California Proposes Major Policy Shift in Support of Energy Resilience

When Clean Energy Group first launched the Resilient Power Project, we focused much of our early efforts on working with Northeastern states that had felt the impacts of Superstorm Sandy in 2012. After multiple states in the Northeast implemented resilient power strategies, with incentive programs and demonstration projects aimed at advancing solar and battery storage installations for community resilient, we turned our attention westward.

We were hopeful that the Northeast trend toward resilient power programs could take root in California. At the time, top energy regulators essentially told us “thanks, but no thanks.” The message was that resilience is an Eastern problem and that power outage issues were not an issue in California.

Two years of devastating fires and this fall’s unprecedented utility preventative power shutoffs have dramatically changed the California narrative, and California regulators are telling an entirely different story. Now, battery storage has become a key resilience technology in the state, reflected in a major policy shift on the use of state incentives to support battery storage.

In a new proposed decision issued by the California Public Utility Commission (CPUC), regulators are proposing to devote the majority of new behind-the-meter energy storage incentives to advance energy resilience projects for vulnerable communities at risk of future forced power outages. If implemented as written, the proposed decision would allocate a total of $613 million in Self-Generation Incentive Program (SGIP) funds toward the state’s new Equity Resilience Budget, which will roll out in the first few months of 2020.

New funding for the resilience incentive represents more than 60 percent of additional SGIP funding authorized through 2024.

In particular, the Equity Resilience Budget provides a $1,000 per kilowatt-hour incentive for low-income, environmentally overburdened, and medically vulnerable households and critical service providers in high wildfire threat zones to install battery storage systems designed to power critical loads during an outage. Households and service providers that have already experienced utility wildfire shutoffs would also now be available for the incentive, which should cover most, if not all, of the cost of a resilient battery storage installation. Of course, incentives alone won’t guarantee that vulnerable populations will be adequately protected during outages. The incentives must be paired with outreach, education, oversite, and support from qualified technical assistance providers to help ensure that funds are appropriately and equitably distributed.

The CPUC proposal also calls for the establishment of a $150 per kilowatt-hour resiliency adder for SGIP projects supporting energy resiliency that are not eligible for Equity Resilience Budget incentives. When combined with non-resilience SGIP incentives, the resiliency adder should offset at least half the cost of batteries for these projects.

This is a welcome shift in policy from what we were hearing from California less than two years ago. Unfortunately, it often takes a crisis for policy makers to wake up to the real problems they didn’t know they were about to face. Better late than never, though many communities have had to suffer needlessly due to the delay.

Other states should similarly adopt this approach to battery storage and resiliency, before their next power crisis hits. With climate related outages on the rise, it’s only a matter of time until states see resilient power as their new way to keep the lights on.

This blog post was also published in Renewable Energy World.