SepiSolar says California’s NEM policy revision paves the way for larger solar systems, quicker interconnection

NX Flow-SepiSolar White Paper

Contractors will need to design solar systems with DC-coupled storage and procure DC-coupled energy storage products that incorporate a new UL-verified inverter firmware solution

A new SepiSolar white paper reveals the financial benefits of a pending revision to California’s net energy metering (NEM) policy. When finalized, commercial DC-coupled solar-plus-storage installations will not only be able to benefit from NEM, but will also be able to increase solar system size, reduce installation and permitting costs, and quicken interconnection approval time.

“This policy does more than just reduce equipment costs,” said Josh Weiner, CEO of SepiSolar and author of the white paper. “Businesses can now store their excess solar power in a battery system and receive demand charge benefits as well as the financial benefits from NEM.”


On Oct. 5, 2018, the California Public Utilities Commission (CPUC) issued a proposed decision to modify CPUC Decision 14-05-033, the NEM tariff policy for solar and energy storage. Once approved, the change will allow DC-coupled energy storage systems to become eligible for NEM without the need for thousands of dollars in extra hardware costs and burdensome verification required by California utilities and the IRS for AC-coupled energy storage systems.

To take advantage of this policy change, contractors will need to design solar systems with DC-coupled storage and procure DC-coupled energy storage products that incorporate a new UL-verified inverter firmware solution. NEXTracker’s NX Flow energy storage system piloted this firmware solution with UL, and is therefore expected to be the first DC-coupled energy storage product approved for the new regulation.

SepiSolar findings

Before the CPUC's Proposed Decision

SepiSolar’s white paper reviews and compares the historical challenges of designing AC-coupled and DC-coupled energy storage systems for NEM. It also describes how the new NEM DC-coupled policy and system design will eliminate the need to purchase the extra equipment required for non-export AC-coupled systems, such as reverse-power relays, an additional utility meter, switchgear and a second inverter.

After the CPUC's Proposed Decision

“Another benefit is that solar systems can now be ‘supersized’ to exceed the 1 MW behind-the-meter interconnection soft limit,” Weiner says. “With a DC-coupled design using products that have the UL-verified firmware, excess generation over 1 MW can now be stored in the battery and later exported into the grid at favorable or optimized NEM or NEM-aggregate tariff.”

As a simple example, Weiner says a 1 MW stand-alone solar system can be increased to 5 MW with a complementary DC-coupled 4 MW storage system and a 1 MW AC inverter that uses the new firmware.

Goodbye, infrastructure costs

The same DC-coupled system design may also eliminate the need for utility infrastructure upgrade costs. These costs are most often charged to the solar asset owner when the solar system’s export generation is over 1 MW. Typically, the owner either pays for the upgrades or decreases the system size. With the new DC-coupled configuration, solar-plus-storage systems can be designed to meet the location’s grid capacity, reducing the need for upgrades. Any excess solar can be stored and later exported at up to 1 MW intervals. In models developed by SepiSolar, adding DC-coupled energy storage under the pending NEM policy is usually much less expensive than the cost of grid infrastructure costs without storage.

The simpler DC-coupled design also will allow solar+storage systems to qualify for expedited interconnection, reducing difficult verification requirements for utility interconnection, expediting interconnection.

Finally, with the UL-verified firmware, tax equity investors and utilities receive independent verification that the storage system is only exporting solar generation and not charging batteries from the grid. This verification is important for qualifying energy storage systems to receive the 30% investment tax credit.

The proposed CPUC ruling for NEM for DC-coupled solar-plus-storage systems is expected to gain final approval by the end of 2018 or early in 2019.

— Solar Builder magazine

California Building Standards Commission makes it official: New homes will have solar starting in 2020

California Building Standards vote

Making it official, the California Building Standards Commission (CBSC) unanimously confirmed the new standards that require solar on new homes in California starting in 2020. This final regulatory vote confirms that the California Energy Commission (CEC) followed the correct process in developing the new rules established in May, making California the first state in the country with the clean energy requirement. The new rules include a solar plus storage option to give consumers more clean energy choices.

“It’s officially official. Solar will be required on new California homes starting in 2020,” said Kelly Knutsen, Director of Technology Advancement for the California Solar & Storage Association (CALSSA). “These highly energy efficient and solar-powered homes will save families money on their energy bills from the moment they walk through their front door. Homebuyers will also have a solar plus storage option, allowing their home-grown clean energy to work for them day and night.”

The CBSC voted to confirm that the CEC followed the correct process to increase the clean energy requirements in the California Building Energy Standards.

Details on the new standards

Updated every three years through a rigorous stakeholder process, the standards require California homes and businesses to meet strong energy efficiency measures, lowering their energy use.

For the first time, they will require solar photovoltaic (PV) panels to be installed on new low-rise residential buildings starting January 1, 2020. Low-rise residential buildings include single family homes and multi-family buildings of three stories or less; therefore apartments and condos are included in the new standards.

Additionally, the vote sets a path forward for solar plus storage in new homes by providing a storage option if the homeowner chooses. The standards also continue solar water heating provisions for larger buildings, allowing solar energy continue to help reduce the water heating needs of our buildings.

CEC analysis

For the past three years, the CEC performed detailed analysis on the new requirements, and gathered official public input from all stakeholders — utilities, home builders, solar industry, lighting industry. Their analysis showed the new solar requirement will be cost-effective in all climate zones in the state – from the mountains to the Central Valley to the coast.

The CEC stated that homeowners would save $40 dollars each month, or roughly $500 per year, due to these new standards. This is because even though the new energy efficiency and solar requirement would add roughly $40 per month to the mortgage payment, the savings on the homeowners’ energy bills is expected to be about $80 per month.

Currently the solar industry installs solar on roughly 150,000 new and existing homes in California each year, with roughly 15,000 of those projects being new homes. California on average builds 80,000 new homes annually. Starting in 2020, those new homes will have solar; a four-fold increase compared to today.

— Solar Builder magazine

Vivint Solar offers new fixed rate solar lease in California to prep for 2020 mandate

Vivint solar

Vivint Solar, a full-service residential solar provider, launched a new fixed rate solar lease plan to expand its options for homeebuyers and builders ahead of California’s 2020 solar mandate. Initially available in select markets in California, the new solar plan allows new customers to install solar panels for no money down, lease them from Vivint Solar for 20 years and pay the same fixed monthly payment over the entire contract term.

The new offering underscores Vivint Solar’s commitment to expand the solar plans homebuilders can offer to homebuyers as they prepare for California’s 2020 mandate requiring rooftop solar installations on new homes. In collaboration with Vivint Solar, homebuilders in California can offer multiple solar plans to homebuyers, who will have the opportunity to choose their preferred financing option.

“In order to provide a best-in-class customer experience, we must continue to diversify the ways homeowners can go solar and save money on energy bills,” said Vivint Solar CEO David Bywater. “This new solar plan introduces a simple, flexible option for embracing clean, renewable energy and gives new customers the assuredness that they will pay the same amount for solar energy in 2038 as they will in 2018.”

Vivint Solar expects to extend the fixed rate solar lease plan to additional states in the coming months.

— Solar Builder magazine

California passes roadmap to 100 percent renewable energy by 2045: Boosts to storage, multi-family PV

California solar bills

California is changing the renewable energy game yet again, sending a series of bills to the governor’s desk that will drive energy storage adoption, multi-family installs and get California to be 100 percent renewable by 2045.

SB 700

For years now Bernadette Del Chiaro, executive director of the California Solar and Storage Association has said SB 700 will do for storage what SB 1 did for solar over a decade ago, “namely create a mainstream market by driving up demand and driving down costs all while creating jobs and clean energy choices for consumers.”

SB 700 energy storage

SB 700 would result in nearly 3,000 MW of behind-the-meter energy storage systems at schools, farms, homes, nonprofits and businesses in California by 2026. SB 700 would achieve these goals by re-authorizing the Self-Generation Incentive Program (SGIP) for an additional five years, extending rebates for consumers through 2025. It would add up to $800 million for storage and other emerging clean energy technologies, resulting in a total investment of $1.2 billion for customer sites energy storage. Boosting energy storage will help California achieve its goal of generating 100% of its electricity from renewable resources, as called for in SB 100.

RELATED: California to launch three programs to improve low-income community access to solar

SB 100

The legislature-approved bill requires California’s electricity providers to achieve a 100 percent clean and zero-carbon goal by 2045, increasing the current Renewable Portfolio Standard (RPS) to 60% by 2030 and requiring the remaining 40% to be met by all eligible zero-carbon emitting resources. Authored by State Senator and former Pro Tem Kevin De León, this bill will make California the second state after Hawaii to set a 100% clean energy goal.

“This is a huge victory for California, as the legislature is setting the course for a secure, clean, affordable energy future for its citizens and our nation,” said Amisha Rai, Senior Director of California Policy for AEE. “We congratulate Sen. De Léon for his resolve and leadership on this bill. The advanced energy industry stands ready to make a 100% clean energy grid a reality.”

AEE supported SB 100, along with several other bills this session, including EV charging infrastructure bill AB 2127*, passed late Monday, and a bill to expand the market for advanced energy through an integrated Western grid that is still pending.

There is still work to be done though, according to Abigail Ross Hopper, CEO of the Solar Energy Industries Association.

“To make this great legislative victory a practical reality, California must begin taking steps now to deploy renewable energy on a wide scale,” she said. “That’s why we are asking lawmakers to also pass AB 893, which would require utilities to ramp up procurement of renewable resources. Without serious near-term action, ambitious long-term goals will be hard to reach. Furthermore, AB 813, legislation to create a regional electricity market that includes California and neighboring states will help accelerate renewable energy deployment in California and other areas of the West.”

AB 693

A team of leading clean energy and affordable housing organizations in California will run the state’s new Solar on Multifamily Affordable Housing (SOMAH) Program. The California Public Utilities Commission (CPUC) initiative will provide up to $100 million annually for 10 years to fund solar energy installations on multifamily housing serving low-income and disadvantaged communities throughout the state, with a goal to help reduce energy bills for residents.

Million solar roof initiative

The SOMAH Nonprofit Administrative Partnership includes the Center for Sustainable Energy, Association for Energy Affordability and GRID Alternatives, with implementation assistance from the California Housing Partnership Corporation, Rising Sun Energy Center and California Environmental Justice Alliance, among others.

The CPUC Energy Division selected this partnership based on their long-term experience in implementing statewide renewable energy and energy efficiency programs and working with affordable housing owners and tenants to maximize participation and community benefits.

“The idea behind SOMAH is to ensure equal access to solar energy for all California households, regardless of income levels,” said Benjamin Airth, a senior specialist in distributed energy resources at the Center for Sustainable Energy. “Low-income renters pay a higher percentage of their income on utility bills, and improving access to solar means lower bills, better housing security and a cleaner, healthier environment for all Californians.”

The SOMAH Program was created by California Assembly Bill (AB) 693 introduced by Assembly Member Susan Eggman (District 13, Stockton) to help California meet its climate goals, reduce energy bills for low-income residents and ensure that clean energy infrastructure isn’t just for the wealthy. The largest investment of its kind in the nation, it provides up to $1 billion over the next decade from the state’s investor-owned utilities’ greenhouse gas cap-and-trade auction proceeds to fully subsidize 300 megawatts of solar photovoltaic (PV) panels on affordable multifamily properties throughout the state by 2030.

By comparison, over the past 10 years the former Multifamily Affordable Solar Housing (MASH) program resulted in about 34 megawatts of energy installed statewide. SOMAH will build on the many lessons learned from the MASH program, including tenant savings and workforce development.

“This is an incredible opportunity to put clean energy to work for whole communities,” said Cathleen Monahan, vice president of program administration at GRID Alternatives. “Each project will generate local clean energy, substantially reduce energy bills for families and provide community members with paid workforce training opportunities to help them access jobs in California’s robust solar market.”

To receive SOMAH incentives, the property must either be in a designated disadvantaged community or have at least 80 percent of its households with incomes at or below 60 percent of the area median income. The CPUC estimates more than 3,500 multifamily affordable properties across the state qualify, encompassing nearly 255,000 individual households.

AB 693 requires that SOMAH projects must provide at least 51 percent of the clean energy produced from the PV system to tenants to reduce their bills. It allows each household to receive a utility bill credit for a proportionate share of the energy generated by the building’s system under a utility tariff called virtual net energy metering.

“SOMAH will unlock the benefits of healthy, affordable energy for the underserved Californians who need it most,” said Stephanie Wang, policy director at the California Housing Partnership Corporation. “This program will also help to preserve affordable homes threatened by rising energy and housing costs.”

Technical assistance for property owners and residents is integrated into all SOMAH services, from the initial incentive application process through the post installation period during which the program will continue to provide long-term support with billing, monitoring and operations necessary to ensure system performance and energy savings.

“We also want property owners and operators to develop an understanding of other energy programs and options available for technical assistance, including energy efficiency, benchmarking, energy storage and additional improvements related to energy use, such as electric vehicle charging,” said Andrew Brooks, director of West Coast operations at the Association for Energy Affordability.

The SOMAH Program is expected to launch in late 2018.

— Solar Builder magazine

Solar workers rally at California state house to support self-generation incentives

california storage bill

The solar industry in California is rallying behind Senate Bill 700 to replenish incentives for residential and commercial energy storage systems and get ahead of the Time-of-Use rates that will hit consumer energy bills in 2019.

“We’ve come out by the hundreds from all over the state to speak directly with our elected officials about the urgency of supporting energy storage in California,” said Bernadette Del Chiaro, executive director for the California Solar and Storage Association, the bill’s sponsor. ”SB 700 will do for storage what SB 1 did for solar over a decade ago, namely create a mainstream market by driving up demand and driving down costs all while creating jobs and clean energy choices for consumer.”

SB 700 would re-authorize the Self-Generation Incentive Program (SGIP) for an additional five years, extending rebates for homeowners, nonprofits and businesses through 2025. It would add up to $700 million to the SGIP program, creating stability and certainty to an emerging new technology.

“If we are going to get to 100% clean energy, we need to be using solar power every hour of the day, not just when the sun is shining,” said Senator Scott Wiener (D-San Francisco), author of SB 700. “This bill will protect clean energy jobs while also protecting consumers from ever rising energy bills.”

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The California solar industry supports over 86,000 jobs in the state of California, by far the most of any state in the country. These jobs are in jeopardy unless the energy storage market achieves the same economies of scale achieved in the solar photovoltaic market, which saw an 80% decline in costs over the course of the state’s 10-year incentive program, the Million Solar Roofs Initiative. This is because so-called Time-of-Use rates will make energy storage a necessity of every solar system but without cost reductions in storage, the state could suffer a setback in its deployment of solar energy.

“More than 20% of Sunrun’s direct solar customers in California are adding a home battery to their system, with up to 60% adoption in some markets,” said Alex McDonough, Vice President of Public Policy for Sunrun, the nation’s largest residential solar, storage and energy services company. “Senator Weiner’s legislation provides clear and consistent policy that will drive down costs, expand access, and support job growth. Solar combined with batteries is a clean, reliable and affordable solution that can, and should, be available to all.”

SB 700 is currently in the Assembly Appropriations committee. If it passes that committee, it will proceed to the Assembly Floor the following week. It passed the Senate last year so would only need to return for a concurrence vote before heading to the governor’s desk.

— Solar Builder magazine