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California law requires rooftop solar on new homes. How the rule is already being tested

Sacramento Bee

Feb. 18--The Sacramento Municipal Utility District and clean energy advocates will square off at the state Capitol Thursday in what is being billed as a fight over the future of solar energy in California.

The Sacramento County electricity provider is asking state regulators to allow some home builders to opt out of the state's groundbreaking six-week-old rooftop solar panel installation requirement for new houses.

SMUD wants the California Energy Commission instead to approve a SMUD plan to produce power at a few new solar farms around Sacramento County and ship that power to new housing tracts, freeing those builders from having to install panels on house roofs.

The utility says its proposed Neighborhood SolarShares Program doesn't supplant the rooftop solar mandate, but is a legal alternative under the state regulations for builders of homes or low-rise apartments who find it too expensive or unworkable to mount solar panels on roofs.

The proposal is adamantly opposed by many in the solar industry and by some major environmental groups who call it an end-run around state regulations that will undermine California's still young rooftop solar effort, and will block many state residents from starting on the path to energy independence from utility companies.

The state's rooftop solar rule, which went into effect Jan. 1, covers most new housing going forward and is expected to be a focal element of California's effort to become a largely carbon-free energy state in the next two decades.

The California Energy Commission will meet Thursday to consider SMUD's request.

SMUD solar plan

The SMUD request only covers housing built in Sacramento County, SMUD's home turf, but energy experts say the commission ruling will set statewide precedent.

California's other major utility companies, including Pacific Gas & Electric, are expected to launch similar solar-farm based alternatives to rooftop solar, if the energy commission approves SMUD's proposal. PG&E is among utilities that have submitted letters of support for the SMUD proposal.

SMUD officials contend the drama is overblown. They argue that their proposal supports expansion of solar power in the state, just offers a different path. It gives home builders and buyers options for cheaper construction costs as housing construction has not kept up with demand.

The commission's regulations apply to most new housing under four stories tall. But the rules allow builders to avoid putting solar panels on roofs if the roof would be in the shade of trees or other structures.

In those cases, those houses must connect to a community-serving solar energy source, such as a solar farm, to be built nearby.

The energy commission has not, however, defined what it means by community or neighborhood solar sources, and how close they need to be to the new housing developments they service. State officials said they chose to leave the wording ambiguous so the energy market could figure that out naturally.

SMUD set off alarms in November when it submitted a request to the energy commission to allow it to provide solar to new Sacramento homes from an existing solar farm in Fresno, more than 100 miles away. The state energy commission shelved that proposal amid protests from solar and environmental groups.

SMUD has since submitted a revised proposal that promises to provide solar power only from facilities inside Sacramento County. The company also pledges to build enough new solar power farms locally in the next three years to produce electricity for its solarshares program, rather than use existing solar farms.

The utility company also rewrote its proposal to allow individual home buyers to opt for rooftop solar even if the subdivision developer signs a contract, good for 20 years, with SMUD for energy from a solar farm for some or many of the houses in the subdivision. SMUD points to a recent Legislative Analysts Office report that indicates utility solar farms have been, so far, a less expensive way generally for the state to meet its greenhouse gas emissions reduction goals.

"Builders can provide customers with choice of rooftop solar or our program when they are buying a home," SMUD executive Arlen Orchard said in an email to The Bee. "Our program is about providing developers and home builders with options to best meet the objectives of their project while still supporting the state's carbon goals."

The California Building Industry Association, the Natural Resources Defense Council and the California Municipal Utilities Association support the SMUD plan. SMUD also has support from 29 state assembly members and senators, headed up by Sacramento Assemblyman Richard Pan.

"We applaud the commission's leadership in helping shepherd California towards a clean energy future," Pan's group wrote in a letter to the CEC. "We appreciate, though, that the additional cost of rooftop solar systems may not be appealing to all prospective home buyers."

Cost of rooftop solar

The cost of a rooftop solar system may range from $10,000 to $15,000, according to EnergySage, a national aggregator of cost information from the solar industry. A CEC analysis found that the monthly energy savings over time from rooftop solar will be a net benefit for California home buyers via reduced monthly bills.

Builders in California also have begun offering financing options, including allowing home buyers the option to rent rather than purchase rooftop solar.

The SMUD plan is opposed by a large group of solar industry officials, including the California Solar & Storage Association, representing much of the state's solar industry, and the Solar Rights Alliance, a group that advocates for energy independence for individual residents. It is also opposed by some environmentalists, including the Sierra Club.

Advocates for rooftop solar say such installations are the first step toward an era of more consumer independence, where homeowners can buy solar batteries for their garages, allowing them to produce energy during the day when the sun is out, then store it in the battery for use in the evening. That allows them to avoid buying higher-cost evening electricity from the utility power-line grid.

A combination of solar on the roof and a battery in the garage also can insulate those residents from the power grid failures or shutdowns, an issue that has suddenly become a major talking point in California amid increased wildfires and PG&E pre-emptive gird power shutdowns.

Solar advocates say they believe the state regulations envision community solar as small arrays in the immediate community, not the industrial-sized program SMUD is proposing, where electricity would be shipped across county.

"SMUD's program works counter to California's resilience goals since the projects in the application are not located close enough to the community they serve," Lauren Cullum of the Sierra Club wrote in a letter to the energy commission. "The program will also disincentivize the installation of battery storage systems which can provide backup power during emergencies.

"This is a dangerous precedent to set during a climate crisis. In order for our communities to be more resilient, they need access to more reliable, affordable power for more people during outages."

Dave Rosenfeld, executive director of the Solar Rights Alliance, represents solar owners and users. His group opposes the SMUD proposal, saying he fears it will essentially prohibit homeowners from getting solar on their roofs if, when buying a house, they don't proactively opt out of the 20-year deals SMUD will be signing with some builders.

The state will need both rooftop solar and more neighborhood solar farms in order for the state to meet its carbon-free energy goals, he said.

"The bottom line is we are going to need utility scale energy and a ton of rooftop solar too. There isn't enough open space to do utility scale (solar farms). We have all these rooftops. It has to be all of the above."

The issue notably has divided some in the environmental community.

Several Sacramento advocates for "urban forest" tree shade canopies support SMUD's proposal, saying there are better places to put solar panels than on house roofs where they will require full or nearly full sun exposure, and no or minimal tree shade.

The new state regulations do include an exception for housing where trees block part of the roof. The rules reads: "No (solar panels are) required if the effective annual solar access is restricted to less than 80 contiguous square feet by shading from existing permanent natural or man-made barriers external to the dwelling, including but not limited to trees, hills, and adjacent structures."

Sacramento Tree Foundation founder and director Ray Tretheway, whose group has a tree-planting agreement with SMUD, supports SMUD's solar farm proposal, saying he wants to see builders in new subdivisions continue to have the ability to plant trees that will eventually grow over rooftops and provide shade.

"This is a big deal for the urban forest, a huge deal," he said.


(c)2020 The Sacramento Bee (Sacramento, Calif.)

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Gary Hilberg's picture
Gary Hilberg on Feb 20, 2020 11:05 pm GMT

This is very interesting, the lower cost option is the utility scale supply by SMUD but disconnects the end user from the potential long term benefit of being an owner, but also the risks of ownership - damage, failures, etc...  The suppliers like the high prices that the retails consumer pays, so who wins?  Would be good to see SMUD offer to produce more than the individual home minimum and provide some longer term price protections for this specific supply.  They seem to be matching specific projects to specific communities.  

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