California power shut-offs drive customers to solar and storage

The
devastating California wildfires and related power outages are already leading to new approaches to energy resiliency that rely on
battery storage technologies.

Millions
of people in the state have had their electricity cut over the last month due
to preventative utility shut-offs. Even if the shut-offs could be justified to
avoid starting more fires, the ability of the utilities in these affected areas
to supply reliable power to their customers is now in doubt.

The
impacts of the shut-offs have been dramatic―hospitals without power had to be evacuated,
people at home with critical medical equipment were placed at risk without
power to run these devices (one person has died), and over $2.5 billion in
business losses accrued due to outages―all pointing to an energy system in
collapse.

Clean
Energy Group (CEG) and many solar and storage companies have been advocating
for more aggressive reliance on distributed solar and battery storage systems
in critical facilities throughout the state. But two lingering problems remain
in California and elsewhere – obstinate utilities that slow-walk interconnecting
such systems, and the lack of an integrated policy approach to power resiliency
state-wide.

This
past week, a new model has emerged to accelerate the adoption of solar and
storage systems for resiliency. Four local energy providers―three Community
Choice Aggregators (CCAs) and one municipal utility in the greater San
Francisco area―have issued a solicitation for more than 30
megawatts of new battery storage paired with solar for resiliency purposes in
their communities. The groups say that their solicitation “includes goals
of supporting low-income residents, customers with life-dependent medical
equipment, and residents and businesses located in disadvantaged communities.”

The
solicitation also notes that it is building this model based on a peaker
replacement strategy adopted in Oakland over this summer. CEG has written about
this innovative market solution for solar and storage: the residential
solar+storage company Sunrun was selected to install solar and battery storage
at multiple affordable housing properties to provide reliable electricity capacity
for the replacement of an aging jet-fuel
peaker plant
.
(CEG hosted a webinar featuring Sunrun
and the city of Oakland on the peaker project there.) Along with providing peak
power services, the solar and storage systems installed under this Oakland
solicitation would deliver backup power to keep critical services running for
residents during an outage.

Crises
have a way of amplifying flaws in a system and upending the established order;
and they often lead to innovations in technology. That is happening now in
California. The innovation that will answer this need is distributed, clean,
resilient power. The technology has arrived, in the form of solar+storage; and the
procurement model that was pioneered for peaker replacement in Oakland could
now become a new method of resilient power adoption implemented at a local
community level for the rest of the state.

Monopoly utilities have failed to provide resilient power. At the same time, they often block aggressive uptake of innovative, distributed resources such as solar and battery storage. For these reasons, new procurement structures that circumvent  utility obstruction can be key to allowing communities to access resilient power. To our knowledge, the model being pioneered in California is an entirely new, community-based structure to solicit resiliency resources, outside of the conventional utility model. Such an approach is something that should be explored throughout California and in other states.

This development comes amidst a dramatic increase in consumer demand for residential solar and storage in the wake of these massive utility blackouts. An industry CEO recently remarked, “There’s been a heightened desire by consumers to take control and not rely solely upon local utilities.” This uptick raises again the debate about whether people will buy these technologies for environmental purposes only, or whether other reasons―such as energy security, health, and economic benefits―will be more important

While
policy mandates are critical for massive adoption, the California shut-offs add
data to answer that question. What we have is a new empirical experiment in
California in the last month that suggests customer demand for reliable power
solutions might be more intense and durable if the technologies provide
benefits to customers in their daily lives.

That
is, solar and storage now is a reliable source of power that can keep customers
online when the grid goes down. In the face of increasing threats from climate
change and the vulnerability of our century-old power grid, resilient power is
proving to be an invaluable need. It benefits the customers directly, and that
is critical to longer term market growth of clean energy.

(It is also consistent with standard disruptive innovation business theory – that customers will go for new technology if it “does a job better” than the status quo. More and more customers in California are finding that solar and storage can now do a more reliable job than the monopoly utility.)

These applications of distributed solar and battery storage in California to remedy the failures of the grid are critically important and a key model to follow elsewhere.

— Lewis Milford, President, Clean Energy Group

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