On Thursday, June 24, the California Public Utilities Commission (CPUC) is slated to vote to approve an updated version of the “Avoided Cost Calculator” that deeply undercuts the value of rooftop solar, according to the advocacy group Save California Solar.
The Avoided Cost Calculator (ACC) is a model developed by E3, a consulting firm regularly used by utilities to put out research products biased against distributed energy generation, that is also under contract with the CPUC. The ACC measures utility avoided costs from customer solar — how much utility costs go down for every MW of distributed solar that is installed. It is the state’s official “value of solar” calculator. The ACC is updated each year, and when the updates are major there is supposed to be an extensive public review process to make sure the changes are right.
This year, E3 and CPUC included major revisions that cut the value of rooftop solar in the 2021 calculator by about one-third the value in the 2020 version.
There are two major assumptions driving that reduction.
First, the calculator has an additional 30 GW of utility-scale solar and storage going online by 2025. The average utility scale project takes about 6 years to complete. Rooftop solar is essentially crowded out by these new resources and its value is measured to be lower. The idea of 30 GW of utility-scale solar and storage being installed over the next four years is wildly out of step with reality. It is simply not possible to move that many major projects that fast. Indeed, in the four year period between 2017 and 2020, just 6.4 GW of utility scale solar was installed.
Second, the calculator uses an entirely new and untested model for predicting how wholesale energy pricing will behave in the future. CPUC cannot start using this new model to set rates, including net-metering values, without thoroughly vetting it with a wide range of stakeholders.
These numbers and biased calculations are contained in CPUC Draft Resolution 5150, which is slated for a vote by the Commissioners on June 24.
Solar advocates are strongly opposed to these changes and are urging the CPUC to pull back the resolution and eliminate the extreme updates that undermine the growth of rooftop solar.
Rooftop solar remains extremely popular in California, with voters overwhelmingly opposed to changes that would halt the expansion of solar in working and middle class neighborhoods, taking California back to a time when solar was only affordable to wealthy households. Rooftop solar with net metering support is also key to the California Energy Commission’s joint agency “road map” to get California to 100% clean energy and the least expensive way to do it. Efforts to undermine rooftop solar through ACC updates or in the CPUC’s upcoming changes to net metering are out of step with California’s goals and values.