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Some small SOLAR projects under 3 mega watts face utility woes.

Renewable small scale UTILITY market rescue PART ONE

Hello everyone, Sun Source Solar Brokers here to talk about how renewable small scale solar project at 3 Mega Watts or less may be in danger…

Solar programs which produce less than 3 megawatts are getting shunted aside by the utilities.
Overall the renewable energy market is doing well in California, but of the three major market niches, the small scale market is struggling quite a bit. These three major markets include:

1. Over 20 megawatts, which tap into the standard auctions of the state’s portfolio
2. 20-3 megawatts, which tap into the RAM (Renewable Auction Mechanism)
3. >3 megawatts, which taps into the ReMAT program, which is a new program featuring a targeted tariff.

This ReMAT program has serious limitations, though. Here we seek to deduce how California can spark a resurgence in the >3 megawatt market niche. This niche is so crucial because all these projects are suitable for Fast Track interconnection, which only allows up to 3 megawatts. Fast Track is a much more inexpensive alternative to the predominant cluster study interconnection process, as well as much faster, providing a serious benefit to developers and consumers.

A project which is less than 3 megawatts provides logistical flexibility, it can fit onto only 20 acres of land or less, or can be put on a big roof or in an open space. These modules connect to the distribution grid quickly and efficiently, making the grid that much more effective and efficient because of how distributed these projects often are. This counteracts the predominant mode of planning, the large centralized model, which is still very popular with renewable energy in California.
Considering all the good things that are provide by smaller-scale renewable energy projects it’s plausible to think that Californians would be dying to take advantage of these benefits, but the ReMAT program has consistently struggled over its lifespan.

The ReMAT program is relatively quite small, more like a piot than a true procurement program, only registering around 250 megawatts around the country. Furthermore the awards offered by PPA have been slow in the coming, with SCE giving just 13 megawatts over the span of 5 contract periods, PG&E offering 28 megawatts (mostly produced in peak), and SDG&E offering 13 megawatts (entirely produced in peak) .

Each utility offers ReMAT contracts every two months, but since just 5 megawatts can be awarded for each different type of product, SCE and PG&E can provide just 15 megawatts over this 2 month span, whereas SDG&E cannot even offer that. With the potential of over 200 megawatts being awarded with ReMAT over these opening five selling windows, just 54 megawatts have been awarded. This shows the logistical challenges the program faces.

There’s no way for an applicant to ReMAT can know what the price of their contract will be, whereas it’s considered crucial to know the contract price with a feed-in tariff. Knowing this price provides stability and confidence that the relevant developers can calculate the time and economic costs suitable to each project and provide a sustainable economic model. Without the knowledge of these prices and the stability that comes with it due to the fact that the price is unknown until the contract is awarded within a certain contract timeframe, the ReMAT market is volatile. This was the initial intention to allow the price of ReMAT contracts to adjust to market demands and expectations, but without the requisite certainty and confidence for developers less and less contracts are being awarded.

 

Article written by Jennifer Coleman of Sun Source Solar Energy Brokers, providing solar brokering, brokerage, and solar energy consulting services in Santa Rosa, Marin, Sonoma, Napa, Solano and San Francisco Counties. For more information, please visit www.SunSourceSolarBrokers.com

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525 East Cotati Avenue, #220
Cotati, California 94931
707-888-7046

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