California energy storage incentive bill dies in committee

A last-ditch effort to pass SB 700 and create a long-term energy storage subsidy in California has failed, leaving the state without a plan for one portion of what it needs to meet increasingly ambitious renewable energy targets.

July 14, 2017 Christian Roselund

California Senate Chamber

Image: Pixabay

Among the states pushing the boundaries of the Energy Transition in the United States, California can make a strong case for being the leader. The state’s 50% by 2030 renewable energy mandate is not as ambitious as targets in Vermont and Hawaii, but given the sheer economic and geographic scale of the state, it is resulting in far more wind turbines and solar panels.

California gets the highest portion of electricity from solar of any state in the nation, but is already experiencing problems with negative pricing and curtailment, due to factors including high PV production during daytime hours and the 24/7 import of electricity and running of hydroelectric and nuclear power, even during periods of curtailment.

As a reaction to these realities, California has subjected all utility customers who participate in the state’s new Net Metering 2.0 policy to time-of-use rates, which are expected to increasingly weaken the economics of customer-sited solar.

The obvious answer to these circumstances, both at the macro level and the level of individual electricity customers, is energy storage. There’s just one problem: the economics of battery storage systems don’t yet pencil out, at least for residential customers. And while battery prices are falling from year-to-year, even a modest battery system can double the cost of a residential solar installation, well overwhelming any savings derived from time-of-use arbitrage under current rate proposals.

This week hopes for a long-term program to bridge the gap while energy storage costs fall were thwarted, at least temporarily. SB 700 aimed to create a system of incentives for energy to continue after the current funding dedicated to the Self Generation Incentive Program (SGIP) dries up, which could happen by the end of this year.

However, the bill failed to pass through the California Assembly Committee on Utilities and Energy, and after missing a deadline will not be considered. “It had a lot of opposition from the utilities, which would prefer to install and own all the storage themselves,” California Solar Energy Industries Association (CALSEIA) Executive Director Bernadette Del Chiaro told pv magazine.

This is despite an aggressive campaign by CALSEIA, which included an impromptu social media audience engagement exercise at the opening of the Intersolar North America trade show.

However, Del Chiaro says that while the bill may have been killed, that this is not the end. “The vehicle that is this piece of paper that has been called SB 700 has been stopped, but this broad coalition that we have built had not been stopped,” states Del Chiaro. She also notes that a bill to move California to a 100% renewable energy mandate is moving forward.

However, the devil may end up being in the details, as California will not be able to get anywhere near such an ambitious targets without massive deployment of batteries. “You need storage to do that,” says Del Chiaro, referring to the proposed 100% renewable energy target. “We just couldn’t get this committee to fully engage. Yet.”

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