The California State Legislature passed AB 2316, the Community Renewable Energy Act, a bill that creates a community renewable energy program, including community solar-plus-storage, to overcome access barriers for nearly half of Californians who rent or have low incomes.
Across the United States, solar owners have an average income 58% higher than the median income in their county. The new program is aimed at expanding access while simultaneously strengthening California’s grid. The bill now heads to Governor Newsom’s desk, where he will have until September 30 to act on the bill.
Community solar projects are often smaller than utility-scale facilities, and are ideally built on landfills, former industrial sites, and other brownfield locations. Customers typically subscribe to a share of energy produced by the local clean energy project, accessing lower bills and reducing their carbon footprint.
Without the ability to purchase and install solar directly on a rented residence, community solar offers a pathway to the 45% of Californians who rent their homes, and the 70% of renters who are considered low-income.
The Biden Administration set a goal this year to sign up 5 million community solar households, achieving $1 billion in bill savings by 2025. The Department of Energy (DOE) reports that by year’s end 2020, about 3 GW of community solar in the United States was active, enough to power about 600,000 homes. The community solar model only represents about 8% of the total distributed solar capacity in the nation. This target would entail a jump from 3 GW installed capacity to 20 GW by 2025. DOE estimates customers enrolling in community solar will save an average of about 20% on energy bills.
The Community Renewable Energy Act was sponsored by the Coalition for Community Solar Access, and met with strong support from groups like SEIA, GRID Alternatives, Vote Solar, the Sierra Club, the Union of Concerned Scientists, the Natural Resources Defense Council, and more. Notably, investor-owned utilities, which serve over 75% of the electricity usage in the state, opposed the bill. Pacific Gas and Electric, San Diego Gas & Electric, and Southern California Edison all signed on in opposition to the bill.
AB 2316 provisions include:
- Gives renters, nearly half of Californians and predominantly people of color, access to clean energy and lower electricity bills
- Builds the reliability of California’s power grid through linking storage with community solar
- Ensures at least 51% of subscribers are low income customers, triggering at least a 40% federal tax credit on solar panels under the Inflation Reduction Act
- Requires prevailing wages for workers, triggering a 30% federal tax credit for storage installations under the Inflation Reduction Act
- Avoids cost transfers to non-participants and maximizes the state’s ability to access federal funds under the Inflation Reduction Act.
“Californians are struggling with high energy and housing costs more than ever. Community solar plus storage can put money back in their pockets while fighting climate change and building a more reliable power grid,” said Susannah Churchill, deputy program director, West at Vote Solar. “By signing this bill, Governor Newsom can ensure California leads the nation in equalizing clean energy access among families with low incomes while accessing billions in federal funds to supercharge this long overdue change.”
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