CPUC Clears the Way for Solar Battery Systems

Now that solar panels have popped up on roofs across California, one of the next challenges for unlocking their potential and integrating the energy that they produce into the grid is the development of batteries that can store energy during the day (when the sun is shining, but little power is being consumed) and then allow the energy to be used in the evening (when the sun is setting, but energy demand rises drastically).  California regulators have just clarified rules that should greatly increase the pace at which companies and customers across the state will be installing and connecting solar PV panels supported by battery systems to the grid.  Installations of these systems has been stalled in recent years because California utilities were requiring that applicants complete extensive interconnection studies and pay thousands of dollars in additional fees before the storage systems were connected.  These requirements had stifled the interconnection of these types of behind-the-meter energy storage systems across the state.

On May 15, 2014, the California Public Utilities Commission unanimously approved a decision that exempts many solar storage projects from fees and interconnection studies. (here is the proposed decision, which the Commission approved this morning.)  The decision clarifies existing policy set out in the seventh edition of the Renewables Portfolio Standard Eligibility Guidebook (Guidebook) regarding the treatment of energy storage systems under the state’s net energy metering (NEM) program.  The Commission clarified that energy storage systems are exempt from interconnection application fees, supplemental review fees, costs for distribution upgrades, and standby charges when interconnecting under the current NEM tariffs if these systems: (1) are paired with NEM-eligible generation facilities (e.g., a rooftop solar installation); and (2) qualify under the Guidebook as an “addition or enhancement” to NEM-eligible systems.  The decision also places certain limitations on the size of the storage systems and implements metering requirements aimed at protecting the NEM program, in order to help ensure that any energy sent onto the grid from these battery systems is truly “green” energy from the solar PV system and not simply “brown” energy that had previously been pulled from the grid.

The Commission’s decision is widely considered a victory for distributed storage and a rebuke to the California utilities for having failed to take “a more proactive and collaborative approach” with customers and companies that were looking for ways to interconnect these battery systems without incurring the additional fees and study requirements.

The decision comes after the Commission approved, in October of 2013, its proposed mandate that requires the state’s three investor-owned utilities (IOUs) to add 1.3 gigawatts of energy storage to the grid by 2020.  The CPUC’s mandate calls for customer-sited storage, such as solar battery systems, to make up a significant portion of that total.