By Bernadette Del Chiaro, Solar Industry Magazine
As Solar Industry changes from print to online-only, I think about other changes to our industry over the years.
Not long ago, most of this did not exist. And, if we aren’t careful, if we don’t aggressively and collectively invest in public policy to support the continued growth of local solar and storage, much of it could be taken away. Yes, even in California.
Back in 2002, when I first started working on solar policy in Sacramento, most of the big names in the industry today were not even a glimmer in the entrepreneurial eye. There were some important players, of course – SunPower, AstroPower and PowerLight, to name a few, as well as many of the founding members of the California Solar Energy Industries Association (CALSEIA) that make up the backbone of the local solar industry.
The pioneers of the PV industry, who will gather one last time for the Third and Final Solar Pioneer Party in Mendocino County in November, started tinkering with PV and inventing the industry in the backwoods of northern California in the late ’70s. And for this, we are all forever grateful. But the engines of commerce that put solar into the hands of everyday California consumers did not get started in earnest until 2002.
In 2002, everything changed. In fact, that year marked the dawn of the modern era of the California solar industry. What happened in 2002 was that policymakers were spurred into action by the Enron-made electricity crisis of 2000/2001. Due solely to the criminal actions of manipulative and monopolistic energy companies, California businesses, consumers and cities lost billions of dollars, suffered great social and political upheaval (for example, Gov. Gray Davis lost his job), and voters were simultaneously angry and fearful that it could happen again – two powerful motivators of political action.
During this time, not only were voters and politicians motivated to make change, but also the utilities had yet to invent the concept of “cost shifting” – the notion that all local solar is an inherent burden on other ratepayers. Instead, the best arguments they had at the time were that solar was too expensive and unreliable.
What’s more, during this time, most policymakers understood that electricity, an increasingly critical commodity, was best generated and controlled locally (as opposed to in corporate board rooms of profit-minded companies) and that empowering citizens to own their own energy, creating competition in the marketplace, would help prevent future Enrons from repeating the sins of the past.
And so, California policymakers began a new era of embracing self-generation and alternative energy. Individuals, local governments, and businesses that invested in their own solar systems were heroes and warriors, “sticking it to the Enron-man,” and helping everyone avoid another blackout. These early adopters were not burdens on society, as utilities today like to characterize it. The California Public Utilities Commission (CPUC) even published a paper showing that for every dollar invested in local solar, three ratepayer dollars were saved in fuel costs alone. That’s a pretty good return on investment for the ratepayer. Environmental groups, including my organization at the time, Environment California, saw opportunity to make California a solar leader, pushing for big, concrete policy ideas.
Thus, in the four years that followed the electricity crisis, California passed several landmark bills, including the first renewable portfolio standard (S.B.1078), set at 20% by 2017, and the first comprehensive local solar policy (S.B.1), also known as the Million Solar Roofs Initiative, expanding net metering and solidifying a 10-year, $3 billion incentive program. (The first legislation authorizing Community Choice Aggregation was also passed during this post-Enron era via A.B.117 by Assemblymember Carole Migden, and in 2007 – riding the heels of this momentum – we were able to pass A.B.1470 by now-U.S. Rep. Jared Huffman to give continued life to the solar heating and cooling industry.)
It is hard to imagine today, but at the time of the electricity crisis, there were only 20 MW of local solar electric systems on roughly 6,000 rooftops, as well as only one or two experimental solar thermal plants in the desert. Daniel Sullivan of Sullivan Solar Power was a journeyman electrician down in San Diego pitching solar to his employers at the time, but they didn’t want to touch it, and Elon Musk had only just become a U.S. citizen. So much has changed.
Motivated by economics and energy independence, consumers doubled their consumption of local solar year over year, and by 2006, when S.B.1 passed, there was roughly 300 MW installed. By the beginning of 2008, when Solar Industry published its first print edition, local solar had become a 500 MW market with a healthy growth trajectory, thanks to the certainty provided by state and federal policy, including the investment tax credit, as well as a promising international market.
Did everyone in the solar industry like the idea of creating a 10-year-long incentive program via S.B.1? No! There was, in fact, dissent among industry players. Some wanted to simply let the market grow slowly so as to not invite too much competition. Some thought growth-oriented international markets would lower hardware and installation costs here in California without any further intervention at the local level. Some simply didn’t like government involvement at all.
And then there were the real opponents to the idea and to solar and storage, in general: the utilities and their local International Brotherhood of Electrical Workers (IBEW) union. Packing the same one-two punch that this duo wields today, this unified force single-handedly killed S.B.1’s predecessor two years in a row. These powerful defeats were not due to clever arguments against solar, but rather sheer political might.
At midnight on the last day of the 2005 legislative session, frustrated and exhausted from nine months of campaigning, I was quoted in the media as saying, “Not air pollution, nor blackouts, nor soaring energy costs were enough to elevate the Million Solar Roofs bill above the politics of the day.” Sound familiar? Just replace “air pollution” with “climate change” and “blackouts” with “Aliso Canyon,” and you have a ready-made quote for the energy storage bills that failed to, in the case of S.B.700, even get a hearing in the state assembly this year.
In fact, back in 2005, there was such stalemate in Sacramento that then-Gov. Arnold Schwarzenegger had to circumvent those intractable politics and direct the CPUC to create the multibillion-dollar incentive program on its own.
After this move, legislation was still needed to expand net metering, mandate similar programs at the publicly owned utilities, and jump-start solar on new home construction, but the most controversial part of the bill – the money – was defanged by the CPUC pre-emptive action, and S.B.1 sailed to the governor’s desk relatively easily in 2006, the same year A.B.32, the well-known climate change law, passed.
Interestingly, despite all of the excitement over solar energy, it took another six years for the utility-scale solar market to catch up and surpass the local solar market. In 2013 – two years after the state passed its third iteration of the renewable portfolio standard, upping the mandate to 33% by 2020 – California saw utility-procured solar go from 500 MW to 3,000 MW nearly overnight.
Today, California policymakers still hold the key to the solar industry’s future. A few short years from now, thanks to changing time-of-use (TOU) rate structures and net metering successor programs, it will be nearly impossible to install a solar electric system without an accompanying energy storage device. Yet, the number of storage devices sold in California today matches that of the solar market circa 2004. We have a long way to go on storage to marry it with solar cost-effectively for a mainstream market.
This fact bears repeating: Local energy storage today is where solar was in 2004. We have a long way to go.
A critical question we must ask ourselves now is whether the solar and storage industry, in just a few short years, will be able to lower prices, achieve economies of scale in both production and installation, and realize the same hand-over-fist growth that solar enjoyed during the previous decade without something akin to S.B.1 for storage. History would suggest certainty and market rules are needed. And, besides, that’s a lot to gamble.
Let’s be honest with ourselves. It isn’t hard to envision growth when the storage market is a mere 100 MW per year. But expecting continued and sustainable growth, free of damaging fits and starts and commensurate with what California has come to expect of its solar market? That seems like a heavier lift than a market based on “preppers,” “techies,” and C&I demand charge arbitrageurs can sustain.
The fact is that California’s solar market grew from 500 MW to 5,000 MW in 10 years. It was built on a consumer base (650,000 strong) much deeper and broader than blackout- and demand-charge-triage seekers. My favorite fact and a testament to the maturity of the market is that there are twice as many people with a solar system in oil-rich and conservative Bakersfield than in liberal, tech- and eco-friendly San Francisco. And, although we are not yet at a million solar roofs (let’s hurry up and get there, already!), we are on pace to surpass three-quarters of a million consumers with their own solar systems, totaling nearly 7 GW, in the next 12 months. None of this would have happened without clear, intentional, long-term public policy initiatives.
And what about our opponents? Well, some things never change. The utilities and their affiliated IBEW locals are once again leading the anti-local storage charge, claiming that they can do a better job building California’s modern electricity infrastructure and should, in fact, own and install everything through legislative fiat. Earlier this year, they killed S.B.700 and A.B.1030 – bills that would have guaranteed California could build a mainstream local storage market, thereby addressing the duck curve and giving consumers TOU rate relief.
As I write this article, CALSEIA is preparing to celebrate 40 years of service to this industry. What the next 40 years have in store is anyone’s guess, but this brief era of consumer-driven local solar is but a blip in our collective energy history. Nothing should ever be taken for granted, especially in the dog-eat-dog world of energy markets and the special-interest-driven world of politics.
We’ve come a long way since 2002, and we have a long way to go to reach true market saturation. Congratulations to
Solar Industry for helping cover this journey over the past 10 years. Here’s to another decade of coverage of this industry, with all of its ups and downs, twists and turns. There is one thing that is certain: None of us would be doing this if the future didn’t look bright for solar and energy storage.