Onsite solar is an increasingly attractive option for commercial clients looking to trim their utility bills and demonstrate their green credentials to employees and tenants. But solar is not for every building.
If your roof can’t handle it, or if you are a tall building, your options for solar power are limited. Until now.
A recent law and CPUC ruling paves the path for each major utility in California to offer an on-bill solar option that pays for the clean energy output of local solar projects.
These types of mechanisms have existed for some time for corporations, but have been unwieldy to deal with because they involved companies purchasing Renewable Energy Certificates (RECs) from third parties, assuring themselves of complex issues of provenance and supply and often supporting projects far away from anything they could point to.
As a prior participant in the carbon and REC markets, I just read through the lengthy proposed decision (pdf) and I’m cautiously optimistic that this regulation will result in a legitimate and impactful green power option for California customers. The decision doesn’t yet deal with tariff implications, but expect the premium to be in the $0.02/kWh range. Most importantly, because charges come on the utility bill, organizations may have an easier time both signing up and allocating expenses for renewables charges.
Of course, on-site solar comes with economic return and payback and this program does not. However an alternative mechanism handled under the same proceeding implements community solar for PG&E, SCE, and SDG&E. Here instead of contracting with their IOU, customers could contract with third-party solar developers for a share of the solar output. While unlikely at first, this might produce long term savings or price certainty and allows for even more flexible development models. For example, you can imagine a corporation developing a project at a school and off-taking the excess energy for price certainty on the generation portion of their bills. That’s an exciting win-win that might fit with many teams’ desire to advance community relations as part of their energy strategy.
This isn’t for everyone. If your organization only responds to paybacks and savings, you’re best to look elsewhere. But if you are looking to amplify your green credentials, these programs potentially fold the tools that the most sophisticated organizations use to drive energy policy into a check mark on your utility bill.
Programs rollout in late 2015, so stay tuned as more details emerge.
