Kicking the deadline further down the road may put the state in peril of losing the funds, as the EPA, which runs the Solar For All program, requires all awards to begin to be deployed within the first year of grant being effective.
The California Public Utilities Commission’s (CPUC) Administrative Law Judge issued a proposed order in the community solar docket that kicks all deadlines in the Community Renewable Energy Program (CREP) from January 1, 2025 to January 1, 2026, including the final determination of California’s $250 million in federal Solar For All funding.
The order states that “the Commission requires time beyond the current statutory deadline (January 1, 2025) to ascertain the final determination of the state’s Solar for All application, develop further record based on any requirements and/or conditions associated with the anticipated Solar for All grant funding.” The CPUC says that delaying the decision a year allows the Commission sufficient time to accomplish its goal.
The CPUC had already extended this deadline to the end of this year. By kicking it further down the road may put the state in peril of losing the funds, as the Environmental Protection Agency (EPA), which runs the Solar For All program, requires all awards to begin to be deployed within the first year of grant being effective. pv magazine USA reached out to the EPA for comment on the deployment deadline, but had not received a response by press time.
The Solar for All program, announced in June 2023, is a funding opportunity announced by the EPA that has a goal of bringing solar energy to low-income households. Funding of $9 billion was announced in April 2024 to be distributed to 60 recipients, chosen based on their proposals to develop programs designed to serve low-income and disadvantaged communities.
The California CREP, approved by the governor in 2022 (AB 2316), required the CPUC to adopt any new community renewable energy program by July 1st, 2024.
Ironically, AB 2316 was passed in under a year, and moved through legislation must faster than usual because it represents a “product market fit,” said Richard Caperton, vice president of policy and market development at Arcadia, a cleantech data provider. Caperton served on a panel at RE+ in 2023 along with representatives from Solar Landscape, Dimension Energy, and the Solar Energy Industries Association (SEIA). The panelists generally shared the sentiment that the law has come just in time to address the needs of California’s grid and its ratepayers. That was almost three years ago.
“Numerous organizations, including our own, have worked in good faith with the CPUC for years to consider how to set up a viable community solar program in California; that they cannot decide how to spend Federal dollars is beyond disappointing. Simply put, this was a straightforward opportunity to help lower utility bills and keep the lights on for struggling Californians,” said Derek Chernow, Western U.S. regional director of the Coalition for Community Solar Access (CCSA).
Developers look for opportunities in other states
With such uncertainty in the state, many developers have shifted resources to other markets. “We’re shifting the dollars, the people power, the jobs… to other areas across the country where there’s more stable and workable community solar regimes,” Aaron Halimi, founder and president of Renewable Properties, told pv magazine USA. He added that even though the company is based in California, “the company has reprioritized its efforts.”
Halimi pointed to New York’s very successful NY-Sun community solar program as an example of what works. A program like that in California would “help make projects pencil and ultimately get some amount of megawatts onto the grid in the more immediate to medium term,” he said.
The upshot of developers looking elsewhere for opportunities is that the California community solar market is in decline. In the first half of 2024, the U.S. Solar Market Insight report from the SEIA and Wood Mackenzie notes that there were 577 MW of community solar installations, a 2% decline compared to H1 2023.
Renewable Properties is not alone in hoping for change. Dimension Energy, a community solar developer, owner, and operator, recently completed construction of a project in California that is currently the largest third party-owned community solar project in the United States. Dimension Energy serves markets across the country, but Brandon Smithwood, vice president of policy at Dimension said the company is “standing by to bring hundreds of millions of dollars of investment into the state to take advantage of a once-in-a-generation grant from the federal government.”
Dimension just launched three projects providing clean solar power to over 3,700 low-income residents in California, offering a 20% discount and saving families an average of $40 per month. “Similar initiatives could be replicated across California that would help upwards of 150,000 Californians, but the PUC’s continued delay jeopardizes these funds, potentially losing this critical chance to support low-income communities permanently,” Smithwood said.
“As many California renters continue expressing their distress with unaffordable electricity bills during the PUC’s monthly public meetings, the commission has made yet another unforced error by pushing back their deadline to utilize the $250 million in federal Solar for All funds by a full year,” Chernow said.
With a new administration in place, pv magazine USA asked Smithwood for his opinion on whether it would be possible for the funds to be rescinded altogether. He said it would be hard to “claw back funds if a contract has been signed.” He reiterated that the EPA has already imposed a timeline for programs to launch and money to be spent. He said, “at this rate, the Commission is running the risk of meeting their timelines with EPA, which could provide an opportunity for those funds to be clawed back.”
