On June 24, the California Public Utilities Commission (CPUC) controversially adopted a change to the state’s Avoided Cost Calculator. This calculator is a key tool the CPUC uses to measure the ‘avoided costs’ to society from distributed energy resources. Their decision could adversely affect the future of rooftop solar and energy efficiency.
At this meeting, the CPUC proposed adopting what they called minor adjustments to the avoided cost calculator. This decision would dramatically reduce their prediction of the ‘avoided costs’ from energy efficiency and rooftop solar, estimating that rooftop solar would avoid only one-third of the costs they had calculated in prior years. This change will devalue the benefits of rooftop solar right as the CPUC reviews proposals for NEM3.0, the next iteration of California’s bedrock rooftop solar program, net energy metering.
Even before the commission’s recent adjustments, the calculator already undervalued rooftop solar by failing to capture the full greenhouse gas reduction benefits from the more rapid deployment of rooftop solar versus large scale renewables. It also neglected the larger societal benefits from reducing the need to build out new transmission lines and minimizing impacts to wild open space offered by energy efficiency and rooftop solar and storage.
At the CPUC hearing Environment California State Director Laura Deehan testified against the change:
“I urge commissioners to reject today’s proposed changes to the Avoided Cost Calculator.
“The avoided cost calculator is an important tool for modeling, attempting to measure some of the benefits of rooftop solar and energy efficiency programs, as well as other distributed energy resources. Unfortunately, the changes proposed today have serious errors that would have widespread consequences.
“Just one example is the projection for large scale solar deployment, which the new avoided cost calculator estimates at 20 gigawatt (GW) over the next four years, or 5 GW per year. From 2017 to 2020, only 6.4 GW of utility scale solar was installed and to date California has 15 GW of utility scale solar. The PUC [Public Utilities Commission] has historically counted 2 GW per year, and it takes on average 6 years to get one project deployed. Although speedy renewable energy procurement would be welcome to ensure we accelerate our transition to 100% renewable energy, these numbers don’t add up, and this change throws the whole calculator off.
“Rooftop solar and storage along with energy efficiency are some of our best tools to fight climate change. But this change inaccurately pushes down the projected greenhouse gas reduction benefit of future rooftop solar or energy efficiency
“This week’s heatwaves, emergency drought, and wildfire conditions are reminders that we need to maximize every tool in our toolbelt to tackle the climate crisis. The CPUC must not adopt changes that would have severe consequences on policies to ensure future adoption of the best tools we have to accelerate the transition to a 100 percent renewable energy future.”