The utility’s role is changing, and regulation must change along with it – to spur innovation and respond to evolving customer needs. Modernizing the industry will require a dynamic approach.
Cali Gets it Right
Not your father’s feed-in tariff.
expect a distributed generation developer to start delivering power within 18 months of receiving a signed PPA, compared to the several years that large central station projects take to complete the steps required for permitting and interconnection. As a result, 1 GW of distributed solar generation probably can be interconnected much faster in 1- to 20-MW chunks than 1 GW of utility scale solar in 50- to 500-MW chunks—counterintuitive as that might seem.
One obvious way that the California program could be improved is to directly encourage solar projects on rooftops or parking lots. Such installations offer environmental and community advantages, because they make good use of real estate from which no other additional energy generation or public benefit can be derived.
Ultimately solar’s greatest advantage as a technology might be that you can put it almost anywhere, and therefore don’t need to compete with agriculture, wildlife or wind farms for real estate. Solar has a large footprint requirement, compared to other technologies, but the fact that you can put it in places where other technologies can’t go improves the value proposition of distributed solar.
CPUC’s new program recognizes this value proposition and seeks to make it as economical as possible by combining the German type FiT with a new allocation mechanism. The 1-GW RAM fills a void in existing energy policy by incentivizing the development of distributed generation projects that have a high probability of entering service. If implemented properly, the RAM could serve as an international model for how to successfully and efficiently drive the development of renewable energy.