricity market offers companies many ways to earn an extra buck. But the $50 million should support up to 3,000 apartment units getting solar and batteries.
Julian Spector is senior reporter at Canary Media.