Regardless of what drives the action — state regulation, federal policy, economic reality — collaboration between utilities and the solar industry is now becoming prevalent. Expanding definitions...
The future looks bright for distributed PV.
use for solar generation. Then, literally, we’ll run a wire off the roof, under the parking lot and to the nearest power pole, and the juice goes into the neighborhood.”
Priming the Pump
SCE’s distributed-solar business model treats the facility just like any other power plant, and the company plans to invest $875 million in new installations. Alexander is careful to point out, however, that it’s not the beginning of other major distributed-generation projects for SCE.
Under California’s decoupled regulatory scheme, SCE is allowed to generate only 30 percent of the power it sells; it must purchase the rest on the market. Therefore, its generation projects are carefully selected to test and cultivate markets. In this case, the seed nature of the project even was explicit in the CPUC’s approval.
“When we move into generation, there’s always some unique one-off rationale, and this project is motivated primarily by a desire to stimulate the market,” Alexander says. “When the public utility commission approved our project, they also said to do a competitive solicitation among independent power producers, invite them to match us and sign long-term contracts for the power they produce on their roofs.”
As a utility administrator of the CSI, SCE witnessed retail level activity on the small end of the market, and it observed strong interest and rapid development in central-station solar. But the company saw a gap in the market.
“We noticed there was almost no activity in the middle, and we thought we could prime the pump,” Alexander says. “We think the [commercial solar roof] project, because of its scope, will help bring down the price of solar rooftops for everybody. It will influence the market and maybe even the transform the market. Who knows?”
The speed of SCE’s actions seems to demonstrate the company’s commitment to the concept. The distributed solar project went from initial proposal to switching on the first roof in just six months—a pace that surprises even an unabashed solar booster like Blunden.
“You couldn’t have convinced me two years ago that we would see what we see right now in California with PV. It’s absolutely stunning,” she says. “Utilities often aren’t really happy about transformations, whether it’s wholesale energy markets, divestiture of assets or letting people use your billing systems to bill retail customers. And yet here we are with utilities embracing the idea that they’re going to own solar.”