Billions in Federal Community Solar Incentives Could Slip Away if California Doesn’t Act Fast

Billions in Federal Community Solar Incentives Could Slip Away if California Doesn't Act Fast

Time is of the essence, as California stands at the cusp of an extraordinary opportunity in the field of renewable energy. With a federal program offering a total of $7 billion to support community solar across the nation, states including California have a tight 18-month window to initiate subsidies once the funds are awarded.

California’s Chance to Lead in Community Solar

For years, California has been at the forefront of the U.S. solar industry, except in the community solar market. The recent passage of the Community Renewable Energy Bill (AB 2316) has catapulted the state into a leadership position in this vital sector. This groundbreaking law aims to usher in grid reliability, resiliency, and electric bill savings through community solar and storage for over a million Californians. Notably, these benefits are targeted to reach low-to-moderate income (LMI) residents as well.

While 23 other states already have community solar initiatives where homes and businesses can tap into bill credits from community solar projects, California has lagged. Now, the program is becoming popular, especially among those who rent, live in apartments, or have unsuitable roofs for solar. Regardless of credit scores, any ratepayer can enjoy the financial benefits of solar power.

AB 2316 has set California on a path to redefine the community solar landscape, potentially unlocking new renewable energy capacity and trimming utility bills for more than a million residents, including LMI households. But there’s a catch: the electric bill savings and other advantages may vanish if the California Public Utilities Commission (CPUC) does not promptly approve a community solar program.

The Net Value Billing Tariff (NVBT) Proposal

The success of AB 2316 depends on its design and execution. Among various proposals, the Net Value Billing Tariff (NVBT), championed by the Coalition for Community Solar Access, stands out. A quick approval of NVBT by the CPUC would position California’s community solar initiative to tap into billions of additional incentives under the Inflation Reduction Act.

Here’s a closer look at why NVBT leads the way:

  • Fair Billing: NVBT ensures minimum bill credits of 20-25% for low-income subscribers, simplifying the process by consolidating savings on existing utility bills.
  • Accessibility: The proposal also eliminates credit score checks and termination fees for low-income subscribers, removing typical barriers to solar adoption.
  • Reliability & Job Creation: By requiring at least four hours of energy storage, NVBT addresses grid reliability issues and fosters new solar projects, potentially creating more local jobs.
  • LMI Customer Focus: With 51% of the capacity reserved for LMI customers, NVBT could generate even greater annual savings, especially if implemented in time to capitalize on extra benefits from the Inflation Reduction Act.

Urgency in Action

Community solar projects need time for development and construction. If CPUC approves NVBT this summer, developers will move quickly to initiate projects to secure incentives from the IRA’s Greenhouse Gas Reduction Fund, which earmarks $7 billion for states and local governments.

Failure to act promptly may see California miss out on these lucrative incentives, jeopardizing the state’s opportunity to lead in community solar. The stakes are high, and the clock is ticking. It’s a golden chance for California to set a precedent in community solar, but it demands decisive and swift action from all stakeholders, from legislators to regulators and developers. The window is short, and billions of dollars are at risk, but the rewards are profound and lasting. The road to a more sustainable, equitable, and prosperous energy future for all Californians is paved with potential. It’s time to seize the moment.

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