Community solar and storage is an approach to building renewable energy infrastructure which has gained considerable traction in the U.S. over the last 5-10 years. Driven by the need to shift towards a more renewable generation mix and the fact that large-scale renewable generation projects can take decades to reach implementation, state governments have encouraged private developers, investors, and supportive localities to construct smaller-scale solar generation and storage systems closer to where power is consumed. Several states, including New York, Illinois, and Maryland have developed community solar and storage programs that provide utility customers with low-cost, renewable power by developing community solar programs that facilitate the siting, construction, and profitable operation of such resources.

A vitally important aspect of efforts to develop more distributed solar generation and storage capacity is the way that utilities, community choice aggregators (CCAs) and public regulatory commissions value the performance of community solar and storage systems. The valuation of the energy and non-energy benefits of grid-connected generators is a politically sensitive topic because decisions about how generation and storage assets can operate in conjunction with existing infrastructure have short and long-term consequences for ratepayers, the cleantech industry, utilities, and other stakeholders as well. As we discuss in this memorandum, the careful valuation of distributed generation and storage resources can align the interests of utilities, ratepayers, and developers. However, achieving this alignment and growing distributed generation capacity requires that regulators recognize and measure the ability of these resources to provide more than just electricity: as we describe, regulators in states other than California have done so successfully, and California could follow suit if it were to change its current valuation framework. The core issues we identify with California’s current approach to community solar and storage are the inconsistent manner in which it applies the energy resource valuation tools it has developed, and as well as the refusal of regulators to perform the measurements necessary to make an empirical determination as to the capacity, locational, and other forms value that distributed generation and storage resources can provide.

Based on our analysis, we believe AB 1813 would help address the valuation issues that have slowed the development of distributed generation and storage in California, and help break the impasse between regulators, some load-serving entities, and the broad coalition of groups supportive of community solar.