State May Give Break to Residential Energy Storage Systems

The state agency charged with regulating California's electrical utilities may bar those utilities from penalizing homeowners and businesses who augment their solar panels with on-site battery power storage.

If a proposed decision released Tuesday is approved, the California Public Utilities Commission would prevent utilities from levying most extra fees on solar customers who install batteries to store some of the power their panels generate.

As ReWire has reported in the past, California utilities have been dragging their feet on approving Net Energy Metering arrangements with customers who've shelled out for battery storage on their properties. That's despite increasing pressure from California's policymakers to build energy storage capacity in the state in the battle to reduce California's climate footprint.

Electrical power must generally be generated at the moment it's needed, making intermittent renewable energy sources like solar and wind tricky to plan around. When the sun goes down or the wind stops blowing, the power stops running in the lines. With a power storage system in place, an owner of a solar panel array can use power generated on her rooftop even after the sun goes down.

That's why the CPUC has ordered the state's utilities to develop at least 1.3 gigawatts of power storage by 2024.

You'd think that property owners or solar leasing companies who shell out their own cash to add to that total storage would be lauded as climate heroes, paying through the nose to help the state boost its power storage infrastructure. But that hasn't been the case. In an example we covered in October, the utility Southern California Edison was holding off on approving Net Energy Metering contracts with solar plus storage customers, claiming that those customers could then charge their batteries from SCE's grid and sell power back under the terms of the net metering contract. (Doing so would almost certainly cost the customer money, of course, but it is at least technically possible.)

Utilities have allegedly also charged solar-and-storage customers close to $3,000 for replacement electric meters, as Solar City spokesperson Will Craven told Cleantechnica last month, and charged $800 "connection fees" that solar advocates say are banned by the state's Net Energy Metering law.

As a result, though hundreds of Californians have expressed interest in buying or leasing battery banks to store their extra solar power, only a handful have successfully hooked up to the grid in the last couple of years.

Given the issue's broader context, in which investor-owned utilities nationwide are to varying degrees working to slow the rate of growth of decentralized renewable energy such as rooftop solar, the companies' recalcitrance does make some sense. Under Net Metering agreements, solar panel owners can run their electric meter backwards to zero when the sun is shining, but without storage capacity any power they use rolls that meter back upward. With storage, those customers will use surplus solar electricity rather than buying it from the grid, reducing even further the amount of power they purchase from the utility.

If this week's proposed CPUC ruling is adopted by the Commission, that should change. The ruling would prohibit storage systems compatible with Net Energy Metering set-ups from being subject to -- in the words of the CPUC -- "interconnection application fees, supplemental review fees, costs for distribution upgrades, and standby charges."

The ruling would allow utilities to require special electric meters to connect storage systems larger than 10 kilowatts, though it would cap the cost of those meters at $500. The ruling would also force utilities to trust customers' storage systems' data when they determine return on Net Metering contracts: a victory for the consumer.

"We're very encouraged by the proposed decision having no application fees, and having the costs of the meters capped," Solar City co-founder Peter Rive told Jeff St. John at Greentechmedia.

The proposed ruling may be discussed by the full Commission as soon as May 15.