our joint proposal - California Housing Partnership

Transcription

BEFORETHEPUBLICUTILITIESCOMMISSION
OFTHESTATEOFCALIFORNIA
OrderInstitutingRulemakingtoDevelopa
SuccessortoExistingNetEnergyMetering
Rulemaking14-07-002
TariffsPursuanttoPublicUtilitiesCodeSection
(FiledJuly10,2014)
2827.1,andtoAddressOtherIssuesRelatedto
NetEnergyMetering.
JOINTPROPOSALBYTHECALIFORNIAHOUSINGPARTNERSHIP,CALIFORNIA
ENVIRONMENTALJUSTICEALLIANCE,BRIGHTLINEDEFENSEPROJECT,NATURALRESOURCES
DEFENSECOUNCIL,ANDNATIONALHOUSINGLAWPROJECT(NONPROFITSOLAR
STAKEHOLDERSCOALITION)ONIMPLEMENTATIONOFASSEMBLYBILL693
MattSchwartz,PresidentandCEO
EddieH.Ahn,ExecutiveDirector
WayneWaite,PolicyDirector
DiliniLankachandra,LegalFellow
CaliforniaHousingPartnershipCorp.
BrightlineDefenseProject
369PineStreet,Suite300
1028AHowardStreet
SanFrancisco,CA94104
Telephone:775-771-5550
Telephone:415-252-9700
Email:[email protected]
ShanaLazerow,AttorneyforCalifornia
TovahTrimming,AttorneyforCalifornia
EnvironmentalJusticeAlliance
EnvironmentalJusticeAlliance
CommunitiesforaBetterEnvironment
EnvironmentalLaw&JusticeClinic
120Broadway,Suite2
GoldenGateUniversitySchoolofLaw
Richmond,CA94804
Telephone:415-369-5340,415-442-6549
Telephone:510-302-0430x18
JimGrow,KentQian
PeterMiller,SeniorScientist
AttorneysforNationalHousing
MariaStamas,Attorney
LawProject
NationalResourcesDefenseCouncil
703MarketSt.,Suite2000
111SutterStreet,21stfloor
Email:[email protected];[email protected]
Date:August3,2016
Rulemaking14-07-002
PROPOSALFORTHEIMPLEMENTATIONOFAB693
NonprofitSolarCoalition
JointSubmission
August3,2016
TableofContents
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
Introduction
ProgramFunding
ProgramEligibility
ProgramTargeting
TenantPVAllocations
TenantBenefits
SolarFinancingandOwnershipStructures
IncentiveStructure
LocalHiring
EnergyEfficiency
EnergyStorage
ProgramAdministration
Conclusion
Appendices
ii
Page
4
10
17
23
28
35
43
47
62
69
76
89
97
99
BEFORETHEPUBLICUTILITIESCOMMISSION
OFTHESTATEOFCALIFORNIA
OrderInstitutingRulemakingtoDevelopa
SuccessortoExistingNetEnergyMetering
Rulemaking14-07-002
TariffsPursuanttoPublicUtilitiesCodeSection (FiledJuly10,2014)
2827.1,andtoAddressOtherIssuesRelatedto
NetEnergyMetering.
JOINTPROPOSALBYTHECALIFORNIAHOUSINGPARTNERSHIP,CALIFORNIA
ENVIRONMENTALJUSTICEALLIANCE,BRIGHTLINEDEFENSEPROJECT,NATURALRESOURCES
DEFENSECOUNCIL,ANDNATIONALHOUSINGLAWPROJECT(NONPROFITSOLAR
STAKEHOLDERSCOALITION)ONIMPLEMENTATIONOFASSEMBLYBILL693
PursuanttotheRulesofPracticeandProcedureoftheCaliforniaPublicUtilities
Commission(Commission),theCaliforniaHousingPartnershipCorporation(CHPC),California
EnvironmentalJusticeAlliance(CEJA),BrightlineDefenseProject(Brightline),theNatural
ResourcesDefenseCouncil(NRDC),andtheNationalHousingLawProject(NHLP)collectively
referredhereinastheNonprofitSolarStakeholdersCoalition,herebysubmitaJointProposalto
implementtheMultifamilyAffordableHousingSolarRoofsProgram(MultifamilySolarRoofs
Program)enactedbyAB693.
TheNonprofitSolarStakeholdersCoalitioncompriseofalargeanddiversegroupof
nonprofitorganizationsincorporatedintheStateofCaliforniathatadvocateonbehalfofthe
interestsoflowincomerenterhouseholds,low-incomeanddisadvantagedcommunities,
nonprofitmultifamilyaffordablehousingorganizationsandthoseworkingtoreduceenergy
consumptionandgreenhousegasemissionsandtocreatecleanerandhealthiercommunitiesin
California.
ThemembersoftheNonprofitSolarStakeholdersCoalitionhavecometogetherin
commoncausetodevelopandsubmitthisJointProposalforimplementingtheMultifamily
SolarRoofsProgram.Thehouseholdsandcommunitiesthatweadvocateforarethedirectand
theintendedbeneficiariesoftheAB693legislation:householdsvulnerabletorisingenergy
prices,havehighhouseholdenergycostburdens,havebeenlargelyunderservedbyCalifornia’s
renewableenergyandenergyefficiencyprograms,andoftenresideingeographicareas
1
disproportionatelyburdenedbyhighratesofpoverty,socio-economicdisadvantages,and
multiplesourcesofpollutionandotherenvironmentalriskfactors.Ourobjectiveinworking
togetheristoassisttheCommissioninmeetingitsresponsibilitiestodevelopaprogramdesign
thatsatisfiesthelegislativemandatesofAB693,respondstothelong-termenergyneedsof
low-incomerentersanddisadvantagedcommunities,andcontributestothebroaderpurposes
servedbytheimplementationoftheprogramincludingjobplacementandreducing
greenhousegasemissions.
TheJointProposalbytheNonprofitSolarStakeholdersCoalitionincludesadetailed
programdesignthatisresponsivetoeachofthequestionsandsubjectareasoutlinedinthe
AdministrativeLawJudge’s(ALJ)July8,2016ruling(ALJRuling)andadditionalareasthatare
essentialtotheimplementationoftheMultifamilySolarRoofsProgram.Firstandforemost,the
MultifamilySolarRoofsProgramisfundamentallyatransformationalprogram.TheMultifamily
SolarRoofsProgramwillpotentiallyreachoveronethirdofthepublicallysupportedaffordable
multifamilyrentalhousingmarketinCalifornia.Theprogram’sscope,whichprovidesaplatform
forintegratingenergyefficiency,solarPV,andenergystoragestrategies,willinfluencethe
energyfutureofover150,000low-incomehouseholds,andshapeenergyuseandenergycost
acrossthissegmentofthehousingmarketfordecadestocome.TheNonprofitSolar
StakeholdersCoalitionaskthatthesefactsandconsequencesrelatedtothesignificanceofthe
programbeattheforefrontoftheCommission’sdeliberations.
TheJointProposalgivesconsiderableattentiontomattersofallocatinggenerationand
economicbenefitstolow-incometenants,therequirementforgeographicdiversityandspecial
effortsneededtoaddresstheneedsofCalEnvironScreendisadvantagedcommunities(DACs),
theintegrationofenergyefficiencygoalsintotheprogramstructure,theeligibilityofenergy
storageanditsroleinpreservingandenhancingenergybenefitsforthismarket,andthe
incentivestructureneededtoaddressfinancialbarriersandscaleinvestmentinsolarenergy
systems.TheJointProposalalsoincludesrecommendationsforathird-partystatewide
ProgramAdministratorandtheadministrativeprocessesanddocumentationrequirementsto
implementtheprogram.
2
TheALJRulingalsoreferencestheOctober21,2015ALJRulingrequestingpartiesto
PhaseIoftheAB327proceedingtocommentonAB693abilityto“counttoward”the
Commission’sobligationtodevelopspecificalternativesdesignedforthegrowthofDistributed
Generationindisadvantagedcommunities.TheNonprofitSolarStakeholdersCoalitionreminds
theCommissionthatownersofaffordablehousingpropertieseligibleunderAB693didnot
haveareasonableopportunitytorespondtothequestionspresentedintheOctober21,2016
ALJRulingatthattime.SinceAB693targetsaffordablehousingpropertiesandtheinstallation
ofeligiblesolarsystemscanonlybeaccomplishedunderaprogramresponsivetotheneedsof
propertyownersandtenantsresidingattheseproperties,thisomissionresultedinthe
exclusionoftheviewsofkeystakeholdersspecificallyincludedunderAB693.Followingthe
issuanceoftheSecondAmendedScopingMemoandRuleonMarch4,2016,CHPC,CEJA,and
BrightlinejointlysoughtclarificationoftheScopingMemoandfiledaMotionrequestingpublic
workshopstoengage,educateandinformkeyconstituencygroupsaboutkeyissuesand
questionsaffectingtheimplementationAB693beforedevelopingandsubmittingproposalsfor
implementation.NoactionwastakenonthisMotion.
Inresponsetothisgap,membersoftheNonprofitSolarStakeholdershavespent
considerabletimeandresourcestoactivelyengageourconstituenciesandobtainfeedbackon
thedesignoftheMultifamilySolarRoofsProgram,incentivestructure,andrequirements.
Whilethepublic’sinterestandouroutreacheffortswouldhavebenefitedfromtherequested
publicworkshops,weareconfidentthattheJointProposalfairlyrepresentstheinterestand
viewsofourconstituencies.TheNonprofitSolarStakeholdersCoalitionrequeststhatthe
Commissiongiveitsfullattentiontotheissuesandrecommendationspresentedinour
proposalsothattheinterestsoftheintendedbeneficiariesoftheAB693legislationhavean
appropriatevoiceinthisproceeding.
WethanktheCommissionfortheopportunitytosubmitproposalsandcommentson
thisimportantandtransformativeprogramandforitsthoughtfulconsiderationofourJoint
Proposal.
3
I.
Introduction
Assembly Bill (AB) 693, enacted on October 8, 2015, established the Multifamily
Affordable Housing Solar Roofs Program (AB 693 or Multifamily Solar Roofs Program). The
Multifamily Solar Roofs Program is a legislative response to the profound gap in the level of
solarinstallationsservinglow-incomerentersanddisadvantagedcommunities.
Thelegislationseekstoprovidelow-incomerenterslocatedinmultifamilyhousingwith
greateraccesstocleanenergysolutions.Inenactingthebill,theLegislaturefoundanddeclared
that:
Itisthegoalofthestatetomakequalifyingsolarenergysystemsmoreaccessibleto
low-incomeanddisadvantagedcommunitiesand,asinthecaseoftheMultifamily
AffordableHousingSolarRoofsProgram,toinstallthosesystemsinamannerthat
representsthegeographicdiversityofthestate.1
Thelackofsolaraccessbylow-incomehouseholdsanddisadvantagedcommunitieswas
acoreelementinthejustificationforenactingthebill,asevidencedbytestimonypresentedin
supportofAB693.OnJuly13,2015,theCaliforniaEnvironmentalJusticeAlliance(CEJA),the
primarysponsorofthelegislation,providedtestimonytotheSenateCommitteeonEnergy,
Utilities,andCommunicationsthat“evenwiththeexistingrenewableenergyprogramsforlowincomeanddisadvantagedcommunities,therehasonlybeenlessthan1%penetrationinto
disadvantagedcommunities.”2Similarly,atthesamehearing,arepresentativeoftheMASH
Coalitionstatedthat“thegrowthinsolarinCalifornia’sresidentialmarketsfacilitatedbytheCSI
Initiativehaslargelybypassedlow-incomerentersanddisadvantagedcommunitiesinCalifornia
[and]ananalysisbytheCenterforAmericanProgressreportedthatonly4.2%ofthesolar
installationsundertheCaliforniaSolarInitiative(CSI)servedhouseholdswithincomesofless
than$40,000peryear.”3
MajorProgramGoalsandBeneficiariesofAB663
1
AB693Section1(e).
TestimonyofStrelaCervas,SenateCommitteeonEnergy,Utilities,andCommunications.Public
hearingonAB693,July13,2015.
3
TestimonyofRandallSimmrin,SenateCommitteeonEnergy,Utilities,andCommunications.Public
hearingonAB693,July13,2015.
2
4
AB693wasenactedtoprovideanewframeworktoaffirmativelymitigatebarrierstosolarPV
accessataffordablerentalproperties,andtoensurethatbenefitsfromrenewableenergyare
availabletotheseunderservedmarkets.TheintendedbeneficiariesoftheMultifamilySolar
RoofsProgramarelow-incomerentersresidingineligibleaffordablemultifamilyproperties.In
providingthesebenefits,thedesignoftheMultifamilySolarRoofsProgrammustcarryout
variousprogrammaticpurposes,whicharesummarizedinTable1below
TABLE1–MajorProgrammaticPurposesofAB693
ScopeofProgram
Allocationsfrom
Systems
Benefitsfrom
Systems
IncentiveStructure
Hiring
ConsumerProtection
§ Installeligiblesolarenergysystemsateligibleaffordable
multifamilyproperties.
§ Ensuregeographicdiversityforsolarenergysystemsinstalled
throughtheprogram.
§ Facilitateenergyefficiencyimprovementsinconjunctionwith
solarenergyinstallations.
§ Provideeconomicbenefitsindisadvantagedcommunities.
§ Advancepoliciesforrenewableenergyandreducingemissions.
§ Allocateelectricitycollectedanddistributedfromeligiblesolar
energysystemtoutilitycustomersatqualifiedaffordable
multifamilyrentalhousingsites.
§ Reducepeakenergyuse.
§ Adoptutilitytariffsthatprovide,andcontinuetoprovide,net
economicbenefitstolow-incometenants.
§ Setincentivelevelstomakesolarenergysystemsfinancially
feasibleandtoaccountfor“splitincentive”barriers.
§ Alignincentivelevelswithreasonableestimatesofsolarcosts.
§ Reduceincentivelevelstoaccountforresourcesandother
projectcontributionsthatoffsetprojectinvestmentcosts.
§ Provideprojectfinancingtoolswherenecessaryandappropriate
tosupportincentivestructuresandmaximizeratepayerbenefits.
§ Providealocalhiringprogramtoplacequalifiedpersonsfrom
disadvantagedcommunitiesinjobscreatedbythesolar
program.
§ Protectandpreserveenergybenefitsprovidedtoprogram
participantsandratepayers.
§ Safeguardaffordablehousingpropertiesandtenantsfrom
financialrisks.
5
AdditionalPurposes
AB693mustsupportotherlegislativemandatesincludingpoliciesgoverningsolar
installations,prioritiesapplicabletothesourceoffundingforAB693,andstatewideenergy
efficiencygoalsapplicabletoutility-fundedprograms.Theseadditionalpurposesare
summarizedinTable2below.
TABLE2–RelatedStatutoryPurposes
SB1
Section748.5
SB350
AB802
SB1establishedbasicrequirementsapplicabletosolarPVinstallations
undertheCaliforniaSolarInitiative.PurposesunderSB1thatare
applicabletoAB693’sprogramdesigninclude:
§ Facilitatecost-effectiveinvestmentsinpeakelectricity
generationcapacitywhereratepayersrecoupthecostoftheir
investmentbyavoidingpurchasesofelectricityatpeakrates.
§ Providemonetaryincentivesforsolarenergysystemsthathave
theprimarypurposeofcollectinganddistributingsolarenergy.
§ Requirereasonableandcost-effectiveenergyefficiency
improvementsinexistingbuildingsasaconditionofproviding
incentivesforeligiblesolarenergysystems.
§ Developfinancingoptionsthathelpoffsettheinstallationcosts
ofthesolarenergysystems.
ProgramfundingforAB693isauthorizedunderSection748.5ofthe
PublicUtilitiesCode,whichspecifiesthateligiblefundingusesinclude
cleanenergyandenergyefficiencyprojects.ThepurposeofSection
748.5tofundabroadrangeofintegratedcleanenergysolutions
shouldbereflectedintheprogramdesign.
AB693wasenactedinthesamelegislativesessionasSB350.SB350
setsagoaltodoubleenergyefficiencysavings.ItrequirestheCPUCto
adoptenergyefficiencyanddemandreductiontargetsandto
implementthetargetsthroughprogramsthatprovidefinancial
incentives,rebates,technicalassistance,andsupportcustomersto
increaseenergyefficiency.TheimplementationofAB693providesa
meanstoaddressthepurposesofSB350.
AB802,enactedonOctober8,2015,requiresutilitiestoprovide
energyusageinformationtomultifamilypropertieswithfiveormore
activeresidentialornonresidentialutilityaccountsandestablishes
energybenchmarkingrequirementsforthecoveredproperties.
ImplementationoftheprogramwillbeginonJanuary1,2017.As
such,energydatasharingandbenchmarkingsetbyAB802shouldbe
incorporatedintoAB693’sprogramdesign.
6
AB693’sMarketObjectivesandProgramFrameworkareDifferentthanMASH
Thegoaltoinstallatleast300megawatts(MW)ofnewsolarcapacityunderMultifamily
SolarRoofsProgramisordersofmagnitudegreaterthanwhatwasproposedoroccurredunder
MultifamilyAffordableSolarHousing(MASH).Withfundinglevelsupto$100millionannually,
theMultifamilySolarRoofsprogramcouldbeinstalledonover2,000properties,comprising
morethan150,000low-incomerenters,andreachingroughly30%oftheaffordablemultifamily
housingmarketinCalifornia.
ThisscaleandscopeoftheMultifamilySolarRoofsProgramwillhaveasignificant
transformativeeffectonCalifornia’saffordablemultifamilyrentalhousingmarket,andhavea
lastingeffectofCalifornia’saffordablehousinginventoryfordecadestocome.Assuch,
significantattentionandeffortsareneededtoensurethatAB693’sprogramdesignanticipates
thelong-termenergyissuesaffectingthismarketsegment.Themarkettransformationthatwill
occurunderAB693isalsoanunprecedentedopportunityformultifamilypropertiestoplaya
pivotalroleintheCommission’sstrategiesandplanstomoveCaliforniatoasmartergrid.
AsaresultofsignificanttransformationcontemplatedbyAB693andtheopportunityto
facilitatethischangeinamannerthatadvancesthetransitiontoasmartgridinlow-income
markets,anypremisethatAB693ismerelyanextensionoftheMultifamilyAffordableSolar
Housing(MASH)programmustberejected.TheAB693’slegislativehistoryalsoarguesstrongly
againstthisconclusion.
WithintheLegislativeCouncilsDigestandthetextofAB693thereisnostatementthat
theMultifamilySolarRoofsProgramwasintendedasanextensionofMASH.Infact,thereare
onlythreereferencestoMASHwithinthetextofAB693andnoneofthosereferencesstateor
inferthatAB693wasintendedtoextendMASHoritsprogramstructure.4
Onthecontrary,theCPUCanalysisofAB693statedthat:
4
WithinAB693,MASHisfirstreferencedintheLegislativeDigestinthecontextofthe10%set-asidefor
theSASHandMASHprogramsundertheCaliforniaSolarInitiatives.Thesecondreferenceisinsection
2870(g)(1).MASHismentionedinthecontextofutilitybillreductionsbeingachievedthroughtariffs
thatallowfortheallocationofcredits,“suchasvirtualnetmeteringtariffsdesignedfortheMultifamily
AffordableSolarHousingprogram….”Thethirdreferenceisinsection2870(j)(1)totherequirementthat
assessmentsoftheAB693programsenttotheLegislatureincludeasummaryoftheothersolar
programsincludingMASH.
7
TheMultifamilyAffordableHousingRenewablesProgramwouldhaveseveralimportant
differencesfromthecurrentMultifamilyAffordableSolarHousing(MASH)andSingle
FamilyAffordableSolarHomes(SASH)incentiveprograms.5
Severalofthesedifferencesarespecificallydiscussedintheanalysis,includingtheinclusionof
other“qualifyingrenewableenergysystems”inadditiontosolar-electricsystems.
Indeed,throughoutthelegislativeprocesslegislators,committeestaff,andprogram
stakeholdersaskedquestionsaboutthesimilaritiesanddifferencesbetweenwhatwas
proposedunderAB693andthecurrentMASHprogram.Inresponse,briefingmaterialswere
publicallydisseminatedtolegislators,committeeandlegislativestaffs,andotherstakeholders
thatidentifieddeficiencieswithcurrentsolarPVprogramsandapproachesforservinglowincomehouseholdsinmulti-tenantbuildings,andidentifiedprogramelementsinAB693that
providedadvantagesovertheMASHprogram.ThesematerialsincludeanAB693FAQ
documentsenttoaffordablehousingstakeholdersonSeptember7,2015immediatelybefore
theSenatevote,andonJune30,2015,whichisprovidedinAppendixA.6Thesepublically
disseminatedmaterialsaswellasstatementssuchasthepreviouslyreferencedtestimonyby
theMASHCoalitionthat“currentsolarprogramshavenotpenetratedtheaffordablehousing
markets”andhave“largelybypassedlow-incomerentersanddisadvantagedcommunitiesin
California”makeitclearthatnewapproachesandsolutionswerebeingsoughtthroughtheAB
693legislativeinitiative.
Moreover,ifitwastheintentoftheAB693sponsorstocontinuetheMASHprogramor
retainthesameprogramstructure,thelegislaturecouldhaveandwouldhaveextended
fundingforaMASH3.0programasthelegislaturedidwhenextendingfundingfortheMASH
2.0.7NeitheroutcomewasincludedintheenactedAB693legislation.Therefore,statements
5
Curran,ElizabethandKochanowsky,Amy,CaliforniaPublicUtilitiesCommission,EnergyDivision,
“DivisionAnalysis:MultifamilyAffordableHousingRenewablesProgram.”
6
BriefingmaterialsshowninAttachmentAweresenttoHousingCalifornia,theCaliforniaHousing
Consortium,theSouthernCaliforniaAssociationofNonprofitHousing,theCaliforniaCoalitionforRural
Housing,theNon-ProfitHousingAssociationofNorthernCalifornia,theSanDiegoHousingCommission,
andtheCaliforniaHousingPartnershipCorporation.
7
SeeAB217(Bradford,2013),availableat
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB217.
8
thatAB693“wasdesignedaroundDecision15-01-027(AB217orMASH2.0proceeding”8areat
bestinconsistentwiththepublicrecord,and,asapointofdepartureforconsideringhowto
implementthenewMultifamilySolarRoofsProgram,aremisleading9andapparentlydrivenby
parochialinterests.
Insummary,AB693mustbetakenuponitsowntermsandresponsiblyweighthe
broadimpactsthisprogramwillhaveonlow-incomerentersandpropertyownersindeveloping
aprogramdesignthatisresponsivetoanewsetofpurposesandlegislativemandates.
8
EverydayEnergy,NoticeofExparteCommunication,July1,2016.
ThereareseveralstatementintheNoticeofExparteCommunicationthatmeritrebuttal.Forexample,
thefocusonaffordablemultifamilyhousinginAB693wastoensurethatinstalledsolarenergysystems
continuetobenefitlow-incomerentersovertheusefullifeofthesystem.Affordablehousingtypically
hasverylongaffordabilityperiodsinwhichrentsarerestrictedupto55years.Thesesamerestrictions
donotexistforothermarketsegments.AB693wasnotintended,assuggestedintheNotice,to
readdresstheconflictsbetweenEverydayEnergyandShorebreakintheMASHproceedingoverthe
eligibilityofmobilehomes.Additionally,theprogramproposaldisseminatedtoSenatorHuesoand
otherpublicofficialsinFebruarywouldhaverequiredCAREhouseholdsatmultifamilypropertiesto
convertoroptintostandardutilityrateschedules.Thisapproachwouldhaverequiredadded
enrollmentcomplexitiesandminimumtenantPVinstallationsandotherprotectionstoensurethatthe
programwouldnotharmCAREhouseholds.Thisstructurefordeliveringtenantbenefitswasrejected,
andisaltogetherdifferentfromAB693andMASH.Furthermore,thestatementthattheMASHprogram
isoversubscribeddoesnotconnotethattheprojectsinthereservationqueuewillbeimplementedas
proposed.WeareconcernedthattheMASHreservationsinthequeuemaybeoverstatedfromwhat
mayactuallybeaccomplished.Challengesandfinancialuncertaintyassociatedwithutilityallowance
adjustments,overlookedbyMASH,canadverselyaffectthescalingofsolartoserveresidents.Lastly,
contrarytothesuggestionthatEverydayEnergyandCALSEIAdraftedandareresponsibleforAB693,
environmentjusticeorganizationswerealreadyworkingwithCALSEIAonthedevelopmentofaproposal
toservelowincomehouseholdsanddisadvantagedcommunitieswhenEverydayEnergyjoinedthe
discussion,andthatCEJAhadaleadroleinthedraftinganddevelopmentofthelegislationthatwas
eventuallyenacted.
9
9
II.
ProgramFunding10
TheMultifamilySolarRoofsProgramisfundedfromCapandTradeauctionrevenues.
Section2870(c)ofPart2ofDivision1ofthePublicUtilitiesCodeprovidesthat:
Thecommissionshallannuallyauthorizetheallocationofonehundredmilliondollars
($100,000,000)or10percentofavailablefunds,whicheverisless,fromtherevenues
describedinsubdivision(c)ofSection748.5fortheMultifamilyAffordableHousingSolar
RoofsProgram,beginningwiththefiscalyearcommencingJuly1,2016,andendingwith
thefiscalyearendingJune30,2020.11
Theuse,distribution,andmanagementofthisfundingresourcemustbeundertakenina
mannerconsistentwiththeregulationsandpoliciespertainingtogreenhousegas(GHG)
allowancesunderArticle5ofTitle17oftheCaliforniaCodeofRegulations,Sections95800to
96023,andtherequirementsadoptedbytheCommissionunderDecision(D.)12-12-033.
ContributionsofGHGAllowanceProceeds
TheallocationsmadepursuanttoSection748.5arefromGHGallowancesreceivedby
electricaldistributionutilitiespursuanttosubdivision(b)ofSection95890ofTitle17ofthe
CaliforniaCodeofRegulationsandmaybeusedforcleanenergyandenergyefficiencyprojects.
TheseutilitiesincludePacificGasandElectricCompany(PG&E),SouthernCaliforniaEdison
Company(SCE),SanDiegoGas&ElectricCompany(SDG&E),LibertyUtilities(CalPecoElectric)
LLC(Liberty),andPacifiCorp.
WeproposethatalloftheelectricalcorporationsberequiredtocontributeGHG
allowanceproceedstowardtheMultifamilySolarRoofsProgramtoensurethatlow-income
rentersthroughoutthestatehaveaccesstosolarenergysystems.Ifthecustomersofan
electriccorporationareincludedintheprogramdesign,theutilitymustberequiredto
contributeGHGproceedsasdirectedbyAB693.Theexclusionofoneormoreoftheelectrical
corporationsfromthisprogramcouldpotentiallyunderminetherequirementtoprovidebroad
geographicdiversityandsolaraccesstoqualifiedaffordablemultifamilyproperties.In
particular,exceptionstomakingGHGallowancecontributionsfromPG&E,SCE,andSDG&E
10
Questions18,19,20,and21oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
AB693amendmentstoPublicUtilityCode(PUC).Part2ofDivision1ofthePUC,Section2870(c).
11
10
shouldnotevenbeconsideredsincetherearelargenumbersofeligiblemultifamilyaffordable
propertiesandrenterswithineachoftheseutilities’servicejurisdictions.
ContributionLevels
Currently,roughly$1billioninannualallowancerevenuesaredistributedtoresidential
customersastheCaliforniaClimateCreditfromthedesignatedelectricalcorporations.The
tablebelowshowsanestimateof2015auctionproceedspreparedbytheCaliforniaAssembly
inSeptemberof2015,andpercentagecontributionfromeachutility.
Table3-ElectricIOUAllowanceProceedsAvailableforCleanEnergy
andEnergyEfficiencyProjects,2015
Forecastof2015
Percentof
Utility
AllowanceAuction
Auction
12,13
Proceeds
Proceeds
PacificGasandElectricCompany
$438,602,830
39.31%
SouthernCaliforniaEdison
$562,499,489
50.41%
SanDiegoGas&ElectricCompany
$98,717,335
8.85%
PacifiCorp
$11,870,145
1.06%
LibertyUtilities(CalPecoElectric)
$4,078,910
.037%
Total
$1,115,768,709
AB693contemplatesthatalloftheparticipatingelectricalcorporationswillcontributea
similarpercentageshareoftheirGHGallowancestosupporttheMultifamilySolarRoofs
program.
Inadditiontorequiringallelectricinvestor-ownedutilities(IOU)tocontributetowards
AB693,weproposethatthecontributionsfromparticipatingelectricalcorporationsbe
calculatedusingoneofthefollowingtwomethods,dependingonwhetherthetotalGHG
allowancesfortheyearbeingcalculatedexceed$1billion:
12
Source:AssemblyFloorAnalysis,September10,2015.AnalysisPreparedby:SueKateley
http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_06510700/ab_693_cfa_20150910_231003_asm_floor.html
13
Totalforecastofallowanceauctionproceedsfor2015includesallowanceproceedsthatwillwere
expectedtobereceivedin2015inclusiveoffranchisefeesanduncollectibles,andtheremainingbalance
ofallowanceproceedsreceivedinpreviousyears(inclusiveofinterest)thathasnotyetbeen
distributed.
11
§ Iftheallowancesforallelectricalcorporationstotal$1billionorless,eachelectrical
corporationshouldcontribute10%ofitsGHGallowancesforthatyear;
§ Ifthecombinedtotalallowancesexceed$1billion,eachelectricalcorporation’s
contributionshouldbebasedontheelectricalcorporation’spercentageofthetotal
allowancesforallparticipatingelectricalcorporationsmultipliedby$100million.
PursuanttotheALJ’srequest,tables4and5providequantitativeexamplesoftheabovedescribedapproaches.
Utility
PG&E
SCE
SDG&E
PacifiCorp
Liberty(CalPeco
Electric)
Total
Table4-ElectricIOUContributions
TotalAuctionAllowancesExceed$1Billion
AB693
%
GHG
%ofTotal
Allowances
Allowances Contribution Contributed
$438,602,830
39.31%
$39,309,476
8.96%
$562,499,489
50.41%
$50,413,628
8.96%
$98,717,335
8.85%
$8,847,473
8.96%
$11,870,145
1.06%
$1,063,854
8.96%
.037%
$4,078,910
$365,569
8.96%
$1,115,768,70
9
100%
$100,000,000
Table5-ElectricIOUContributions
TotalAuctionAllowancesEqualToorLessThan$1Billion
AB693
GHG
%
Utility
Allowances
Contributed Contribution
PG&E
$350,882,264
10.00%
$35,088,226
SCE
$449,999,591
10.00%
$44,999,959
SDG&E
$78,973,868
10.00%
$7,897,387
PacifiCorp
$9,496,116
10.00%
$949,612
Liberty(CalPeco
10.00%
$3,263,128
Electric)
$326,313
Total
$892,614,967
10.00%
$89,261,497
MechanismforDirectingAllocationsandDataConfidentially
TheregulatorymechanismfortheallocationofGHGallowancesandproceedsis
establishedunderArticle5ofTitle17oftheCaliforniaCodeofRegulations,CaliforniaCapon
GreenhouseGasEmissionsandMarket-basedComplianceMechanismstoAllowfortheUseof
12
ComplianceInstrumentsIssuedbyLinkedJurisdictions.Undertheseguidelines,theelectrical
corporationshallcalculatethevalueoftheseallowancesbasedontheaveragemarketclearing
priceofthefourquarterlyauctionsheldinthesamecalendaryearthattheallowancesare
allocated.Themonetaryvalueofallowancesreceivedbytheelectricalcorporationisdeposited
directlyintocomplianceaccounts.14
Weproposethattheelectricalcorporationsberequiredtoretainorreserve10%ofthe
GHGallowancevalueinanAB693reserveaccountpendingadeterminationbytheCommission
ontheannualprogramfundinglevelatthebeginningofeachfundingyear.Theannualprogram
levelshouldbebasedonthecumulativevalueofGHGallowancesforeachoftheparticipating
electricalcorporations.OncetheCommissionsetstheannualprogramlevelandthecalculated
contributionforeachelectricalcorporation,theCommissionshouldorderthetransferoffunds
fromtheelectricalcorporation’sAB693reserveaccounttotheAB693programaccount
administeredbytheProgramAdministrator.Themethodsfordeterminingthefundinglevels
fortheMultifamilySolarRoofsProgramandcalculatingthecontributionsforeachparticipating
electricalcorporationshouldbetransparenttoassureprogramstakeholdersandmembersof
thepublicthatthecorrectamountoffundsareallocatedtotheprogrameachyear.
Thisprocessdoesnotrequirethedisclosureofinformationconcerninginternalbidding
strategiesorbiddinginformation.Rather,whatisrequiredisthattheCommissionprovide
sufficientregulatoryoversightofthereportingandaccountingrequiredunderTitle17ofthe
CodeofCaliforniaRegulationsandalsoprovidetimelydisclosuresofthecumulativeannual
GHGallocationsandrevenuesreceivedbyeachparticipatingelectricalcorporationtobe
crediteddirectlytotheresidential,smallbusiness,andemissions-intensivetrade-exposedretail
customersoftheelectricalcorporationpursuanttosubdivision(b)ofSection95890ofTitle17
oftheCaliforniaCodeofRegulations.
FundingAvailabilityandAnnualAllocations
Theamountoffundingavailableonayear-to-yearbasisfortheMultifamilySolarRoofs
programwilldependontheresultsoftheauctions,whichareheldatscheduledquarterly
14
Article5ofTitle17oftheCaliforniaCodeofRegulations,Sections95800to96023.
13
intervalsthroughoutayear.Toprovideapredictablelevelofannualfundingforqualifying
projectsandaccountfortimedifferencesinthecollectionofauctionallowanceproceedsand
yeartoyearrevenueuncertaintiesassociatedwithauction-basedfunding,weproposethatthe
programfundinglevelsbesetannuallybasedontheauctionproceedsforthepreviousyear.
PursuanttoSection2870(c),thecollectionofreceiptssupportingAB693commenced
onJuly1,2016.PursuantSection2870(f)(1),theCommissionisrequiredtoauthorizetheaward
ofmonetaryincentivesforqualifyingsolarenergysystems.Underthisframework,afullyearof
scheduledauctionscollectionswillhavebeencompletedbyJuly1,2017.Theprogrambudget
forinvestmentsduringthefirstprogramyear,July1,2017toJune30,2018,wouldbesetbased
ontheGHGallowancerevenuescollectedthroughJune30,2017.Subsequentannualfunding
allocationsforprograminvestmentswouldsimilarlybebasedontheprioryear’sallowance
revenues.Programfundingnotobligatedorexpendedduringaprogramyearshouldbeeither
carriedoverinareservefundoraddedtotheannualfundingreceiptsforfutureyearsto
supportmoreprograminvestments.
ProgramFundingAfter2020
AB693furtherprovidesthat:
ThecommissionshallcontinueauthorizingtheallocationofthesefundsthroughJune
30,2026,ifthecommissiondeterminesthatrevenuesareavailableafter2020andthat
thereisadequateinterestandparticipationintheprogram.15
Atthispointtheoutlookforcontinuedfundingafter2020isuncertain.Inasmuchasthe
planninganddesignofAB693mustconsiderthequestionofwhetherfundingwillbeavailable
after2020,theCommissionshouldstateinitsdecisionhowandwhentheissueoffuture
programfundingwillbetakenupand,ifknown,whatfactionstheCommissionwillconsiderin
decidingwhetherrevenuesareavailable.
15
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(c).
14
EligibleUses
FundingforMultifamilySolarRoofsProgrammustsupportavarietyofadministrative,
technicalsupport,andcapitalinvestmentactivities.FundingunderAB693shouldprovidethe
following:
§ AdministrativeFunding:10%oftheannualprogramallocationsshouldbesetasideand
usedforprogramadministrationandtoprovideforenhancedprogramsupport
necessarytosuccessfullyimplementtheprogram.Inadditiontocarryingoutcore
administrativerequirements,suchasdevelopingprogramguidelines,managingprogram
applications,reservationandpaymentprocesses,verifyingprogrameligibility,
conductingoutreachtohousingorganizations,andundertakingperiodicprogram
evaluations,theimplementationofAB693willrequiretheProgramAdministratorto
undertakethefollowingsupplementalactionsasspecifiedinthelegislation:
i. Ensurealignmentofprogramcostsandaccountingofleveragedresourcesin
settingprogramincentivesandmakingperiodicupdatestoincentivestructure
requiredunder2870(f)(4)and(5)
ii. EnsurecompliancegeographicdiversityrequirementsunderSection1(e)
iii. Conductoutreachandprovidetechnicalassistancetopropertyownersandtenants
indisadvantagedandunderservedcommunitiestoincreaseaccesstosolarenergy
systems
iv. Engagecommunitybasedorganizationstofacilitatetenanteducation
v. DevelopprotocolsandmakecompliancedeterminationspursuanttotenantPV
allocationsandtenanteconomicbenefitsrequirementsunder2870(f(2)and
2870(g)(1)
vi. Monitorcompliancewithlocalhiringrequirementsunder2870(f)(6)
vii. Providetechnicalsupportforimplementingenergyefficiencyassessments
viii. Facilitate“one-stop”accesstoutilityenergyefficiencyprogramresourcesto
implementrequirementsunderSection2870(f)(7)
ix. Developprotocolsandverifycompliancewithsystemperformanceandoperation
andmaintenancerequirementsunderSection2870(f)(3)
x. ConductanalysisandmarketdemandassessmentsrequiredunderSection
2870(j)(1)and(2)
Thescopeoftheseadditionaladministrativeandsupportactivitiesjustifytheneedforthe
proposedbudgetlevel.
§ CapitalFunding–90%oftheannualprogramallocationsshouldbeexpendedoneligible
programcapitalcosts.Eligiblecapitalexpensesshouldincludeequipmentandlabor
coststoinstall:
i. PVsystemsservingresidentialunitslocatedateligiblemultifamilyproperties
inclusiveofrooftop,carport,andgroundmountedsolarenergysystems
ii. PVsystemsservingthecommonareasofeligiblemultifamilyproperties
15
iii. Energystoragesystemsintegratedwithon-sitePVsystemsinstalledat
multifamilyproperties
iv. EnergyefficiencymeasuresforamountsnotfundedbyratepayerandCapand
TradeutilityenergyefficiencyasdiscussedinSectionX.
§ GeographicDistributions–ToprovidetheProgramAdministratorwithflexibilityin
committingprogramresourcespursuanttotherequirementsforgeographicdiversity,
andtoimplementprojectsinatimelymanner,thefundingprovidedtotheMultifamily
SolarRoofsProgramshouldbeavailabletoanyaffordablemultifamilyrentalproperty
meetingtheeligibilityrequirementsandlocatedwithinanyoftheserviceareasof
contributingelectricalcorporations.Criteriaforensuringgeographicdiversityshouldbe
adoptedtoensurethefairallocationofresourcesacrossutilityjurisdictionsduringthe
overalldurationoftheprogram.
FundsControlandEvaluation
Section2870(j)(1)and(2)prescribeextensiveprogramreportingrequirementsthatwill
requiretheProgramAdministratortoputinplaceaccountingcontrolstomonitorandanalyze
programcommitments,reservations,obligations,andexpenditures.Theserequirements
mandatethattheProgramAdministratorevaluateprogramoutcomesandbenefitsinrelation
totheprogramcoststoassesstheeffectivenessoftheprogram,includingutilitybillreductions
toprogramparticipants,ratepayerbenefitsfromthereductionofCAREoutlays,environmental
benefits,etc.
16
III.
ProgramEligibility16
Programeligibilityislimitedtoaffordablemultifamilyrentalproperties.Aqualified
multifamilyaffordablemultifamilyrentalpropertymusthavefiveormorerentalhousingunits
servinglow-incomehouseholds,thatiscurrently,andcontinuestobe,subjecttodeed
restrictionsorotherpublicregulationsgoverninghouseholdincomelevelsandrent
affordability.Weproposedthattheseaffordablerestrictionsbeforaperiodof10years
followingthereceiptoffundingfromtheMultifamilySolarRoofsProgram.
UnderthespecificdefinitionprescribedbyAB693,low-incomeresidentialhousing
meansamultifamilyresidentialrentalcomplexfinancedwithlow-incomehousingtaxcredits,
tax-exemptmortgagerevenuebonds,generalobligationbonds,orlocal,state,orfederalloans
orgrantsinwhichtherentsofthelow-incomeoccupantsdonotexceedthoseprescribedby
deedrestrictionsorregulatoryagreementsimposedpursuanttothetermsofthepublic
financingorfinancialassistance.17Withinthisdefinition,low-incomemeansahouseholdwith
anincomeatorbelow80%ofthearea’smedianincome(AMI),whichisupdatedannuallyfor
eachcountybytheU.S.DepartmentofHousingandUrbanDevelopment(HUD).
Underthisdefinition,AB693furtherdivideseligiblepropertiesintotwocategories.A
qualifiedmultifamilypropertyeithermustbelocatedinaDisadvantagedCommunityasdefined
byCalEnviroScreen,ormustserveasubstantiallylowerhouseholdincomelevel,inwhich80%
oftheresidentshaveincomesatorbelow60%ofAMI.
ProfileofEligibleProjects
AsofJanuary2016,therewere6,023propertieswith425,168unitsinCaliforniathat
potentiallysatisfiedtheAB693eligibilityrequirements.Thisinventorywillgraduallyincrease
asnewaffordablehousingpropertiesareconstructedundertheLowIncomeHousingTaxCredit
(LIHTC)program.
16
Questions1,2,3,and4oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
AB693.Section2870(a)(3).ThissectionreferencesofSection2852(3)(a)(i)ofthePublicUtilitiesCode.
Seeathttp://codes.findlaw.com/ca/public-utilities-code/puc-sect-2852.html
17
17
DisadvantagedCommunities(DACs)–Section2870(3)(B)requiresthatDACsmustbeidentified
bytheCaliforniaEnvironmentalProtectionAgencypursuanttoSection39711oftheHealthand
SafetyCode.
ConsistentwiththismandateweproposethatDACdesignationsfortheAB693program
bedeterminedthroughtheuseoftheCalEnviroScreentool.18CalEnviroScreenassessesa
comprehensivesetofcommunityindicatorsincalculatingscoresandprovidesanobjective
basisfordeterminingoverallcommunityneed.WerecommendthattheCalEnviroScreentool
beusedeitheronautilityjurisdictionbyutilityjurisdictionbasisoronastatewidebasis
dependingonwhichapproachhasthebroadesteligibility.19Itappearsthatbyusing
CalEnvirScreenonautilityjurisdictionbasisinsteadofthecurrentstatewidebasismayensure
thatregionalconditionsandfactorsaffectingcommunityneedsaremorepreciselyweighted
andnotskewedbystatewideaveragescoresandthatthenumberofcensustractsbyutility
jurisdictionmightincrease.However,beforeadecisionisreached,ananalysisshouldbe
completedtodeterminewhichapproachprovidesthebroadesteligibility.
Currentlyapproximately20%oftheaffordablemultifamilypropertiesinCaliforniathat
meettheeligibilityrequirementsunderSection2852arelocatedinDACsidentifiedby
CalEnviroScreenonastatewidebasis.OfpropertieslocatedwithinIOUjurisdictions,
approximately30%oftheeligiblepropertiesareinDACs.Becausetheinventoryofaffordable
multifamilyhousingqualifiedundertheMultifamilySolarRoofsProgramisalmostentirely
comprisedofpropertiesmeetingtherequirementthat80%oftheresidentshaveincomesator
below60%oftheAMI,theuseofCalEnviroScreenwillnotmateriallyaffectthenumberof
qualifiedmultifamilypropertiesundertheprogram.ThepracticaleffectoftheDACeligibility
criteriaistodirecttargetedeffortsinareasthathavespecialneeds.Table6providesa
summaryofthenumberofeligiblepropertiesandunitswithinIOUjurisdictionsandDACsby
typeofhousing.
18
TheCalEnviroScreen2.0maybefoundat:http://oehha.ca.gov/ej/ces2.html.
TheCommissionrecentlyapprovedthisapproachofusingCalEnviroScreeninSCE’sandSDG&E’s
electricvehiclepilotprogramsinA.14-10-014andA.14-04-014.SeeD.16-01-045,p.138,andD.16-01023,p.41.
19
18
Table6–AffordableMultifamilyHousing
CompliantwithSection285220
State
IOUJurisdictions
DACswithinIOUs21
Properties
Units
Properties
Units
Properties
Units
4,213
312,237
2,932
225,173
921
75,187
1,422
98,812
918
63,549
249
19,276
388
19,119
315
15,214
91
4,851
6,023
425,168
4,165
303,936
1,261
99,314
LIHTC
HUD
USDA
TOTAL
CEJAandKevaladevelopedaGIS-basedtoolidentifyingeligiblemultifamilyaffordablehousing
properties.Thistoolisavailableat:https://keva.la/ceja.
CommunityChoiceAggregators(CCAs)–Section2870(i)statesthat“[t]hecommissionshall
determinetheeligibilityofqualifiedmultifamilyaffordablehousingpropertytenantsthatare
customersofcommunitychoiceaggregators.”
WeproposethatqualifiedmultifamilypropertiesthatareCCAcustomersshouldbe
includedintheMultifamilySolarRoofsprogram.Bytargetingunderservedaffordablehousing
marketsandlow-incomerenters,MultifamilySolarRoofsprogramwilladdressprogrammatic
gapsandcomplimentotherenergyprogramsavailableintheseareas.Wefurthernotethatthe
fundingsourceforAB69322wasestablishedtoprovidecustomersofelectricalcorporations,
includingcustomersinCCAs,withaClimateCredit.WeseenojustificationtoexcludelowincomeresidentsofCCAsfromthisprogram.
EligibilityDeterminations
Thereareseveralfactorsthatsignificantlysimplifytheprocessfordeterminingeligibility
ofaffordablemultifamilyrentalpropertiesunderAB693.Financialassistanceprovidedto
multifamilyhousingfromthepublicentitieslistedbelowdirectlysupportthedevelopmentand
20
PreparedbytheCaliforniaHousingPartnershipCorporation,January2016.Analysisisbasedon
housingdatacompiledbyCHPCfrompublicagencieswithregulatoryoversightresponsibilities.Data
doesnotincludefederally-supportedpublichousingpropertiesadministeredbypublichousing
authorities.Thesepropertieswouldaddapproximately350propertiesand37,650unitstothestatewide
total.
21
NumbersbasedonTop25%ofDACsasdeterminedonastatewidebasisusingCalEnviroScreen.
22
Subdivision(b)ofSection95890ofTitle17oftheCaliforniaCodeofRegulations.
19
operationoflow-income,verylow-income,andextremelylow-incomerentalhousing.This
assistanceisconditionedonstateandfederally-monitoredcompliancewithannuallyupdated
andofficiallypublishedhousingrentandincomerestrictions.
§
§
§
§
§
§
§
§
CaliforniaTaxCreditAllocationCommittee(TCAC)
CaliforniaDebtLimitAllocationCommittee(CDLAC)
CaliforniaDepartmentofHousingandCommunityDevelopment(HCD)
TheCaliforniaHousingFinanceAgency(CalHFA)
U.S.DepartmentofHousingandUrbanDevelopment(HUD)
U.S.DepartmentofAgriculture–RuralDevelopment(USDA-RD)
RedevelopmentAgencysuccessoragenciesingoodstandingwithHCD
Cityorcountygovernments,administeringHOMEFundsincompliancewithHUD
regulations.
Multifamilyrentalhousingassistanceprogramsadministeredbythepublicagencieslisted
abovesatisfybothAB693’srequirementthatthepropertyhaveadeedrestrictionorregulatory
agreementprescribingtenantincomeandrentlevelspursuantthetermsoffinancingor
financialassistance23,andAB693’srequirementapplicabletopropertieslocatedoutsideof
DACsthat80%ofrenterhouseholdshaveincomesatorbelow60%oftheareamedianincome.
Severalpublicagenciesandnon-profitorganizationsmaintaindatabasesofaffordable
multifamilypropertieswithintheStateofCaliforniathatcanbemadeavailabletotheProgram
Administratortodevelopalistofpropertieseligiblefortheprogram.Thisdatacouldassistthe
ProgramAdministratorinverifyingeligibilityandstreamliningtheeligibilityprocess.Alistof
qualifiedLIHTCandHUD-assistedmultifamilyproperties,preparedbytheCaliforniaHousing
PartnershipCorporation(CHPC)fromdataprovidedbythepublicagencies,isprovidedin
AppendixBandC.
Additionally,affordablemultifamilyrentalpropertieseligibleunderAB693aresubject
tostrictincomereportingandverificationrequirements.Federalandstatehousingagencies
requirepropertyownerstocollectandmaintainrecordsoftenanthouseholdincomes.Wherea
questionexistsaboutwhetheramultifamilyrentalpropertymeetsaparticularincome
standard,theProgramAdministratorcoulduseacopyofthecurrentrentrolltoverify
23
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(a)(3).Thissection
referencesSection2852(a)(3)(a)(i)ofthePublicUtilitiesCode.Seeat
http://codes.findlaw.com/ca/public-utilities-code/puc-sect-2852.html
20
compliancewiththeprogram’seligibilitystandardwithoutdisclosingprotectedtenant
information.
EligibilityRequirementsandDocumentation
Tomakeeligibilitydeterminations,werecommendthatthefollowrequirementsbe
adoptedfortheMultifamilySolarRoofsProgram:
§ PresumptionofEligibility–Affordablemultifamilypropertieswithadeedrestrictionor
regulatoryagreementfromoneoftheagencieslistedaboveshouldbepresumedeligible
fortheMultifamilySolarRoofsprogram.WerecommendthattheProgramAdministrator
developandannuallyupdatealistofprequalifiedaffordablemultifamilyrentalhousing
propertiesinconsultationstateagenciesandnon-profithousingorganizationsthat
maintaindataonCalifornia’saffordablemultifamilyhousinginventory.
§ RequirementsforPropertyCertificationofEligibility–Affordablemultifamilypropertieson
thepre-qualifiedlistshouldbepermittedtosubmitacertificationofeligibilitytoestablish
programeligibilitysignedbythepropertyownerorofficeroftheaffordablehousing
organization.Thecertificationshouldminimallyprovidethefollowinginformation:
i. Nameandaddressoftheaffordablemultifamilyproperty.
ii. Nameandcontactinformationforthepublicagencythatisresponsiblefor
regulatingtheproperty.
iii. Certificationthatthepropertyhasadeedrestriction,regulatoryagreementor
housingassistanceagreementwiththelistedpublicagency.
iv. Certificationthattheremainingperiodofaffordabilityonthepropertyisatleast
10yearsorininstanceswherethepropertyhaslessthan10yearsremainingon
theregulatoryagreement,thepropertyowneragreesthatthepropertywill
extendcurrentrentaffordabilityrestrictionsatthepropertyforatleast10years
asaconditionofreceivingincentivesunderthisprogram.24
v. Certificationthattenantincomesatthepropertymeetoneofthefollowing
incomeeligibilitystandards:
a. PropertyislocatedinaDACandthetenantincomesareatorbelow80%of
theAMI;
b. PropertyisnotinaDACand80%ofthetenantshaveincomesatorbelow
60%oftheAMI.
§ PropertiesFundedbyDesignatedAgenciesNotonaPre-QualificationList–Newly
developedpropertiesandotheraffordablehousingpropertiesthathaveadeedrestriction
orregulatoryagreementfromoneofthedesignatedpublicagenciesthatarenotonthe
24
SimilaraffordabilityrestrictionsaresetfortheCaliforniaLowIncomeWeatherizationProgramfor
LargeMultifamilyProjects.Therequirementsforthisprogramcouldbeusedasamodel.See:
https://camultifamilyenergyefficiency.org.
21
prequalifiedlistofpropertiesshouldbepermittedtomakearequesttobeaddedtothe
prequalifiedlistiftheycanprovideadditionalsupportingdocumentation.The
documentationincludes:
i. Copyofeachdeedrestriction,regulatoryagreementorhousingassistance
contractwiththelistedpublicagencyoragencies.
ii. RequirementsforPropertyCertificationofEligibility(listedabove).
§ PropertiesNotFundedByDesignatedPublicAgencies–Affordablehousingproperties
thathaveadeedrestrictionorregulatoryagreementfromapublicentityotherthanthe
designatedagenciesshouldbepermittedtomakearequesttobeaddedtothelistif
theycanprovidesupportingdocumentationincluding:
i. Letterfromthepublicentityornonprofitorganizationwithregulatoryoversight
responsibilitiesthatincludesinformationontherentrestrictionandother
affordabilitytermsandconditionsonthepropertypursuanttothetermsofthe
financingorfinancialassistance.
ii. Copyofeachdeedrestriction,regulatoryagreementorhousingassistance
contractwiththelistedpublicagencyoragencies.
iii. RequirementsforPropertyCertificationofEligibility(listedabove).
22
IV.
GeographicProgramTargeting25
TheMultifamilySolarRoofsprogramwasintendedtobebroadlyavailabletoall
qualifiedaffordablemultifamilyrentalproperties.ThespecificlegislativedirectioninAB693
requiresthatresourcesbeallocated“toinstallthosesystemsinamannerthatrepresentsthe
geographicdiversityofthestate.”26Thisrequirementprecludesafirst-comefirst-serve
approach,andcallsinsteadforallocationstobemadeusingabroadsetofgeographically-based
considerationsincludinghowresourcesaredistributedbetweenqualifiedmultifamily
propertiesthatarelocatedinDACsandqualifiedpropertiesthatarelocatedoutsideDACs.
WhileAB693doesnotprescribearequirementthattheMultifamilySolarRoofs
ProgramadoptfundingallocationsorspecificMWcapacitytargetsbasedonwhethera
propertyislocatedinaDACoroutsideofaDAC,werecommendgeographicprogramtargets
basedonfundingallocations.AnequitabledistributionoffundingbetweentheseDACandnonDACpropertieswillfurtherthelegislativegoaltoinstallqualifiedsystems“inamannerthat
representsthegeographicdiversityofthestate.”27
UnderAB693,settinggeographicprogramtargetsbasedonfundinglevelsismore
logicalthanaMWbasedtargetbecauseoftheuncertaintyaroundtheamountofannual
auctionproceeds,theneedfordollarsbeforeinstallationsandMWcanberealized,and
becausetheactualinvestmentspendingineachcommunityisdirectlycorrelatedwiththings
likejobtraining,jobplacement,andothereconomicdevelopmentopportunities.
DACFundingTarget
Undertheapproachproposedabove,wespecificallyrecommendthatfundingtargets
besetbasedonthepercentageofeligiblepropertiesthatarelocatedinCalEnviroScreenDACs
andpercentofqualifiedpropertieslocatedoutsideofCalEnviroScreenDACs.Inthisregard,as
showninTable6,thenumberofqualifiedmultifamilypropertiesinDACsisapproximately30%
ofthetotalqualifiedmultifamilypropertiesinIOUjurisdictionsasdefinedonastatewidebasis
usingtheCalEnviroScreentool(seetable6).AssumingCalEnviroScreenisusedonastatewide
25
Questions5,and6and23oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
AB693.Section1.(e)
27
AB693Section1(e).
26
23
basisfortheMultifamilySolarRoofsProgram,weproposedthat30%oftheprogram’sfunding
onanannualbasisbeallocatedforuseinDACs.IfCalEnviroScreenisusedbyIOUservice
territoryorsomecombinationofserviceterritoryorstatewide,thentheCommissionwould
needtocalculatethenewpercentagesofDAC-eligiblebuildingsandadjustthefunding
allocationaccordingly.
FlexibilityinManagingTarget
TosuccessfullyimplementtheMultifamilySolarRoofsProgram,theProgram
Administrator(PA)shouldhaveflexibilityduringafundingyeartomovefundsfroman
undersubscribedallocationcategorytoanoversubscribedcategorytoensurethatprogram
implementationisnotbottleneckedandsolarprojectsarebeinginstalledinatimelyand
efficientmanner.However,beforemovingfundsfromDACallocationsforthebenefitof
propertieslocatedoutsideofDACs,thePAshouldberequiredtoprovideadditionaloutreach
andtechnicalsupporttoundersubscribedareastoensurethatpropertieswithintheseareas
haveaccesstotheprogramfundingthatisavailable.Additionally,werecommendthatthePA
berequiredtofileanadviceletterbeforeshiftingfundstoensurethatstakeholdershavethe
opportunitytocommentontheproposedtransfer.
Anytransferthatisauthorizedshouldnotexceedthetotaldemandforincentivedollars
neededbytheotherbucket,andwhenapplicationsarereceivedintheundersubscribed
bucket,thoseapplicationsshouldbeprioritizedinanattempttopreservetheoriginalallocation
asmuchaspossible.ToensurethatfundingtargetsaremetforDACs,theProgram
Administratorshouldberequiredtomakeadjustmentsinfutureprogramyearallocationsto
ensurethatoverthecourseoftheprogramthefundingallocationtargetsforDACsaremeet.
OtherGeographicDiversityConsiderations
InadditiontoallocatingincentivedollarsaccordingtoDACandnon-DACdesignations,
TheProgramAdministratorshouldtrackreservationsandinstallationstoensuregeographic
diversitythroughoutCalifornia.AB693aimstoinstallqualifiedsystems“inamannerthat
24
representsthegeographicdiversityofthestate.”28Accordinglythedistributionofsolar
installationsandfundingcommitmentsisalsoimportantintermsofwhethertheprojectisin
urban,suburban,andruralcommunities.
WhilewedonotrecommendspecificfundingorMWtargetsbasedontheseorother
geographicdesignations,werecommendthattheProgramAdministratormakeeffortsto
ensurethatlow-incomemultifamilybuildingownersandtenantsinallgeographicsettings
benefitfromgoingsolar.ThisapproachcouldbesimilartowhatoccursintheSASHprogram
andtheeffortsmadetoensurethatallcountieswithinthestatebenefitfromprogram
investments.
ResourceAllocationPlanandGoals
Toimplementtheproposedtargets,werecommendthattheProgramAdministrator
prepareaResourceAllocationPlanandsetanannualfundingtargetsDACsandnon-DACthatis
basedonavailablefundingandassessmentofsolarmarketpotentialanddemands,aswell
generalconsiderationforachievingbroaderstatewidegeographicdiversityobjectives.
WeproposethattheResourceAllocationPlanshouldbedevelopedandupdated
annuallyinconsultationwithenvironmentaljusticeandothercommunity-basedorganizations
todevelopprioritiesandstrategiesformeetinggeographicdiversitygoalsandobjectives.The
goaloftheplanshouldbetodevelopgeneralcriteriaandguidelinesforallocatingresources
andshouldidentifyadditionalactionsnecessarytoaddresssolaraccessbarriers.Additional
actionsforDACsshouldminimallyincludeenhancedcommunityengagement,tenantand
propertyownereducationonsolarbenefits,andtechnicalsupportforprojectimplementation.
AnnualupdatestoResourceAllocationPlansshouldadjustallocationprioritiesandoutreach
effortstoensurethatgeographicdiversitygoalsandobjectivesareachievedthroughoutthe
durationoftheprogram.
Intrackingprogramallocations,werecommendthattheProgramAdministratoradopt
metricstohelpguideoutreachandtechnicalsupportactivitiesincluding:
i.
Numberofsolarinstallations(ProjectsreservedandInstalled).
28
AB693Section1(e).
25
ii. Numberoflow-incomerentersreceivingsolarbenefits(Projectsreservedand
Installed).
iii. NumberofCAREeligiblecustomersreachedbyprogram(Projectsreservedand
Installed).
iv. AmountofPVgenerationallocatedtooffsettenantusage(Projectsreservedand
Installed).
v. Numberoflocalhiresfromsolarprojects.
CountingTowardsAB327Compliance
AB693providesthattheMultifamilySolarRoofsprogram“maycounttowardthe
satisfactionofthecommission’sobligationtoensurethatspecificalternativesdesignedfor
growthamongresidentialcustomersindisadvantagedcommunities…”29
ThequalifiedpropertiesunderAB693representaverysmallsegmentoftheresidential
marketswithinDACs.EnergyDivisionstaffhavereportedthattherearenine(9)millionpeople
residingintop25%ofimpactedcommunitiesandthatonaverage,54%ofthetotalpopulation
DACsarelow-income30Incontrast,therearefewerthan100,000householdsresidinginAB
693-qualifiedmultifamilyhouseholdsinDACswithinIOUjurisdictions.
IfAB693adoptionratescountedtowardsthespecialeffortsunderAB327itcouldskew
thespecificalternativesadoptedpursuanttoAB327toanarrowsegmentoftheresidential
marketinDACs.ThisisbecauseAB327willlikelytargetothermarketsegments(e.g.,singlefamilyhomeownersorrenters,multifamilybuildingsthatarelessthan5units).Thisresult
wouldbecontrarytotheintentofAB327.Andwethereforestronglyrecommendagainst
countingAB693resultstowardsAB327implementationgoals.
Severalpartieshaveexpressedadesiretotargetdifferentmarketsegmentsforthe
purposesofAB327sinceAB693isalreadytargetedlow-incomemultifamilytenants,andother
programswithsimilarqualifyingcriteriacouldleaveoutmarketsegmentsnottargetedbyAB
29
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(b)(1).
EnergyDivisionStaffPaperPresentingProposalsforAlternativestotheNEMSuccessorTariffor
ContractforResidentialCustomersinDisadvantagedCommunitiesinCompliancewithAB327,June3
2015.Low-incomeisdefinedasatorbelow200%oftheFederalPovertyLevel,whichcorrespondswith
theincomeeligibilityrequirementsofCARE.
30
26
693,beduplicative,andadministrativelyburdensome.31Werecommendthatthedifferent
residentalmarketsegmentsareconsideredseparatelyintrackingsolaradoptionrates.For
example,installationsundertheAB693programshouldnotcounttowardsAB327obligations
ifthespecificalternativeadoptedpursuanttoAB327targetssingle-familyhomeowneror
rentersorlow-incomemultifamilybuildingswithlessthanfiveunits.ThiswillensurethatAB
693doesnotswallowupthe327programincontraventiontothemandateofbothAB327and
AB693.
31
See,e.g.,GreenliningOpeningCommentsonALJRulingSeekingCommentonAB693pp.5-6(Nov.2,
2015);GRIDOpeningCommentsonALJRulingSeekingCommentonAB693pp.4-9(Nov.2,2015);
MASHCoal.OpeningCommentsonALJRulingSeekingCommentonAB693pp.2-6(Nov.2,2015).
27
V.
TenantAllocations32
AB693statesthat:
Thecommissionshallrequirethattheelectricitygeneratedbyqualifyingrenewable
energysystemsinstalledpursuanttotheprogrambeprimarilyusedtooffsetelectricity
usagebylow-incometenants.Theserequirementsmayincluderequiredcovenantsand
restrictionsindeeds.33
ApriorityoftheMultifamilySolarRoofsprogramisforamajorityofthegenerationfrom
thesolarenergysystemtooffsetelectricityusedandpaidforbytenants.Compliancewiththis
mandatecanbeaccomplishedbyestablishingdesignrequirementsforthesolarenergysystems
supportedbytheprogramanddoesnotrequireadditionalcovenantsordeedrestrictions.The
appropriatedesignofqualifiedsolarenergysystemsataffordablehousingpropertiesmust
consideranumberoffactorsthatlimitsystemsizing,andalsobalancetheneedtooffset
electricityuseforbothresidentialunitsandcommonareastomakethesolarinstallation
financialfeasibleforthepropertyowner.Werecommendthatthedesignofthesolarenergy
systemconsiderthekeyfactorslistedbelow.
TenantElectricityUsage
DesigningaPVsystematamultifamilypropertybasedontenantusagecanbe
complicated.Usagevarieswidelyacrossunitsandtodateaccesstotenantutilitydatahasbeen
limited.Cautionisnecessarytopreventsystemover-sizingtominimizefinancialrisksto
propertyowners.
Californiaelectricityusageisamongthelowestpercapitainthecountry.TheCalifornia
PublicUtilitiesCommission(CPUC)reportsthatCalifornia’saverageresidentialelectricityusage
was542kilowatt-hour(kWh)permonthin2014,andwas519kWhpermonthin2015.34This
findingisconsistentwithareportpreparedbyEvergreenEconomicsfortheEnergySavings
32
Questions13and14oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(2).
34
ReaganR.RockzsffordeandMarziaZafar,GeospatialAnalysisofCalifornia’sUtilityServices,California
PublicUtilitiesCommission,May23,2016.
33
28
Assistance(ESA)andCaliforniaAlternativeRateforEnergy(CARE)programs,whichreported
thatCAREcustomersin2012hadanaverageelectricityusageof547kWhpermonth.35
Inestimatingtenantelectricityusageinmultifamilyrentalbuildingsitshouldbenoted
thatthedatainthereferencedreportsincludesresidentialhouseholdsinbothmultifamilyand
singlefamilyhousingandthereforelikelyoverstatehouseholdelectricityuseinmultifamily
rentalbuildings.Thereareseveralintuitivereasonswhysinglefamilyhomeswouldhave
greaterplugloadandlightinguse.Singlefamilyhomesarelargerthanaffordablemultifamily
units,havemorephysicalspaceformoredevices,andmoreoccupantsconsumingenergy
services.Occupantsinsinglefamilybuildingsalsotendtohavemorehouseholdincometo
spendonincreasedamenities,suchasadditionaldevicesordeviceswithpremiumfeatures.
Furtheranalysisisneededtoestimatethemultifamilyelectricityuseoncedatais
availablefromutilitycompanies.Tosetabenchmarkforthepurposesofthisproposalwe
estimatedthatperunitmultifamilyelectricityuseisonaverage70%to80%oftheaverage
residentialusageinthestate,orapproximately4,200kWhto4,800kWhannually.36Assuming
that2kWofPVcapacityisprovidedonaveragetoeachunit,thePVgenerationcouldoffset
60%to70%ofeachunit’selectricityuse.
SizingofPVsystemsatmultifamilypropertiesmustalsoconsiderwidedifferencesin
energyuseamongtenantsatamultifamilysite.Thedifferencesareillustratedinthechart
below,whichwascontainedinreportpreparedbyRedwoodEnergyevaluatingtheaccuracyof
energymodelingforapartmentcomplexes.37
35
EvergreenEconomics,NeedsAssessmentfortheEnergySavingsAssistanceandtheCalifornia
AlternateRatesforEnergyProgramsVolume1:SummaryReport,FinalReport,December16,2013.
PreparedforSouthernCaliforniaEdison,PacificGasandElectric,SouthernCaliforniaGas,SanDiegoGas
andElectricandtheCaliforniaPublic
UtilitiesCommission.
36
ThisestimateisgenerallyconsistentkWhusageseeninthelargeMultifamilyLowIncome
WeatherizationProgram.TheAssociationforEnergyAffordability(AEA)hasdevelopedatenantkWh
loadestimationtoolusingthe2009ResidentialApplianceSaturationStudy(RASS).TheRASSThestudy
yieldedenergyconsumptionestimatesfor27electricand10naturalgasresidentialend-usesand
appliancesaturationsforhouseholds.
37
RedwoodEnergy,IstheModelingProducedbytheCaliforniaUtilityAllowanceCalculatorAccurate?A
StudyofSevenApartmentComplexes,September15,2013.
29
Over a year, the average electricity use of One Bedroom apartment
while the gas usage is 5% higher than predicte
Over a year the average electricity use of a Two Bedroom unit is 2%
ThechartabovereinforcesthatinimplementingtheMultifamilySolarRoofsProgramcaution
and the average gas use matches the CUAC model to less than 1%.
shouldbetakentoensurethatPVinstallationsarenotdesignedtooffset100%ofthe
aggregatedtenantuseatamultifamilyproperty.Doingthiswouldresultinsometenantsbeing
allocatedmorecreditsthantheycoulduseduringayear.Becauseallofthecreditsgenerated
Armstrong, Winkler and Pfotenhauer
cannotbeusedtooffsetelectricityuse,thecost-effectivenessandeconomicsoftheinvestment
isreduced.BasedonthevariationsseenintheanalysisconductedbyRedwoodEnergy,we
recommendthatoffsetstoaggregatedtenantloadsbecappedat70%pendingfurtheranalysis
todeterminemoreprecisePVscalingcriteriaforPVsystemsinmultifamilybuildings.Inthis
regard,energydatasharingrequirementsunderAB802canassistpropertyownersin
normalizingtenantelectricityusagetopreventsystemover-sizing.
UtilityTariffs
Theeconomicsofsolarenergysystemsarealsoaffectedbyutilitytariffs.PVsystems
servingcommonareashavegreatergridparitythanlow-incomerentalunitsbecauseof
significantdifferencesintheutilityratestructure.Additionally,asTime-of-Use(TOU)tariffsare
adoptedwithlaterpeakperiods,theunderlyingeconomicsofstand-alonePVsystemsis
adverselyaffected.Inthesecircumstances,moreintegratedenergystrategiesthatcombine
30
g
energyefficiencyandenergystoragewithsolarinstallationarenecessarytoensurethatthe
investmentremainscosteffectiveandpreservesandenhancesthevalueoftheinvestmentto
thetenantsandpropertyowners.Thechangingeconomicsofthesolarenergysystemis
addressedinmoredetailintheproposal’sdiscussionofsolarenergysystemsinSectionXI.
Theseeconomicsconsiderationsshouldbereflectedinthedesignofthesolarsystem.
CommonAreasatQualifiedMultifamilyProperties
Qualifiedmultifamilypropertieshavebothresidentialunitsandcommonareasthatare
usedbyresidents.Commonareasincludereceptionareas,multi-purposerooms,laundries,
hallways,elevators,stairways,andparkingarea.Whilethelegislation’sclearfocusisonthe
electricityusagewithinresidentialunits,AB693doesnotexcludecoverageofotherbuilding
areasusedbytenants.Moreover,becauseparticipationintheprogramisattheelectionofthe
ownersofaffordablehousingproperties,whotypicallyaremostmotivatedbytheprospectof
reducingelectricalcostsforowner-meteredareas,coverageofcommonareascannotbe
excludedwithoutmateriallyandadverselyaffectingprogramparticipation.Reducingelectrical
costsincommonareasofrent-restrictedaffordablehousingalsohastheancillarybenefitof
reducingoperatingcostsandthereforetheneedtoincreaserentsovertime.Insummary,we
recommendthattheMultifamilySolarRoofsProgramprovidesufficientflexibilitytooffset
commonareaelectricityusageforownerstoparticipateintheprogram.
Master-MeteredProperties
TherequirementsenactedbyAB693donotspecificallyexcludemastermetered
properties.Indeed,AB693onlyrequiresthatsolarsystembe“primarilyusedtooffset
electricityusagebylow-incometenants”andnotentirelyoffsettenantusage.38Theprogram’s
statedpriorityofoffsettingtenantelectricityusageisfulfilledwhetherornottheelectricityis
directlymeteredtothetenantorprovidedtothetenantbythepropertyowner.
38
Cal.Pub.Res.Code§2870(f)(2)(emphasisadded);SeealsoCal.Pub.Res.Code§2870(g)(statingthe
requirementforwhentenantsparticipateviaVNEMinaseparatesectionofthebill,indicatingthatthat
therearetworequirementsunderthebill:oneforwhenthecommonareasareserved–thatthesystem
primarilyoffsettenantload-andanotherdescribingthebillreductionsanddirecteconomicbenefitsthe
tenantsreceivingtheprimaryoffsetmustreceive).
31
Excludingmaster-meteredpropertieswouldbedetrimentaltolow-incomerenters.In
thecontextofCalifornia’saffordablemultifamilyinventory,mastermeteredpropertiestypically
includeolderbuildings,whichhavehigherenergyuse,andbuildingsthatprovidehousingfor
specialneedsoratriskhousingpopulationssuchastheelderly,personswithdisabilities,singleroomoccupancyhousing,andtransitionalhousingforthehomeless.Thesepropertiesare
highlyvulnerabletoutilitycostincreases,whichcanadverselyaffecttheproperty’sfinancial
stabilityandaffordability.ExcludingthesepropertieswouldruncountertoAB693’sexpress
purposeofprovidingassistancetolow-incomecustomerstomakesuretheycanaffordtopay
theirenergybills,reducingenergybillsforCAREcustomers,andmakingsolarsystemsmore
accessibletolow-incomeanddisadvantagedcommunities.39
Additionally,formaster-meteredbuildings,theinstallationofsolarenergysystemsto
offsetelectricityusedbytenantisanimportantstrategyformakingoperatingfundsavailableto
providetenantservices,makebuildingimprovements,andpreserveaffordablehousingoptions
forvulnerableat-riskpopulations.WeviewtheseoutcomesastenantbenefitsunderAB693.
Thisisespeciallyimportantfornon-profithousingorganizations,whicharesubjecttoadded
restrictionsrequiringpropertyincometobeusedfortenantservicesandbuilding
improvements.
Whilewedonothaveaprecisecountofaffordablemultifamilyrentalpropertiesthat
aremaster-meteredbecauseofdatabaselimitations,weestimatethatapproximately20%of
theaffordablehousinginventoryismaster-meteredfortheelectricityusedbylow-income
tenants.TheCommissionshouldnotexcludethissignificantportionofthelow-income
multifamilymarketanditsvulnerabletenantsinneedofthebenefitsofgoingsolar.
CriteriaforCriteriaDesigningSolarPVSystemsandSizingIncentives
Toaddresstheissuesdiscussedabove,werecommendthattheMultifamilySolarRoofs
Programsetcriteriaforthedesignofsolarsystemsthataresupportedthroughtheprogram’s
incentivestructure.Specifically,werecommendthatthefollowingcriteriabeadoptedto
ensurethatsolarenergysystemsareproperlysizedandthatincentivesareappropriately
39
SeeAB693Section1(a),(b),&(e).
32
targetedtosolarenergysystemsthatoffsetelectricityusedbyorpaidforbylow-income
renters,whileprovidingflexibilitytoaddresssiteconditionsthatlimittheabilityoftheproperty
ownertoadequatelyservebothresidentsandcommonareas,andcircumstancethataffectthe
financialfeasibilityofthesolarinstallation:
§ BalancedSolarDesign:Thedesignofthesolarsystemsshouldbalancetheneedsofboth
theresidentsandpropertyownerstoensuretheproject’sfinancialfeasibilityaswellas
theowner’smotivationtoparticipateintheprogram.
§ PVAllocation:Atleast51%oftheelectricitygenerationshouldbeallocatedto
residentialunitsunlesssiteconditionslimitthesizingofthePVsystem.
§ TenantAreaService:Solarenergysystemsservingresidentialunitsshouldbelimitedto
70%orlessoftheaggregatedtenantelectricalusageatthequalifiedmultifamilysiteto
preventsystemoversizing,andshouldfactorinreductionstoconsumptionfromenergy
efficiencyimprovementsandbenefitsaccruedthroughstoragedeviceswhenapplicable.
§ CommonAreaService:Solarenergysystemsservingpropertycommonareasmayoffset
upto100percentofcommonareaelectricaldemandsafterconsideringtenantoffsets
andfactoringinenergyefficiencyimprovements.
§ MasterMeteredBuildings:Master-meteredbuildingsmayparticipateintheprogramon
theconditionthatenergysavingsfromtheinstalledsolarenergysystemsbeusedtopay
forsupportservicesprovidedtotenants,energyefficiencyimprovementsinresidential
units,orotherbuildingimprovementsbenefitingtenants.
§ PropertieswithSiteLimitations:Propertieswithsiteconditionslimitingtheabilityto
servebothresidentialunitsandcommonareasmayincreasetheallocationofPV
generationtooffsetcommonareausetotheextentneededtoensurethatthesolar
energyinstallationisfinanciallyfeasible.
§ AllocationstoTenantsandOtherQualifiedMultifamilySites:PVgenerationfromasolar
energysysteminstalledataqualifiedmultifamilysitemaybeallocatedtolow-income
tenantsatanotherqualifiedmultifamilypropertythatisownedbythesamenonprofit
housingorganizationandwithinthesameutilityjurisdiction.
DocumentationandVerificationofAllocation
Allocationsforsolarenergysystemsandupdatestosystemdesignandallocations
shouldbesubmittedtotheProgramAdministratoraspartoftheapplication,reservation,and
paymentprocess.Minimally,thedocumentationshouldprovide:
§ PVsystemsizeanddesigndetail(numberofmodules,inverters,annualkWh,etc.).
§ PVallocationsfortenantresidentialunitsandforcommonareas(annualkWhand
percentoftotal).
§ PVoffsetsfortenantresidentialunitsandforcommonareas(annualkWhandpercent
oftotal).
§ NumberofunitsatpropertyandnumberreceivingadirectPVallocation.
33
§ PVallocationsbyunittypeorsize(annualkWhandpercentofallocationbyunittype).
§ Otheroffsetsprovidedtotenantresidentialunitsandforcommonareasfromenergy
efficiencyandenergystoragesystems(annualkWhand/orannualkW).
§ Explanationofsiteconditionaffectingsolarenergysystemallocations.
§ Explanationiflessthan100%oftheunitsreceiveallocationsfromthesolarenergy
system.
TheProgramAdministratorshouldconductperiodicreviewstoverifythattheelectricity
generatedbyincentivizedsystemsisoffsettingelectricityusageoflow-incometenants.Thiscan
beaccomplishedaspartoftheenergybenchmarkingrequiredunderAB802,whichreflects
utilitydataprovidedbyutilitycompaniesontheenergyusageandsolarallocationsrecordedon
utilitymetersattheproperty.Werecommendthatthepropertyownercanberequiredto
providereportsfromenergybenchmarkingsystemstotheProgramAdministrationfora
prescribedperiodfollowingtheinstallationofasolarenergysystem.Shouldfurtheranalysisbe
required,theProgramAdministratorcouldrequestutilitydatafromtherespectiveutility
companiesorconductselectedsiteauditsofutilitybillingrecordstoverifycompliance.
34
VI.
TenantBenefits40
UndertheMultifamilySolarRoofsProgram,theeconomicbenefitsfromtheelectricity
allocatedtotenantsfromasolarenergysysteminstalledataqualifiedaffordablemultifamily
rentalpropertymustbeprovidedtotenantsresidingataqualifiedmultifamilypropertyasa
creditontheirutilitybills.41Inthisregard,AB693providesthat:
Thecommissionshallensurethatutilitybillreductionsareachievedthroughtariffsthat
allowfortheallocationofcredits,suchasvirtualnetmeteringtariffsdesignedfor
MultifamilyAffordableSolarHousingProgramparticipants,orothertariffsthatmaybe
adoptedbythecommissionpursuanttoSection2827.1.42
VirtualNetMetering
Multifamilyindividuallymeteredrenterhouseholdsareachallengingsegmentforsolar
PVadoptionduetotheproblemofdistributingthebenefitsofsystemoutputamong
individuallymeteredoccupants.Toaddressthisissue,theCPUCdirectedtheIOUstofiletariffs
forVirtualNetEnergyMetering(VNEM).43ThespecificintentofVNEMwastohelplow-income
residentsreceivedirectbenefitsfromasolarsysteminstalledatamultifamilyproperty.Based
onthemeritsofthesetariffs,theCPUCexpandedVNEMtoallmulti-tenant,multi-meter
propertiesin2011andincludedallNEM-eligibletechnologiesforeligibility.44TheCPUCreports
thatasoftheendof2015therewereover274(non-MASH)VNEMprojectsusingaVNEMtariff
withacombinedcapacityof8.1MW.45GiventhatVNEMisawell-establishedandsuccessful
mechanismfordistributingthebenefitsofsystemoutputamongindividuallymetered
occupants,werecommendthatVNEMtariffsbeusedfortheMultifamilySolarRoofsProgram
withmodificationstoaddressthefollowingissues:
§ EffectofNon-BypassableChargesandDesignofTOURateStructures–TheCPUCfinal
decisionintheNEM2.0proceedingrequiresthatNEMsuccessorcustomerspayfor
40
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(g)(1)states,“low-income
tenantswhoparticipateintheprogramshallreceivecreditsonutilitybillsfromtheprogram.”
42
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(g)(1).
43
D.08-10-036
44
CaliforniaSolarInitiativeAnnualProgramAssessment,June2016.CaliforniaPublicUtilities
Commission.
45
Ibid.
41
35
Non-BypassableCharges(NBC)onallenergyconsumedfromthegrid.NBCsareusedto
supportlow-incomeenergyservicesandprogram.WegenerallysupporttheuseofNBC
intheprogram,butrequeststhattheCommissionconsiderimpactsofNBCsinthe
designofTOUtariffsforlow-incometenants.NBC’swouldequatetoanaddedtwo
centsormoreperkWh.Foralow-incomehouseholdonCARE,NBCswouldadd15%to
20%toaCAREhousehold’sutilitybill.CoupledwitharequirementtoconverttoTOU
rates,andnewutilityratestructuresthatmovepeakperiodstoeveninghours,the
addedchargesandutilitycostswillsubstantiallydiminishthefinancialbenefitsofthe
program.Accordingly,werecommendthattheVNEMtariffsincorporateTOUrate
structuresthatdonotadverselyaffecttheeconomicbenefitsthatwouldotherwisebe
receivedbytenants.
§ TenantAggregationatQualifiedMultifamilySites–Thetariffratedesignforthe
MultifamilySolarRoofsprogramshouldalsorecognizethatmid-riseandhigh-rise
multifamilydwellingsarenotwellalignedwiththeobjectiveofscalingPVsystemsto
offsettenantelectricityloadsbecauseofroofspacelimitationsandothersite
conditions.Theseconditionsprimarilyaffectpropertieslocatedindensermoreurban
areasandnewinfilldevelopmentslocatedalongtransitcorridors,whicharesupported
byinvestmentsfromotherCapandTradeprograms.Toprovidesolaraccesstolowincometenantsinthesepropertiesatariffstructureisneededtopermitthegeneration
fromsolarenergysystemsataqualifiedmultifamilysitetobesharedwithlow-income
tenantsresidingatotherqualifiedmultifamilypropertiesthatareunabletoprovide
solartotenantsbecauseofsiteconstraints.
Werecommendthatnonprofitcontrolledaffordablemultifamilypropertyownerswith
multiplequalifiedpropertiesintheirinventoriesbepermitteduseAB693incentivesto
developsolarinstallationsatoneormorequalifiedmultifamilysitesthatarescaledto
servelow-incometenantsresidingatotherqualifiedmultifamilysitesownedbythe
samenonprofitcontrolledhousingorganizationandwithinthesameutilityterritory.
Underthisapproach,whichissimilartotariffsadoptedinMassachusetts46and
permissibleunderCalifornialaw47,thepropertyownerwouldprovidewrittennoticeto
46
SeeMassachusettsGreenCommunitiesAct.Canbeviewedat
https://malegislature.gov/Laws/SessionLaws/Acts/2008/Chapter169
47
AB693onlyrequiresthatthe“qualifyingsolarenergysystem”beinstalledoneligibleproperties,and
thatthosesystems“primarily…offsetelectricitybylow-incometenants[ofeligiblebuildings].”SeeCal.
Pub.Res.Code§2870(a)(3)&(4),(f)(1)&(2).Inturn,AB693defines“solarenergysystem”bythe
criteriainCal.Pub.Res.Codesection25782,whichrequiresinrelevantpart:(1)Thesolarenergysystem
isintendedprimarilytooffsetpartoralloftheconsumer’sownelectricitydemand;and(2)Thesolar
energysystemislocatedonthesamepremisesoftheend-useconsumerwheretheconsumer’sown
electricitydemandislocated.Cal.Pub.Res.Code§25782(2),(5)(emphasisadded).Thesesections
thereforeonlyrequirethatthebuildingowner’sownusage,thecommonareameter(s)connectedto
thesolarsystem,needtobepartiallyoffset.Thetenantswouldnothavetobeonsite,however,because
tenantswouldalwaysreceivebillcreditsviaVNEMonindividuallymeteredproperties.Inotherwords,
36
theProgramAdministratorandutilitiesoftheotherqualifiedmultifamilyproperties
thatwouldbeservedbythesystem,themeterinformationforthetenantsatthe
secondarysites,anddesignatetheamountsofthecreditsallocatedtosuchcustomers
similartowhatisrequiredunderVNEM.
§ TenantContributionsforSolarO&M–Totheextentthattheprogramincentivesand
energysavingsfromcommonareasarenotavailableorsufficienttocoverongoing
operationandmaintenance(O&M)costsforthesolarenergysysteminclusiveof
equipmentreplacement,amechanismisrequiredtofacilitatethecollectionof
contributionsfromtenantssothattheO&Mcostsofthesolarenergysystemcanbe
covered.
Accordingly,werecommendthatanO&MchargebeincorporateintheVNEMtariff,and
includedonmonthlyutilitybillsalongwiththesolaroffsetsandcreditsprovidedtothe
customer.ThechargeshouldreflectaperkWhestimatebasisofreasonableand
ordinaryO&McostsandbebilledonaperkWhbasisbasedonthenumberofkWh
offsetsallocatedtothetenant.TheallowableO&Mchargesshouldnotexceedtwo
centsperkWh48orexceed20%oftheoffsets,toensurethattenantsreceiveadirect
economicbenefit.
ifthebuildingownerisoffsettingpartofthecommonarealoadandthesystemislocatedontheeligible
buildingwherethisoffsetisoccurring,itmeetsthecriteriaof25782(2)and(5).Inaddition,AB693only
statesthatthesystemmustprimarilyoffsettenantload,butdoesnotspecifythatthosetenantsmust
liveinthesamebuildingwherethesystemissited.SeeCal.Pub.Res.Code§2870(f)(2).Moreover,AB
693permitsaVNEMtariff“suchasvirtualnetmeteringtariffsdesignedforMultifamilyAffordableSolar
HousingProgramparticipantsorothertariffsthatmaybeadoptedbythecommissionpursuantto
Section2827.1.”Cal.Pub.Res.Code§2870(g)(1).Accordingly,theVNEMtariffneednotbeidenticalto
theMASHVNEMtariff,whichlimitscreditstoonsitetenants,becausetheVNEMtariffcouldbe
developedinthe“disadvantagedcommunities”portionofAB327.Furthermore,althoughnotadopted
bytheCommissioninPhaseI,theJointSolarPartiesandtheEnergyDivisionStaffproposedvarying
versionsofexpandedVNEMthatwouldallowtheallocationofbillcreditstooffsitetenantswithinthe
sameIOUserviceterritoryandwiththesamecensustractinthesameIOUserviceterritory,
respectively.SeeAdministrativeLawJudge’sRulingAcceptingIntotheRecordEnergyDivisionStaff
PapersontheAB327SuccessorTarifforContract,Attachment2:EnergyDivisionStaffDisadvantaged
CommunitiesProposalforAB327,p.2-12(June4,2015);JointSolarPartiesProposal,p.v(Aug.3,2015).
Theseproposalsarestillunderconsiderationandassuch,theCommissionshouldnotforeclosethe
possibilitythatAB693couldincludeanexpandedVNEMtariffthatwouldallowoff-siteeligiblelowincometenantstoreceiveVNEMcreditsfromasystemlocatedonanotherbuildingownedbythesame
buildingowner.Thistariffwouldbesimilartonetenergymeteringaggregation,althoughtheproperties
wouldnotneedtobecontiguous.
48
CurrentO&Mchargesareestimatedat$0.02/kWh.ThecollectionofO&Mchargeswouldbeprovided
topropertyownerandretainedinareserveaccountforscheduledmaintenanceandequipment
replacement.
37
UtilityAllowances
ThereisconsiderableconfusionregardingutilityallowancesinthevariousAB693-
eligibleaffordablehousingprogramsandwhetherapplicableutilityallowancepoliciesand
guidelinescanoperatetoreduceoreliminateprescribedsolarbenefitstolow-incometenants.
Inaffordablehousing,thetotalamountofregulatedrentpaidbytenantsincludesbothhousing
costsandareasonableamountofutilities.Wherethetenantpaysutilitycostsdirectlytothe
utilityprovider,ownersmustprovideautilityallowancetocredittenantsforareasonable
estimateofthosecosts.Theutilityallowanceisnotequaltotheactualcostspaidbyeach
tenant.Theseallowancesvarybyunitsize,anddependontherulesapplicabletoeach
program.Utilityallowancesareupdatedperiodically,usuallyannually.Overtime,ifutility
allowancesareincreasedtoreflectincreasedutilitycosts,suchasrateincreases,theamountof
thetenantrentpaidtotheownerdecreasesbythesamedollaramount.Conversely,ifthe
utilityallowanceisdecreasedforanyreason,possiblyincludingreducedelectricitycostsfroma
solarinstallation,theamountofthetenant’srentpaymenttotheownermayincrease.
Whetherreducedelectricitycostsduetosolarmustorcouldtriggerchangesintheutility
allowancesataspecificaffordablepropertydependsonthetypeofutilityallowance
methodologybeingusedunderapplicableprogramrules,andwhetherthatmethodologycan
bechangedbytheowner.
FormostAB693-eligibleaffordablehousingproperties,utilityallowancesare
determinedineitheroftwoways,using:(1)“project-specific”methodologies,suchasactual
consumptionbillingdataorenergymodelingatthespecificproperty;or(2)aschedule,usually
providedbythelocalPublicHousingAuthority(PHA),whichisbaseduponcommunity-wide
datathatreflectsutilityconsumptionintheoverallhousingstock.Generally,propertiesthat
haverentalassistanceunderaHUDorRuralDevelopment(RD)program(e.g.,project-based
Section8orRDRentalAssistance)mustuseaproject-specificmethodology,usuallyactual
consumptiondata.ThiscategoryincludesthoseLow-IncomeHousingTaxCreditpropertiesthat
alsohaveHUDorRDRentalAssistance.MostaffordablepropertiessupportedbyLIHTCor
Project-BasedVouchersuseaPHAschedule,althoughasmallnumberofLIHTCproperties
38
developedsince2009haveelectedtoestablishaproject-specificallowanceusingaTCACapprovedenergyconsumptionmodel,theCaliforniaUtilityAllowanceCalculator(CUAC).
IntheMASHprogram,adjustingutilityallowanceswasseenaspartofthatprogram’s
financingstrategyforLIHTCproperties.Underthatprogram,becauseincentivelevelswerenot
sufficienttocoverthecostsofsolarinstallationsservinglow-incometenants,theMASH
programexplicitlypermittedpropertyownerstoadjust(lower)utilityallowancesthrougha
specialprocesscreatedbytheCaliforniaTaxCreditAllocationCommittee(TCAC)forrecipients
ofMASHfunding.ThisrestrictedprocessrequiresMASHprojectsseekingutilityallowance
adjustmentstoundergoananalysisusingtheCaliforniaUtilityAllowanceCalculator(CUAC)to
settheadjustmentlevel.Theadjustmentswouldincreasethetenant’srentpaymenttothe
propertyandtherebyincreasethecashflowtothepropertyownerstosupportimprovement
costs(orincreasetheproperty’sNetOperatingIncome).
Thisapproachprovedunsuccessfulforanumberofreasons,49andsincetheMASH
2.0programwaslaunchednearlyayearago,TCAChasprocessedrelativelyfewutility
allowancesadjustments.50Moreover,utilityallowanceadjustmentstoaccommodatesolarare
notpossibleforHUD-assistedorUSDARuralDevelopment(USDA-RD)propertiesunderthe
MASHprogram.Theseagencieshavenoclearpolicyonwhetherorhowallowancescanor
shouldbeadjustedtoaccountforMASH-requireddirecttenantbenefits,andonhowany
subsidysavingstotheagencyfromanyallowancereductionsthatmightoccurcanbeshared
withownerstocovergapsinfinancinginstallations.
UndertherequirementssetbyAB693,incontrasttoMASH2.0,allofthesolar
generationallocatedtotenantsisintendedtoprovidedirectoffsetsprovidingeconomic
benefitstothetenants.Further,underAB693,“thecommissionshallensurethatelectrical
corporationtariffstructuresaffectingthelow-incometenantsparticipatingintheprogram
49
Problemsencounteredincludedtheabsenceofproject-specificmethodologiescapableofproviding
sharedsavingstobothtenantsandowners(inthecaseofHUDproperties),inconsistentPublicHousing
Authorityutilityallowanceschedulesresultinginloweradjustmentsfromsolar,publicpoliciesrequiring
theuseofdifferentutilitytariffsincalculatingutilityallowancesresultingincostincreasestobaseline
utilitycostestimates,thecostandcomplexityofCUACadministration,andmodelinguncertainties.
50
AccordingtotheCaliforniaTaxCreditAllocationCommission,therearecurrentlyupto20projects
undertakingutilityallowancereviewsusingtheCUAC,andasofJune2016onlyoneexistingLIHTC
propertyinstallingaMASH2.0solarprojectreceivedapprovalforautilityallowanceadjustment.
39
continuetoprovideadirecteconomicbenefitfromthequalifyingsolarenergysystem.”51As
such,theCPUCshouldcarefullyevaluatetheeffectofutilityallowancepoliciestodetermine
whetherornotsuchpoliciesorpracticeswouldaffecttheactualeconomicbenefitsreceivedby
low-incometenanthouseholds.
OurpreliminaryassessmentisthatAB693’stenantbenefitrequirementwillnotbe
materiallyimpactedforthevastmajorityofqualifiedmultifamilyproperties:
§ LIHTCproperties–LIHTCpropertiescomprise70%oftheeligiblemultifamilyproperty
inventory.Fortheseproperties,ownerstypicallysetutilityallowancesusingPHAutility
allowanceschedules.BecausethePHAscheduleisbasedonacommunitystandard,thesolar
creditsreceivedbythetenanthouseholdwouldnotaffecttheamountoftheutilityallowance.Theother
methodavailabletoLIHTCpropertiesplacedinservicesince2009istheCaliforniaUtilityAllowance
Calculator(CUAC).Underthismethodthesolarproductionallocatedtotenantscanberemovedfromthe
calculation,sothattheresultingproject-specificallowanceisunaffectedbyPVoffsetsfortenantloads.
Additionally,forsolarinstallationsfundedunderAB693,hismethodwouldbeavailableonlyfornew
constructionprojects.ExistingLIHTCpropertiesparticipatingintheMultifamilySolarRoofsprogramare
notabletousetheCUACunderTCAC’scurrentpolicies.Insummary,forLIHTCpropertieswithout
HUDorRDrentalassistance,thebenefitsprovidedtolow-incometenantswillnotbe
adverselyaffectedbyfederalhousingpoliciesandthesebenefitsarecurrently
safeguardedfromrecapture.ToensurethatpropertyownersusingtheCUACdonot
inadvertentlytakesolarcreditsintendedforthesolebenefitofthetenants,the
Commissioncouldrequirethatsolarcreditsberemovedfromutilityallowance
calculations.
§ HUD-assistedproperties–HUD-assistedpropertiescompriseapproximately22%ofthe
eligibleinventory.ThoseHUD-assistedAB693-eligiblepropertiesmustuseaprojectspecificactualconsumptionmethodologytocalculateutilityallowancesunderHUD
MultifamilyNotice,H-2015-04.52Thismethodologycurrentlypresentsapotential
conflictwithAB693’stenantbenefitrequirements.UnderthisNotice,absentfurther
modification,tenantbenefitswillbeconsideredutilitycostreductionsdriving
commensuratereductionsinutilityallowancesandincreasesintenantrent
contributionstoowners.Byreducingsubsidypayments,andpreventingownersfrom
accessingthesavingsifneeded,HUDwillcapturealloftheAB693-requiredtenant
benefitsfromreducedelectricitybillsfromlow-incomerenters,ineffectmakingHUD
thebeneficiaryofthestate’sinvestmentandthisprogram’senergysavings.HUD’s
guidelineswereestablishedthroughaninformalinternalprocess(issuingaNotice),not
throughformalnotice-and-commentrulemaking.Thus,HUDapparentlyhas
considerablediscretioninsettingmethodologiesorotherguidelinesforcalculating
51
HUDNoticeH-2015-04,MethodologyforCompletingaMultifamilyHousingUtilityAnalysis,June22,
2015.
52
40
utilityallowancesforprivatelyownedHUD-assistedproperties.HUDcouldstillestablish
revisedguidelinestorequireownerstodisregardtheAB693solaroffsetorcredititback
totenantsintheirutilityallowancecalculations.HUDhasbeenadvisedofthispotential
conflict,andonApril6,2016CHPCprovidedHUDanissuepaperwithspecific
recommendationtolargelyprotecttenantbenefits.
Insummary,solutionswithinthediscretionofthefederalagencyexisttoresolvethis
conflictoverHUD’scaptureofintendedtenantbenefits.ShouldHUDprovide
informationtothecontrary,theCommissioncanconsiderwhethertoadjustthe
program’stenantbenefitrequirementstoaccommodateHUDproperties.Inthisregard,
itshouldbenotedthatnosuchaccommodationwasprovidedfortheMASH2program.
ShouldanaccommodationfortheMultifamilySolarRoofsProgrambeconsidered,since
HUDwouldbetheprimarybeneficiaryofthesolarinstallationsfundedbytheStateof
California,theCommissionshouldconsiderwhatleveloffinancialcontributionis
appropriatefromHUDorHUDpropertyownerstoreducethelevelofstateincentives
commensuratewiththereductioninbenefitsprovidedtoCaliforniarenters.
§ ActionsRequiredtoSafeguardTenantBenefitsfromUtilityAllowanceRecapture–To
ensurethatpublicallyregulatedutilityallowancepolicesdonotconflictwithAB693’s
tenantbenefitprovisions,werecommendtheCPUCandtheProgramAdministrator
takethefollowingsteps:
i. Requireownercertificationsthatautilityallowancereductionorincreasein
tenantrentpaymentwillnotbeundertakenasaresultoftheinstallationofthe
solarenergysystem.
ii. TheCommissionshouldeffectuatestatepolicybyadvocatingthatHUD,USDARDandotherstate,federal,andlocalagenciesnotcountthedirectedtenant
benefitsasincomeindeterminingthetenant'srentcontribution.
iii. TheProgramAdministratorshouldconductperiodicmonitoringandverification
ofhousingtypeswithknownutilityallowancepolicyconflictstoensurethat
utilityallowancesarenotreducedasaresultofthesolarenergysystemfunded
underAB693.
iv. EnsurethatifutilityallowancereductionsareallowedbytheCommissionasa
resultoftheinstallationofasolarenergysystemfundedunderAB693,thereisa
correspondingdecreaseinthelevelofincentivespaid.
41
DocumentationandVerificationofTenantBenefits
AB693requiresthat:
“Thecommissionshallensurethatelectricalcorporationtariffstructuresaffectingthe
low-incometenantsparticipatingintheprogramcontinuetoprovideadirecteconomic
benefitfromthequalifyingsolarenergysystem.”53
ToimplementtenantbenefitrequirementsfortheMultifamilySolarRoofsProgramwe
recommendthattheCommissionrequire:
§ AffidavitofCompliancewithTenantBenefitRequirements–Propertyownersmustcertify
thattheywillnotundertakeautilityallowancereductionorincreasetotenantrent
paymentsasaresultoftheinstallationofthesolarenergysystemduringtheten-year
periodfollowinginstallation.
§ ProgramAdministratorDueDiligence–TheProgramAdministratormustconduct
reasonableduediligencetodeterminethattenantswillreceiveandcontinuetoreceivea
directbenefitundertheprogram.Theduediligenceshouldincludeassessmentsof:
i. SolarPVoffsetprovidedtotenants
ii. Addedcostspaidbytenantsforadditionalchargesorfeesorutilityratechanges
resultingfromtheinstallationofasolarenergysystemattheproperty
iii. Neteconomicbenefitreceivedbythelow-incometenants
§ Transparency–Asbenefitrecipients,tenantsshouldbeallowedtoverifythatpromised
tenantbenefitsareactuallydelivered.Calculationsoftenantbenefitsandsupporting
documentsforthepropertyshouldbemadeavailabletotenantsortheirrepresentatives.
53
42
VII.
SolarFinancingandOwnershipStructures54
Ingeneral,affordablehousingpropertyownersandtenantspreferPVsystemownership
toThirdPartyOwner(TPO)transactions.Purchasingoptionsprovidelowerlong-termkWh
costsandgreaterfinancialbenefitstopropertyownersandtenants,evenwithfinancingcosts,
andposelessout-yearfinancialriskincomparisontoTPOagreementsthatmaycontaincost
escalatorstobolsterinvestorreturns.Howevertoaccomplishsystemownershipobjectives
propertyownersrequireeitherdeeperincentivesoroff-bookprojectfinancialtools,suchasonbillfinancing,tocovercosts.
TPOscanofferimportantoptionswherepropertyfinancingoroff-bookfinancing
optionsarenotavailabletocoversolarprojectcosts.Ownersofrentrestrictedaffordable
multifamilyhousingneedone-stopalternativesthatprovideaccesstofinancingwithnofrontendcosts.Largesolarcompanieswithfinancingandinvestmentfundscapableofdelivering
integratedsolarservicestypicallyprovidetheseoptions.Theseoptionsmaybelessavailablefor
smallersolarcompaniestoparticipateinthisprogram.
Anumberofaffordablehousingorganizationshavesoughttodeveloptheirown
investmententitiestoenableportfoliofinancingofsolarprojects,butthesestructuresare
complexandcostlytodevelop,andfurtherassistanceisneedtobringthismechanismsonline.
Ineithertypeoftransaction–propertypurchaseorTPO–affordablehousingownersseek
sufficientupfrontresourcestominimizethecostofthesolarinvestmenttotheproperty,
increasethevalueoftheinvestment,andminimizefinancialrisk.Becausethebenefitsfrom
resident-servingsolarenergysystemsmustberetainedbythelow-incomebeneficiariesofthe
program,propertyownersgenerallyrequirethatthecostofsolarenergysystemsserving
residentialunitseitherbefullyfundedfromincentivesandanyotherresourcethatcanbe
reasonablyleveraged.
Additionally,propertyownersareconcernedabouthowoperationsandmaintenance
(O&M)costsforthesolarsystemswillbecovered.AssumingthatO&Mcostsare$0.02/kWh,
O&Mcostsfora150kWPVsystemcouldaverageover$5,000peryear.Withoutasourceto
coverthiscost,addedO&Mcostsputafinancialburdenontheproperty;therebydiscouraging
54
Questions11,15,and16oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
43
installationor,ifnotanticipatedinthefinancialanalysis,placesthepropertyatrisk.Fundingfor
O&McostsmustbeaddressedinorderforAB693implementationtobesuccessful.
OwnershipPathways
Themostdirectwayforpropertyownerstoownsolarenergysystemsiswherethe
propertyownerisleveragingLowIncomeHousingTaxCreditsandfederalinvestmenttax
creditsaspartofnewconstructionorprojectrefinancingandrecapitalization.LIHTC-financed
newconstructionandrehabilitationprojectsinparticularprovideopportunitiestoleverage
resourcesinconjunctionwiththeMultifamilySolarRoofsProgramtoinstallofsolarenergy
systems.In2015alone,theTCACawardedLIHTCsworthwellover$2.5billionto221new
affordablehousingpropertiesandover18,000low-incomeresidentialunits.Bytargeting
projectsreceivingLIHTCfunding,theMultifamilySolarRoofsprogramcouldloweraverage
incentivepaymentsandoptimizethereachoftheprogram.InordertotargetLIHTCproperties
andleveragethisfinancingeffectively,however,incentivereservationperiodsforthe
MultifamilySolarRoofsProgramwillneedto18to36monthstomatchthelongerdevelopment
periodsassociatedwiththeselargerconstructionprojects.
Additionally,theLIHTCprogramencouragestheadoptionofabove-codeenergybuilding
standardsfornewconstruction,55andrehabilitationprojectsincludeenergyefficiency
investmentstoimproveenergyefficiencybyatleast15%.56Hence,propertieswithLIHTC
fundingwillautomaticallyautomaticallymeettheenergyefficiencyrequirementsadoptedin
AB693.
ThirdPartyOwnershipIssuesandRestrictions
ThereareanumberofissuesuniquetoTPOstructuresthatshouldbeaddressesinthe
AB693programdesignshouldaddressincluding:
§ TPOMWandFundingLimitationUndertheMultifamilySolarRoofsProgram–TheALJ
askedspecificquestiononwhetherprogramshouldplacelimitsontheamountof
55
In2015,58ofthe63LIHTCfundednewconstructionprojectsawarded9%TaxCreditsachievedLEED
GoldorSilverstandards,
56
In2015,all27LIHTCfindingrehabilitationprojectsreceiving9%TaxCreditincreasesenergyefficiency
by20%irmoreand30%oftheprojectsincludedaddedsustainabilitymeasuressuchassolarPV.
44
incentivepaymentsthatcanbepaidtoprojectsdevelopedbyanyonethird-partyowner,
orwhethertheprogramshouldincludealimitonthenumberofMWsforprojects
developedbyanyonethird-partyowner,supplier,orinstaller.
UndertheMASH2.0program,somesolarprovidershavesoughttomonopolizethe
affordablehousingmarketthroughMASH’sreservationsystem.Thishasresultedinmore
limitedcontractorparticipationandhaslockedoutsomeaffordablehousingproperties
wishingtoparticipateintheprogram.Accordingly,werecommendthattheProgram
AdministratorphasetheSolarRoofsapplicationandreservationprocessduringayearand
limitthenumberofprojectreservationsthatasolarcontractororsupplierortheir
affiliatescanencumberduringtheseperiods,tobuildamorediverseandviablesolar
marketforaffordablehousing.
Toaddressthisproblemthefollowingcorrectiveactionsarenecessary:
i. Discontinuethepracticeofallowingsolarcompaniestoenrollmultipleproperties
forapropertyowneratonetime.
ii. Requirethatmultifamilypropertyownersmakeprojectapplications.
iii. Establishprocesstophaseapplicationapprovalsonaquarterlybasis
iv. Setalimitonprojectreservationsthatahousingapplicantcanreceiveduringa
quarter.
v. Providepropertyownerswithconditional(60day)reservationstopermithousing
organizationstoobtaincompetitivebidsfrommultiplesolarcontractorsbefore
lockinginreservations.
§ TPOPricing–WhereaTPOagreementisproposed,andasignificantportionofthe
project’scostarecoveredbyincentivesandotherfinancialcontributionsfromthe
property,theTPOagreementshouldbestructuredaspre-paidagreementtoensurethat
thepropertyownerandthelow-incometenantsreceivecreditfortheseAB693
investments.Additionally,werecommendthattheProgramAdministratormonitorper
kWhchargessetbysolarprovidersunderTPOagreementstoensurethattheperkWh
changesarealignedwiththeamountofprojectcostsfinancedandreasonablefinancing
charges.Moreover,becauseescalatorsinTPOagreementscanadverselyaffectout-year
financialreturnsforthepropertyowners,werecommendthatcostescalatorsbe
prohibitedundertheprogram.
§ TPOFinancialProjections–ThevalueofaTPOtransactionisdeterminedonthebasisof
theprojectedcashflowtothepropertyowner.However,therelianceoncashflow
projectionscanincreasetherisktopropertyowners,sincethethirdpartysolarowners
makingthecashflowprojectionmaybemotivatedtopresentmoreoptimisticfinancial
forecaststhanactuallysupportedtogainbusinessbyoverstatingsavingsestimates.This
canoccurinanumberofways:
i. Notprojectingallorthecostsrequiredbytheagreementorincludingordisclosing
thecostsofrateescalatorsovertheagreementperiod.
45
ii. NotproperlycorrelatingsolarproductionwithTOUratestructures.
iii. Notfullyaccountingforutilitydemandcharges,utilityfeesortariffsratechanges.
iv. Includingsavingsfromenergyefficiencyinfinancialforecasts.
Affordablehousingownersservinglow-incomehouseholdsundergovernmentimposed
rentrestrictionsarebothattractedbyrobustprojectionsoffuturesavingsandillequipped
tocovergapsiffinancialprojectionsarenotachieved.Forthesereasons,westrongly
recommendrequiringrobustinformationdisclosuresregardingprojectionsaboutfinancial
benefitsandcoststoprotectthisvulnerablemarketsegment.
§ TPOProductionGuarantees–AB693requiresthatqualifyingsolarenergysystemsowned
bythird-partyownersbesubjecttocontractualrestrictionstoensurethatnoadditional
costsforthesystembepassedontolow-incometenantsandthatthird-partyownersof
solarenergysystemsprovideongoingoperationsandmaintenanceofthesystem,monitor
energyproduction,andtakeappropriateactiontoensurethatthekWhproductionlevels
projectedforthesystemareachievedthroughouttheperiodofthethird-party
agreement.57
Thereareanumberofpracticesthathavebeenusedbyenergyservicecontracting
companies(ESCO)andsolarPVcompaniestoguaranteeperformanceincludingproviding
specificannualguaranteesofkWhproductionsothatpropertyownersarecompensated
fortheamountofunderproduction,orenergyperformanceinsurance,inwhichan
insurancecompanyguaranteesperformancelevels.TheProgramAdministratorshould
consultwiththesolarindustryandotherenergyprofessionstodeterminethebestoptions
forensuringthatsolarenergysystemsincentivizedbypaymentsfromtheSolarRoofs
ProgramprovidetheproductionlevelsoutcomesrepresentedbytheTPO.
57
46
VIII. IncentiveStructure58
TheincentivestructuremandatedbyAB693isfundamentallydifferentfromthe
traditionalapproachesutilizedfortheMASHandSASHprogramswhereprogramfundingand
capacitytargetsstronglyinfluencedtheunderlyingincentivestructure.59Specifically,AB693
statesthatindevelopinganincentivestructureforMultifamilySolarRoofsprogram:
“Thecommissionshallensurethatincentivelevelsforphotovoltaicinstallations
receivingincentivesthroughtheprogramarealignedwiththeinstallationcostsforsolar
energysystemsinaffordablehousingmarketsandtakeaccountoffederalinvestment
taxcreditsandcontributionsfromothersourcestotheextentfeasible.”60
Thiscost-basedapproachisnecessarytoensurethattheprogramhasthecapabilitytoaddress
financialbarrierssothat“solarenergysystems[are]moreaccessibletolow-incomeand
disadvantagedcommunities,”61andthatlow-incomerentersareprovided“adirecteconomic
benefitfromthequalifyingsolarenergysystem.”62
MWGoalShouldNotAffectIncentiveLevel
AB693’sgoalto“installqualifyingsolarenergysystemsthathaveageneratingcapacity
equivalenttoatleast300megawatts”63isreachableundertheproposedprogramdesignbut
mustbetemperedbythepracticalconsiderationsregardinghowthegoalwassetandhowthe
programisfunded.The300MWgoalsetbyAB693assumedfullprogrammaticfundingof$100
millionannuallyforaperiodof10years.However,theleveloffundingfortheMultifamilySolar
RoofsprogramiscontingentonthelevelofrevenuesreceivedfromtheCapandTradeauctions
ofGHGallowancesallocatedtoelectricalcorporationspursuanttosubdivision(b)ofSection
95890ofTitle17oftheCaliforniaCodeofRegulations.Becauseofthegeneraluncertainty
aboutactualprogramfundingovertheperiodcoveredbytheprogram,theMultifamilySolar
RoofsProgramshouldnotadoptaMWcapacitygoaloraninterimMWcapacitygoalthatmight
58
Questions7,15,16and23oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
D.15-01-027,January9,2015
60
61
AB693.Section1(e).
62
63
AB693.Section1(f).
59
47
adverselyaffectincentivelevelsnecessarytoinstallsolarenergysystemstoreachlow-income
rentersatqualifiedmultifamilyproperties.
DesignofIncentiveStructuretoMeetAB693Objectives
TomeettheobjectivesofAB693andaddressthefinancialbarriersassociationwith
solarPVinstallationsservinglow-incomerentalunits,werecommendthattheincentive
structureincorporatethefollowingprinciples:
§ SolarCostIndexing–Indexsolarcostsformultifamilysolarenergysystemsandreduce
systemcostsbytheannualpercentreductioninsolarinstallationcostsor7%peryear
overtheprogramperiodpursuanttoSB1,64whicheverisless.
§ TieredIncentiveStructure–Providedifferentincentivelevelsforcommonareasand
tenantunitsandadjustincentivelevelstoreflecteconomiesofscale.65
§ SystemOwnership–Promoteincentiveoptionsthatenablepropertyownershipofthe
solarenergysystems.
§ TenantSystems:Coverupto100%ofthecostsforportionsofthesystemproviding
generationandeconomicbenefitstotenantsadjustedforothersourcesfundingthe
solarenergysystems.
§ CommonAreaSystems:Coverupto70%ofthecostsofcommonareainstallations
adjustedforothersourcesfundingthesolarenergysystems.
§ ContributingSources–Providedifferentincentivelevelsthatreflectcontributionsfrom
theFederalITC,LIHTCprogram,andothersourcesoffsettingthecostsofsolarenergy
systems.Toreflecttransactioncostsanduncertaintyintaxcreditcalculationshouldbe
cappedat$0.80/percredit.
§ PropertyContributions–Requireaminimumpropertycontributionthatislimitedto
80%oftheestimatedenergysavingsfromcommonareainstallations.Contributioncan
besatisfiedonthebasisofpaymentsmadetowardtowardsO&Mcostsandrent
paymentsunderTPOagreements.
§ Pre-PaidAgreements–ForsolarenergyprojectsfinancedbyTPOstructures,require
pre-paidagreementsif90%ormoretheindexedsolarcostsofthesolarenergysystem
arecoveredfromincentives,taxcreditsandothertaxbenefits.
64
PublicUtilitiesCode,SEC.5.Section387.5(b).
TheeconomiesofscalecostadjustmentsshowninTable8bemodifiedconsistentwiththegeneral
findingsintheLBNLTrackingtheSunVIIIreport.
65
48
§ StorageDevices–Incentivestructureforenergysolarsystemsshouldbeconsistentwith
incentiveprovidedundertheSGIPandcappedbasedon75%ofthePVgenerationsand
othersystemdesignconsiderationsdiscussedinSectionXI.
AlignmentofIncentiveswithSolarCosts
Therequirementsthattheprogram’sincentivesbealignedwithcostsandtakeaccount
offederalinvestmenttaxcreditsandcontributionsfromothersourcesstronglysuggestthatthe
incentivestructurebebasedonindexesofsolarcostsandfundingsourcesavailabletosupport
solarinstallations.66
Thisrequiredalignmentofincentivestosolarcostsandotherfundingsourcesisa
significantchangeandenhancementtowhatoccurredundertheMASHprogram.TheMASH
programevaluationreportedthat:
DespitedeclininginstalledsystemcosttrendsintheU.S.PVmarket,MASHsystem
installationcostsdidnotdecreaseovertime.Forcomparison,SASHsysteminstalledcosts
decreasedeveryyearfrom2011–2013.67
Inthisregard,theLawrenceBerkeleyLaboratory’sstudy,TrackingtheSun,providesome
insightsonwhysolarcostsincertainresidentialmarketshavenotdeclinedatthesamerateas
othermarkets.Thereportfoundthat“stateswithhigherincentivesand/orhigherelectricity
ratesmayhavehigherinstalledpricesasaresultofvalue-basedpricing.”68,69Thispracticeis
veryprevalentinsolartransactionsfinancedthroughThirdPartyOwnership(TPO)structures,
suchasPowerPurchaseAgreements(PPA),inclusiveofthemajorityofsolarinstallationunder
66
NavigantConsulting,CaliforniaSolarInitiative—BiennialEvaluationStudiesfortheSingle‐Family
AffordableSolarHomes(SASH)andMultifamilyAffordableSolarHousing(MASH)Low‐Income
ProgramsImpactandCost‐BenefitAnalysisProgramYears2011‒2013,December1,2015.California
PublicUtilitiesCommission.
68
GalenBarbose,SamanthaWeaver,NaïmDarghouth,TrackingtheSunVII:AnHistoricalSummaryof
theInstalledPriceofPhotovoltaicsintheUnitedStatesfrom1998to2013,LawrenceBerkeleyNational
Laboratory,September2014.http://eetd.lbl.gov/sites/all/files/tracking_the_sun_vii_report.pdf
69
Value-basedpricingreferstoapracticeusedbysolarcompaniestoprovidePVserviceagreements
basedonthevalueofthesolartothecustomer,ratherthanbasedontheactualcostsofthesolar
system(hardcosts,installationcosts,anddevelopmentfees).Thepresumptionbysolarcompanies
usingthispracticeisthatifthecashflowbenefitsarelargeenough,apropertywilllookpasttheactual
installationscostsandaddedprojectcostspaidovertheperiodoftheagreement.
67
49
theMASHprogram.Theabsenceofcostreductionsandcostcontrolsforthisprogramshould
raiseconcernsthatthefullbenefitsofthereductionsinsolarcostswerenotreceivedbythe
tenants,propertyowners,orratepayersandinsteadmayhavebeendirectedelsewhere.Given
theexperiencewiththeMASHprogram,safeguardsareneededtoensurethattheintended
beneficiariesoftheprogramandratepayersreceivethebenefitsthatwouldresultfromcost
reductions.
DevelopandUseaSolarPVCostIndex
TomeettherequirementinAB693thatincentivesbealignedwithsolarcosts,we
recommendthattheCommissionorProgramAdministratorfortheMultifamilySolarRoofs
ProgramdevelopaSolarCostIndex.Thesolarindexshouldbedevelopedinconsultationwith
LawrenceBerkeleyNationalLaboratory(LBNL)andtheNationalRenewableEnergyLaboratory
(NREL)toensurethatanobjectivecostbaselineissetfortheprogram.70
AsastartingpointforestimatingsolarcostsinCalifornia’sresidentialmarkets,arecent
reportpublishedbyNREL71providesausefulbenchmarkofinstalledpricesofU.S.solar
photovoltaic(PV)systemsbuiltinthefirstquarterof2015(Q12015).Thisreportisthefirstin
anintendedseriesofannualbenchmarkingreportscoveringresidentialandcommercialsolar
PVinstallations.Theanalysisusedabottom-upmethodologytocapturevariationsinsystem
costandpricedrivenbyanumberoffactors.Thisapproachenablesbenchmarkingofsystem
costsindependentfromprice,whichasNRELpointsout“iscriticalinunderstandingindustry
progressinreducingcostsovertime.”Thesegment-specificmodelsandinputsusedbyNRELto
benchmarkPVcostswerereviewedandvalidatedbyindustryandsubjectmatterexpertsvia
70
LBNLhasconsiderableexpertiseonperformingsolarcostsanalysis.TheLBNLTrackingtheSun
reports,developedwiththeDepartmentofEnergy,isarecognizedreferenceofsolarcosttrendsfor
grid-connectedsolarphotovoltaicsystems.The2015reportincludesdatapointsfromover400,000
individualPVsystemsor81%ofallU.S.PVcapacityinstalledthrough2014.
71
DonaldChung,CarolynDavidson,RanFu,KristenArdani,andRobertMargolis,U.S.PhotovoltaicPrices
andCostBreakdowns:Q12015BenchmarksforResidential,Commercial,andUtility-ScaleSystems,
September2015.NationalRenewableEnergyLaboratory.TechnicalReportNRE/TP-6A20-64746.
GTMResearch,SEIAUSSolarMarketInsightReport.See:
http://www.greentechmedia.com/research/subscription/u.s.-solar-market-insight
50
interviewsaswellasreviewofdraftresults.Thefindingsoftheanalysisbenchmarked
residentialsolarPVcostsat$3.09/watt.Abreakdownofthesecostsinshownbelow.
Table 1 lists all key system and company assumptions. Details of our residential modeling
assumptions are included in Section 3.3.
NRELModeledResidentialRooftopPVSystemCost
$3.50
$3.21
$3.09
$2.99
$0.38
$3.00
$0.38
$0.38
$0.38
System Price (2015$/Wdc)
$2.50
$0.32
$0.27
$2.00
$1.50
$1.00
Profit
Overhead
Customer acquisition
$0.31
$0.42
$0.36
$0.11
$0.11
$0.11
$0.33
$0.33
$0.33
Installation labor
$0.08
$0.20
$0.08
$0.20
$0.08
$0.20
Sales tax on equipment
$0.20
$0.12
$0.20
$0.12
$0.20
$0.12
Supply chain cost
$0.29
$0.29
$0.29
Permitting fee and labor
BOS materials
Racking
$0.50
$0.70
$0.70
$0.70
Inverter
Module
$0.00
Installer
Integrator
Weighted average
Figure 4. NREL modeledSource:NRELSeptember2015
residential rooftop PV system prices (nationwide average, 5.2 kW)
Table 1. Key Residential Modeling Assumptions
TheNRELreportalsoaccountedforregionalvariationsinsolarcostsforstatesincluding
Modeled Value
Description
Sources
Category
Californiaandfurtheranalyzedtheeconomiesofscalegainedaspartofcommercial
(Range)
BNEF 2014, GTM
$0.70
installationsforPVsystemsof200kWormore,whichisatypicalsystemsizeunderthe
Module
Ex-factory gate (first buyer) average
Research and SEIA
($/Wdc)
($0.64–$0.74)
selling price; Tier 1 modules
(2015), industry
Inverter
($/Wdc)
$0.29
($0.23–$0.34)
Ex-factory gate prices; single-phase string
inverter
Racking
($/Wdc)
$0.12 ($0.09–$0.14)
GTM Research and
SEIA (2015), industry
interviews
Ex-factory gate prices; includes flashing
for roof penetrations
Industry interviews
$0.20
Wholesale prices for conductors, switches,
combiners and/or transition boxes,
conduit, grounding equipment, monitoring
system/production meter, fuses, and
breakers
Industry interviews,
RSMeans (2013)
interviews
MultifamilyResidentialRoofsprogram.Aspectsofthisanalysisarehighlightedbelow.
BOS
materials
($/Wdc)
7
This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.
51
average business costs. With the exception of Arizona, which has a lower business cost, the
business cost of the most active solar markets is 9%–23% higher than the U.S. average. 4
While margins are difficult to generalize, we assume a percentage markup on installer costs
(derived
from industry interviews) to arrive at an estimate of installer profit. In reality, marketspecific attributes that are intensely local in nature (e.g., retail electricity rates, incentives
available, intensity of competition) will determine the pricing and profit achievable in any given
RegionalVariablesinResidentialPVSystemCost
local market.
System Price (2015$/Wdc)
$3.50
$3.00
$2.50
$3.09
$0.38
$0.32
$3.19
$3.16
$3.00
$0.39
$0.38
$0.37
$0.34
$3.30
$3.28
$0.39
$0.38
$0.39
$0.39
Profit
Overhead
$0.35
$0.31
The net result of these changes
is a total
development cost
firm that sells 10
$0.43of $0.47/W
$0.43 for aCustomer
$0.37
$0.38
$0.36
$0.35
Acquisition
MW of projects
in
aggregate
to$0.11
our Q4 2013
$0.11per year. This compares
$0.11 estimate of $0.77/W in
$2.00
$0.11
$0.11
$0.11
$0.39
total development$0.33
cost and$0.37
profit, which
includes
$0.53/W
in
development
costs plus
Permitting
Fee $0.24/W of
$0.40
$0.37
$0.26
and Labor
$0.09
$0.08
$0.05
$0.05
$1.50
profit, for
a firm $0.08
pursuing a$0.10
mix of residential
and commercial
projects
totaling
70 MW annually.
Installation
If we adjust our previous methodology to exclude profit, our new development
cost result is
$1.00
$0.06/W lower than the earlier estimate. Further, if we apply our old profit Labor
estimation
$1.52
$1.52
$1.52
$1.52
$1.52
$1.52
Tax on
methodology
to our latest benchmark (10% markup on EPC price and directSales
developer
costs),
$0.50
Equipment
our development cost and profit would total $0.69/W, or $0.08/W less than our previous
Hardware
benchmark.
$0.00
U.S. Average
CA
AZ
NY
MA
HI
4.2.3 Regional Variations in Price
Source:NRELSeptember2015
Figure 5. Regional variations in residential-scale PV system price (5.2-kW system)
Our benchmark represents a national capacity-weighted average across various cost categories,
but we also model state-specific prices for the top five commercial markets to present the
RegionalVariablesinCommercialPVSystemCost
potential price variability by region (Figure 14).
$2.50
$2.25
$2.26
Development Costs
Contingency
$2.00
Sales Tax
EPC Overhead & Profit
Permitting and Interconnection
4
$1.50
Moody’s Cost
of Doing Business Index (Case 2012) evaluates labor rates, rent, electricity costs, and all taxes
Design costs.
relative to a national average, with each component weighted to reflect its contributionEngineering
to overall business
Equipment Rental and Freight
$1.00
Installation Labor
9
BOS
This report is available at no cost from the National Renewable Energy Laboratory (NREL)
atMaterials
www.nrel.gov/publications.
Racking
$0.50
Inverter
PV module
$U.S. Avg.
CA
MA
NJ
AZ
NY
$2.14
$2.01
$2.09
Cost per Watt
$2.15
Figure 14. Regional variations
in commercial-scale PV system price
Source:NRELSeptember2015
Racking,
labor, and differences in sales tax rates drive the majority of variation across these
Recognizingthatsolarinstallationsconstituteahybridofthecostdriversforresidentialand
states. Racking costs vary due to differing environmental conditions and resulting design
requirements.
The Northeast tends to incur higher racking costs owing to generally heavier snow
commercialinstallation,wecompletedareviewofNREL’sreportfindingsandLBNL’sTracking
loads in combination with equivalent or higher wind loads compared to other regions. Labor in
Massachusetts
and New Jersey also contribute to higher costs in those states.
theSunreportstodevelopanestimateofsolarcostsformultifamilyrentalproperties.Basedon
thisanalysisweproposeusingabenchmarkedPVsystemscostsof$3.20/wattforthepurposes
Because
margins are difficult to generalize, we assume a price that covers total developer cost
and EPC price. In reality, market-specific attributes that are intensely local in nature (e.g., retail
electricity rates, incentives available, intensity of competition) will determine the pricing
achievable in any given regional market.
52
ofmodelingincentivelevelsinthisproposal.Findingsfromthisanalysisaresummarizedinthe
tableatAppendixD.
FundingSourceIndex
Inadditiontoaligningincentivelevelswithsolarcosts,AB693alsorequiresthat:
TheCommissionshallensurethatincentivelevelsforphotovoltaicinstallationsreceiving
incentivesthroughtheprogram…accountoffederalinvestmenttaxcreditsand
contributionsfromothersourcestotheextentfeasible.72
Inthisregard,theLowIncomeWeatherizationProgram(LIWP)LargeMultifamilyprogram73has
developedanincentivestructurethatattemptstoaccountforcontributionsfromfederalITCs
andtheLIHTCprogram.ThissolarincentivestructureforthisprogramisshownintheinTables
7and8maybeausefulmodeltoemulateintheMultifamilySolarRoofProgram.Theincentive
structureshownbelowassumeda$3.50/wattcostforinstalledPVinstallations.
Table7–LIWPLargeMultifamily
AffordableMultifamilyHousingSolarIncentives(SystemsLessThan100kW)
FundingSourcesforPV
LIWPIncentives($/watt)
Property
Tenant
FederalITC
LIHTC
MASH
Metered
Metered
Systems
Systems
$0.50
$1.50
Yes
Yes
No
Yes
No
No
$1.00
$2.40
Yes
No
Yes
0
$1.00
No
No
No
$1.50
$3.50
No
No
Yes
$0.80
$1.70
72
ProgramGuidelinesfortheLargeMultifamilyLIWPprogramareavailableat:
http://www.csd.ca.gov/Portals/0/Documents/LIWP/LIWP%20LMF%20Final%20Program%20Guidelines%
20111015%20FINAL.pdfandathttp://aea.us.org/efficiency-programs/low-income-weatherizationprogram-large-multi-family-ca.html.
73
53
Table8–LIWPLargeMultifamily
IncentivesAdjustmentsforPVSystems
(SystemsOver100kW)
IncentiveAdjustment
kW--DC
Factor
≤100
100%
101--300
80%
301--500
60%
≥501
40%
ThisstructureaddressesAB693’srequirementthattheincentivestructurebealigned
withthecostsofsolarPVinstallationsonmultifamilypropertiesandtakeaccountofother
contributingresources,suchasFederalInvestmentTaxCredits,thatareavailabletoreduce
projectcosts.Accordingly,werecommendthatasimilarapproachbeusedtocreatethe
incentivestructurefortheMultifamilySolarRoofsProgram,inclusiveofmodificationsto
addressAB693’sprogramobjectives.
ProposedIncentiveStructureforAB693
TheNon-ProfitSolarCoalitionrecommendsthattheCommissionadopttheincentive
structureproposedinthetablesbelow.Theproposalaccountsforassumptionsaboutproject
costandfundingresourcesthatmaybeavailabletoreduceincentiverequirements.Backup
analysisfortheproposedincentivelevelsisprovidedinAppendixE.
54
§ SolarPVIncentivesforExistingMultifamilyPropertiesWithoutLIHTCFinancingforSolar
Installation
Table9–AB693PROPOSEDINCENITVES
ExistingMultifamilyPropertiesWithoutLIHTCFinancing
Incentivesfor
PVInstalledfor
TenantUnits
($/DCWatt)
Incentivesfor
PVInstalledfor
CommonArea
($/DCWatt)
PropertyOwned
(Purchasedor
Financed)Systems
$3.20
$2.20
ThirdPartyOwned
System
$2.24
$1.60
EnergyStorage
Requirements
Notes
Propertyownedsystemsreflect
propertyfinancialcontributionfor
commonareainstallations,
financingcosts,andsystemO&M
costs,whichisover25%ofoverall
costs.
TPOsystemcostscoveredby
propertyownerforeither
commonareaandtenantunits.
Propertyownerpayaddedcosts
underPPAcommensuratewith
lowerincentives.
EnergyStoragecapacitycappedat
75%ofPVgeneration.
Devices>10kW:$0.50/watthour
Devices<10kW:$0.60/watthour
§ PVsystembenefitstenants.
§ PVsystemdesignincludesenergyefficiencyreductionestimates.
§ AllsystemsinstallationsincludeO&Mserviceprovidedbythe
propertyownerorthird-partyownerofsolarsystem.
§ Solarcontractorsinstallingsolarsystemsmustincludeorother
warranteeofsystemproductionfor10-yearsperformance
guaranteeorotherrequirements.
§ PerkWhchargesunderPPAagreementshouldnotexceedthe
estimatedenergycostsavingsfromPVsystemsservingcommon
areas.
§ Contractorlocalhiringandpropertyenergyefficiency
requirementsaddressseparatelyinproposal.
§ Affidavitbypropertyownerattestingthatpropertywillby
subjecttoaffordabilityforatleast10yearsandthattenant
benefitswillnotberecapturedbyincreasesinrentpayments.
55
§ SolarPVIncentivesforMultifamilyPropertiesWith4%LIHTCFundingforSolar
Installations
ExistingMultifamilyPropertiesWith4%LIHTCFinancing
Incentivesfor
Incentivesfor
PVInstalledfor PVInstalledfor
Notes
TenantUnits
CommonArea
($/DCWatt)
($/DCWatt)
Propertyownedsystemsreflect
propertyfinancialcontributionfor
PropertyOwned
commonareainstallations,
(Purchasedor
$1.92
$1.28
financingcosts,andsystemO&M
Financed)Systems
costs,whichisapproximately30%
ofoverallcosts.
ThirdPartyOwned
Systems
EnergyStorage
Requirements
$0
$0
Notcosteffective.
75%ofPVgeneration.
propertyownerorTPOofthePVsystem.
§ Solarcontractorsinstallingsolarsystemsmustwarrantyor
guaranteePVproductionforatleast10-years.
§ LIHTCTaxCreditcontributionsforsolarprojectcappedat
$0.80/pertaxcredittoallowfortransactioncostsand
fluctuationsinpricingovertime.
56
§ SolarPVIncentivesforMultifamilyPropertiesWith9%LIHTCFundingforSolar
Installations
ExistingMultifamilyPropertiesWith9%LIHTCFinancing
Incentivesfor
Incentivesfor
PVInstalledfor PVInstalledfor
Notes
TenantUnits
CommonArea
($/DCWatt)
($/DCWatt)
PropertyOwned
(Purchasedor
Financed)Systems
$0.25
$0.25
ThirdPartyOwned
System
Installations
$0
$0
EnergyStorage
Requirements
Notcosteffective
75%ofPVgeneration
propertyownerorTPOofthePVsystem.
§ Solarcontractorsinstallingsolarsystemsmustwarrantyor
guaranteePVproductionforatleast10-years.
§ LIHTCTaxCreditcontributionsforsolarprojectcappedat
$0.80/pertaxcredittoallowfortransactioncostsand
fluctuationsinpricingovertime.
Over90%ofsystemscostspaid
forbytheproperty.
57
§ SolarAdjustmentFactors
Wefurtherproposethattheincentivelevelsproposedinthetablesabovebeadjusted
basedthefollowingfactorslistedbelow.
SolarIncentiveLevelAdjustmentFactors
AnnualSolarCostAdjustment
Recommendation
AdjustmentIncentiveAmount
-Systemslesthan200kW
Incrementalreductionstoproposed
solarPVincentivelevelsreflectlabor
andothercostreductionsdueto
economiesofscalesavings
documentedinNRELreport.
Nochangesinincentivelevel.
-SystemsOver200kWbutlessthan300kW
85%ofrecommendedincentive
-Systemsover300kWbutlessthan400kW
75%ofrecommendedincentivelevel.
-Systemsover400kW
70%ofrecommendedincentivelevel.
§ Makeincrementaladjustmentto
incentivelevelstoreflectproject
economiesofscale
Recommendation
AdjustmentIncentiveAmount
§ Makeannualadjustmenttoincentive
levelstoreflectsolarcostreductions
74
PublicUtilitiesCode,SEC.5.Section387.5(b).
PursuanttoSection387.5ofthe
PublicUtilitiesCode,solarincentive
amountshoulddecreasebythe
percentdeclineinresidentialsolar
costsasreportedbyLBNL,orby7%
asrequiredinSB1.74
58
IncludingEnergyEfficiencyandStorageDevicesUnderAB693WillHelpMeetorExceedthe300
MegawattSolarGoal
Todeterminewhethertheproposedincentivelevelsforsolarenergysystemsisaligned
withthegoalofinstalling“solarenergysystemsthathaveageneratingcapacityequivalenttoat
least300megawatts,”75weundertookananalysisoftheproposedincentivestructure.Inthis
analysisweconsideredwhetherpotentialinvestmentsinenergystorageandenergyefficiency
couldalsobemadealongwiththeinvestmentsinsolarPVandstillmeetthe300MWtargetfor
theprogram.76
Theanalysisshowsthatthe300MWgoalcanbereached,orbesurpassed,underthe
proposedincentivestructureandthatinvestmentsinbothenergyefficiencyandstorageto
solarPVcouldbeincludedwiththeinstallationofsolarPVaspartoftheintegratedenergy
strategydescribedinthisproposal,andreachthe300megawatttarget.
§ Assumptions:Intheanalysisweassumedthat10%offundingallocatedfortheMultifamily
SolarRoofsProgramisprovidedforprogramadministrationcosts.Wealsomadethe
assumptionthatanadditional10%ofthefundingallocationcouldbeusedtosupport
energyefficiencymeasuresasaresultoffundingshortfallsinotherenergyefficiency
programs.77Fromthisbaseline,$80millionannuallywouldbeavailableforinvestmentsin
solarenergysystems(SolarPV+EnergyStorage).
Undertheinvestmentstructure,thehighestlevelofsolarPVincentivesproposedisfor
propertyownedsolarenergysystemsatexistingmultifamilyproperties.Thisincentivetier
proposes$3.20/wattforPVservingresidentialunitsand$2.20/wattforPVserving
commonareas.Forthiscategoryofinstallationstherearenootherleveragedfunding
sourcestooffsetcosts,andnouseofTPOfinancingstructures.Toassesssensitivities
regardingprogramfinancingweassumedthat100%ofthesolarPVinstallationsareatthis
levelsincethiscategoryoffundingwouldplacethehighestdemandonincentives.For
energystorage,weassumedanincentivelevelof$0.50/WattHour,whichisconsistent
withlevelsintheSGIPprogram.
75
AB693.Section1(f).
Thetargetofinstallingatleast300MWofnewsolarcapacityisbasedonafundingscenarioinwhich
theprogramisallocatedthefullleveloffundingauthorizedunderSection2870(c)overthe10-year
period.
77
AsnotedinSectionX,theuseofAB693fundingallocationsforenergyefficiencywouldonlybe
consideredasalastresortiffundingfromotherenergyefficiencyprogramsoraccountsisnotavailable.
76
59
ForPVinstallationcosts,weassumedanaveragecostof$3.20/watt,whichisdescribedin
theproposal.Fora270kWsystemdesignedtooffset70%ofresidentialelectricityuseand
100%ofcommonareauseinamultifamilyproperty,theestimatedcostwouldbe
$764,000.
Theenergystoragesystem’scapacityandcostsisbasedonananalysisperformedby
Geli,78,79whichisdescribedindetailinSectionXI.Thedesignofthissystemisintegrated
withthesolarPVinstallationtooptimizepeakreductionsforbothresidentsandcommon
areas.Forastoragesystemdesignedtooptimizeelectricbillreductionforbothresidents
andcommonareas,thiswouldaddanadditional$180,000incostfora360kilowatt-hour
storagedeviceatanincentiveof$0.50/watt-hour.Theanalysisdoneassumesthat100%
ofthepropertiesinstallingPVwouldalsoincorporatestoragedevices.Energystorage
wouldbeoptionsundertheprogramandthisassumptionisfarinexcessofwhatis
expectedundertheprogram.Itisusedheretomodelaworstcasescenario.
Thecapacityandcostsforthesolarenergysystem(SolarPV+EnergyStorage)isshownin
Table12.Tomodelout-yearcosts,weassumeda7%reductioninsolarPVcostsanda5%
reductioninstoragecostseachyear.
Table12–AB693BudgetAnalysis
PVCapacityandCostEstimates
Residential
units
Commonarea
80
PVcapacity(kW)
170 100
PVincentive($/W)
$3.20
$2.20
TotalPVincentive
$544,000
$220,000
Storagesize(kWh)
270
90
Storageincentive($/Wh)
$0.50
$0.50
TotalStorageincentive
$135,000
$45,000
Totalincentive
$679,000
$265,000
Entire
Property
270
$2.83
$764,000
360
$0.50
$180,000
$944,000
78
BasedonGelianalysisoftenantbillsavingsundertime-of-useratesfor75unitaffordablehousing
property.
79
Basedonlargestsystemsizefoundtobeeconomicforaffordablehousingpropertiesanalyzedin
ClosingtheCaliforniaCleanEnergyDivide,availableathttp://www.cleanegroup.org/cegresources/resource/closing-the-california-clean-energy-divide/
80
SolarPVassumptionsbasedonanalysispresentedinAppendixE:IncentiveStructureforPV
Installation.
60
Findings:TheresultsoftheanalysisareshowninTable13overtheten-yearlifeofthe
program.Keyfindingsinclude:
i. Firstyeargeneratingcapacityisestimatedof22.9MW.Thisestimateisaworstcasescenariosinceitassumesthat100%oftheinstallationsarefundedatthe
highestincentivelevelproposedfortheprogramandthat100%ofthe
installationsincludeenergystoragesystems.
ii. CumulativedeploymentofsolarPV–includingefficiencyandstorage–overan
anticipatedten-yearlifetimeoftheincentiveprogramwouldbe317MW.Ifthe
inclusionofenergystoragedevicesisadjustedto50%oftheproperties,whichis
amorerealisticexpectation,theestimatedaddedgeneratedcapacitywouldbe
354MW.Ifmoreblendedfundingscenariosareusedtoreflectthedifferent
incentivestructuresproposed,thecase,theestimatecouldexceed400MW.
iii. Inclusionofstoragedevicescouldincreaseannualaffordablehousingelectricbill
savingsbyanadditional$21millionperyearoverthelifetimeoftheprogram,
amountingto$317millioninstorage-enabledsavingovertheanticipatedlifeof
thesystems.
Table13–AB693CapacityGenerationAnalysis
EstimatedOutcomesofIntegratedSolarEnergySystems
Annual
Cumulative
PV
Storage
Cumulative
storage
storage
incentive
incentive PVcapacity PVcapacity
savings
savings
Year
($)
($)
(MW)
(MW)
(million$)
(million$)
1
2
3
4
5
6
7
8
9
10
764,000
710,520
660,784
614,529
571,512
531,506
494,301
459,699
427,521
397,594
180,000
171,000
162,450
154,328
146,611
139,281
132,317
125,701
119,416
113,445
22.9
24.5
26.2
28.1
30.1
32.2
34.5
36.9
39.5
42.3
22.9
47.4
73.6
101.7
131.8
164.0
198.5
235.4
274.9
317.1
1.5
1.6
1.7
1.9
2.0
2.1
2.3
2.5
2.6
2.8
1.5
3.1
4.8
6.7
8.7
10.8
13.1
15.6
18.2
21.0
Ofcourse,iffundinglevelsarelessthananticipated,thesenumberswouldchange,butthenso
presumablywouldthetarget.Theanalysisestablishesthatthereisnofactualbasisforarguing
againsttheinclusionofenergyefficiencyandenergystoragebasedonprogram’sabilityto
reachAB693’sMWgoalatfullfundinglevels.
61
LocalHiringRequirements81
IX.
AB693requiresthattheCommission“establishlocalhiringrequirementsforthe
programtoprovideeconomicdevelopmentbenefitstodisadvantagedcommunities.”82
Particularlyoverthelastfiveyears,localhiringhasbeenacceptedasakeyanti-povertytool
acrossthestate.Consequently,therearenowawiderangeoflocalhiringpolicies:“goodfaith”
FirstSourcelocalhiringpolicies,SanFrancisco’smandatoryLocalHiringPolicyforConstruction,
U.S.DepartmentofTransportation’slocalhiringpilots,amongmanyothers.AB693hasalso
soughttosimilarlyguaranteegood-payingjobsforresidentsofdisadvantagedcommunities
withinthesolarindustry.TheJointPartiesfeelstronglythatthemosteffectivewaytoensure
thatrooftopsolarinstallationsprovideeconomicdevelopmentbenefitstodisadvantaged
communitiesistoensurethatthoseinstallationstranslateintogoodpaying,long-lastingjobs
forlocaldisadvantagedresidents.
TheProgram’slocalhiringpolicyshouldincludearobustdatacollectionrequirement.
Thelocalhiringpolicydesignshouldincludereliableandgranularworkforcedata
collection.ThecollecteddatawillbecriticaltonotonlydeterminingthesuccessofAB693’s
localhiringrequirements,butalsoprovidinginsightsastohowtoimprovelocalhiringpolicies
infutureiterationsoftheprogram.TheCommissionshouldrequirecontractorstoprovidedata
totheProgramAdministratoron:
•
•
•
•
•
Thenumberofwork-hoursperformedbylocalresidents,disadvantagedresidents,
minorityworkers,andwomenworkersaswellasthetotalnumberofworker-hours
performedforeachproject
Jobretention,namelythelengthoftimethecontractorkeepslocalresidentsemployed
Employeeaccessindustry-recognizedcertifications
Wagesandbenefitsofalltemporary,part-timeandfull-timeemployees
Employeetraveldistanceand/ortraveltimetotheworksite
Collectingthisdatawillrequireaunifiedworkforcereportingsystemthatcollects
certifiedpayrollreporting.Reflectingthediversityofthestate,thisreportingsystemshould
havemodulescapableoftrackingdifferentlocalhiringpolicies,rangingfrom“goodfaith”to
81
Question12,oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
§2870(f)(6).
82
62
mandatorylocalhiringpolicies.Thesystemshouldalsobedynamicaswellbytrackingdatain
realtimeandallowingtheawardingbodytoforecasthowmuchworkforceisneeded.The
system’sgranularmeasurementofprojectwork-hourswillmeasurethesuccessofjobtraining
serviceproviders,helptofocustrainingdollars,andadjustlocalhiringpoliciesforunderutilized
andoverutilizedtrades.
TheCommissionshouldalsorequirecompatibilitywithothermajorworkforcedata
collectionsystems,particularlyinhousingandenergyefficiency.Forinstance,Section3ofthe
HUDActof1968isthelegalbasisforprovidingjobsforresidentsandawardingcontractsto
businessesinareasreceivingcertaintypesofHUDfinancialassistance.Giventhesheervolume
ofHUDwork,83Section3datacollectionandreportinghasbecomestandardizedamongthe
manydevelopers,contractors,andsubcontractorsonHUD-financedprojects.Theworkforce
datacollectionsystemalsoprovideskeypolicyguidanceforhousingauthorities,
redevelopmentagencies,andfederalDepartmentofHousingandUrbanDevelopment(HUD).
Similarly,theCommissionshouldseektocompatibilitywiththispre-existingsystem.
ForthisProgram,workforcedatacollectionshouldbeimplementedwithlittletono
additionaladministrativeburdenoncontractors.Theprocessandreportingmechanismshould
leverageexistingcontractors’internalreportingcapabilitiesandaccommodateanytemplatefor
certifiedpayrollreportingsystemusedinthestate.Utilizingaworkforcereportingsystemthat
hasbeenadoptedmostmajorcountiesinCaliforniawouldalsoavoidadditionalburdensor
coststocontractorsalreadyfamiliarwiththebasicsofcertifiedpayrollreporting.Bytaking
advantageofexistingworkforcedevelopmentframeworksandpractices,theCommissioncan
thusbesensitivetotheneedsofcontractorsbyadoptingoneunified,structurallymanageable
andscalableworkforcereportingsystem.
83
From2012to2015,HUDfundinggenerated110,500jobsfornewSection3employeesandtraineesas
wellas$4.8billionawardedtoSection3businesses.U.S.DepartmentofHousingandUrban
Development,“Section3:ConnectingLow-IncomeResidentswithOpportunity”,June23,2016,available
at:http://portal.hud.gov/hudportal/documents/huddoc?id=section3_brochure_final.pdf
63
TheCommissionshouldinitiallyestablishbasefloorrequirementsforlocalhiringthatwill
evolveintostrongerpolicies.
Reflectingthediversityofthestate,localhiringrequirementsforAB693shouldbeboth
flexibleandstrongenoughtoshiftthemarketfocustoprioritizingjobopportunitiesforlocal,
low-incomeanddisadvantagedcommunities.SolarinstallersreceivingProgramincentives
shouldproactivelyworkwithlocalWorkforceInvestmentBoards(WIBs)andlocaljobtraining
organizationstorecruitnewhiresfromlocaldisadvantagedcommunities.Toensurethequality
ofjobsthatgotolocaldisadvantagedresidents,solarinstallersshouldadheretoprevailing
wagerequirementswhensuchrequirementsaretriggeredbyleveragedfinancingsourceson
Programprojects,asSanFrancisco’ssuccessfulmandatorylocalhiringlawdoes.Finally,solar
installersreceivingProgramincentivesshouldcollectandmakepubliclyavailablesufficiently
detaileddatatoinformfuturelocalhirepolicies.
TheProgram’slocalhiringpolicyshouldprimarilyfocusonjobplacementratherthanjob
training.
WhileJointPartiesrecognizethatjobtrainingisanimportantelementofaproviding
economicdevelopmentbenefitstodisadvantagedcommunities,webelievethattheProgram
shouldfocusprimarilyonjobplacement.First,thetextofAB693explicitlycallsforthe
Commissiontoestablish“localhiringrequirements.”ItdoesnotasktheCommissionto
establishajobtrainingrequirement.Second,JointPartiesbelievethatthestate’ssolar
workforcedevelopmentgoalswouldbebestservedbyhavingtheProgramtranslatethe
successofpreviousjobtrainingrequirementsintoactualjobplacement.
Jobtrainingrequirementsinpreviousstate-widesolarincentiveprograms,suchasthe
SingleFamilyAffordableSolarHomes(SASH)andtheMultifamilyAffordableSolarHousing
(MASH)programs,havebeensuccessfulinincreasingthepoolofdisadvantagedresidentswho
arequalifiedtoperformresidentialsolarinstallations.Butjobtrainingisnotsufficienttofully
realizethepotentialcommunityeconomicdevelopmentbenefitsofaffordablehousingsolar
64
incentivesandismeaninglessifitisnotfollowedbyjobplacement.Thus,whileAB693should
includeajobtrainingcomponent,effortsrelatedtojobtrainingshouldbeamuchsmallerpart
oftheprogramcomparedtojobplacement.Requiringactualjobplacementfordisadvantaged
residentsisessentialtocreatinglong-lastingeconomicbenefitsfordisadvantagedresidentsand
theircommunities.
Anumberofjobtrainingserviceprovidersandcommunity-basedorganizationshave
demonstratedstrongcommitmenttobothjobtrainingandplacementinthesolarindustry,
includingorganizationssuchasGridAlternatives,RisingSunEnergyCenter,SanFrancisco
ConservationCorps,AsianNeighborhoodDesign,amongmanyothers.Totakeadvantageof
theseexistingjobtrainingprograms,theCommissionshouldestablishanelectronicdatasource
tolistallavailableworkforcefromlocal,low-incomeanddisadvantagedcommunities,thus
enablingcollaborationbetweenlocaljobtrainingorganizationsandcontractorsandensuringan
effectivebalancebetweenworkforcedemandandsupply.
Itisalsoimportanttoemphasizethatlow-incomeanddisadvantagedworkersmayhave
barrierstoaccessingtrainingprogramsduetolackofcompensationduringtrainingprograms.
Inaddition,theseworkersfaceotherbarrierssuchasadequatetransportation,childcare
obligations,andotherbarriers.WethereforerecommendthattheCommissiontargettraining
programsthathavebeenabletoaddressoneormoreofthesebarrierstotraining.
ForthefirstthreeyearsofsolarprojectsfundedbyAB693,theCommissionshouldadopta
broadlocalhirebaserequirementcoupledwitharequirementtocomplywithprevailingwage
requirementsonProgramprojectswhensuchrequirementsaretriggeredbyleveraged
financingsources
Forthefirstthreeyearsofimplementation,theCommissionshouldrequirecontractors
receivingProgramincentivestomakeagoodfaithefforttohirelocalresidentsforits
installations.TheCommissionshouldalsorequirecontractorstocomplywithstateprevailing
wagerequirementsonsolarenergysystemsinstalledthroughtheMultifamilySolarRoofs
Programwhensuchrequirementsaretriggeredbyleveragedfinancingsources.A“goodfaith
65
effort”tohirelocalresidentsmeansthatcontractorsshouldproactivelyreachouttolocalWIBs
andjob-trainingorganizationstofindqualifiedlocalresidentstofillopenpositions.
AB693doesnotexplicitlydefine“localhire.”However,thisterm“primarilyrefersto
programsthatrequiredirecthiringofresidentsofspecificlocalareas.84Consideringthe
significantdemographicvariationthroughoutthestate,“localresident”shouldbebroadly
definedasanindividualresidinginthesamecountyastheprojectoranindividualhiredfroma
job-trainingorganizationlocatedinthesamecountyastheproject.ToensurethatAB693local
hiringrequirements“provideeconomicdevelopmentbenefitstodisadvantaged
communities,”85theCommissionshouldprioritizehiringfromCalEnviroScreen-designated
disadvantagedcommunitiesandlow-incomecommunitiesaswellasthehiringof
disadvantagedworkers.
TheplainlanguageofAB693supportsprioritizingworkersfromthesecommunities.
Section2870(f)(6),thelocalhireprovision,clearlyrequiresthat“localhiring”requirements
“provideeconomicdevelopmentbenefitstodisadvantagedcommunities.”86Inotherwords,
disadvantagedcommunitiesaretheprimaryintendedbeneficiariesofthelocalhiring
requirements.Thisprovisionissupportedbyoneofthebill’slegislativedeclarations,which
proclaims:“[i]nstallingqualifiedsolarenergysystemsindisadvantagedcommunitiescan
providelocaleconomicdevelopmentbenefits.”87Thisparagraphdemonstratesthatthe
Legislatureviewssolarinstallationsindisadvantagedcommunitiesasproviding“local”(i.e.,ina
disadvantagedcommunity)economicbenefits,suchasjobopportunities.
84
UCLALaborCenter,ExploringLocalHire:AnAssessmentofBestPracticesintheConstructionIndustry,
p.13(March2014),availableathttp://www.labor.ucla.edu/publication/exploring-targeted-hire/.
85
Cal.Pub.Util.Code§2870(f)(6)(emphasisadded).
86
Cal.Pub.Util.Code§2870(f)(6).
87
AB693Section1(c)(emphasisadded).
66
ForprojectslocatedinCESDACs,contractorsshouldprioritizehiringresidentslocatedin
communitiesdesignatedasdisadvantagedbyCalEnviroScreen88inthecountywheretheproject
issited.IftherearenotenoughqualifiedworkersfromCESDACs,workersshouldthenbe
pulledfromlow-incomecommunitiesoutsideofCESDACsbutstillwithinthecountywherethe
projectissited.ForprojectslocatedoutsideofCESDACs,contractorsshouldprioritizehiring
residentsoflow-incomecommunitieswithinthecountywheretheprojectislocated.If,after
firstseekingworkersfromCESDACsandlow-incomecommunitiesthereremainsaninsufficient
numberofqualifiedworkers,otherworkersmaybeselectedfromacrossthecounty.Ifthe
contractorcannotfillanopenpositionwithaqualifiedlocalresident,itshouldsubmittothe
ProgramAdministratorawrittendescriptionofthestepsittooktofindaqualifiedlocal
resident,reasonsthatitdidnothirealocalresidentreferredtothembyalocaljob-training
organizationiftherewassuchareferral,andthecityandcountyofresidenceoftheworkerit
didhire.TheserecommendationsnotonlyalignwiththelanguageandintentofAB693,they
alsotargetcommunitiesthatmaybethemostinneedofeconomicopportunitiesandensure
thatcontractorshaveabroadpoolofworkerstochoosefromtoavoidprojectdelays.
Additionally,contractorsshouldmakeaparticularefforttohiredisadvantagedworkers.
Adisadvantagedworkerissomeonewhofacesorhasovercomeatleastoneofthefollowing
barrierstoemployment:beinghomeless;beingacustodialsingleparent;receivingpublic
assistance;lackingaGEDorhighschooldiploma;participatinginavocationalEnglishasa
secondlanguageprogram;orhavingacriminalrecordorotherinvolvementwiththecriminal
justicesystem.89Aswiththeprioritizationrecommendationabove,theprogramadministrator
wouldretaintheflexibilitytoseekotherqualifiedworkerswhendisadvantagedworkersare
unavailable.
88
The cut-off point for CalEnviroScreen-designated disadvantaged communities for the purposes of the
local hiring policy should coincide with the adopted cut-off point for the Program as a whole. That is, if
the Commission adopts Joint Parties’ proposal to define “disadvantaged communities” for the Program as
the top 25% of CES-designated disadvantaged communities either across the state or by IOU territory
(whichever captures a greater number of census tracts), the same measure should be used for the local
hiring policy.
89
This definition borrows from San Francisco’s definition of “disadvantaged worker.” See San
Francisco Administrative Code § 6.22(G)(2)(g).
67
Finally,toensurethattheProgramprovidesmeaningfulandsubstantialeconomic
benefitstodisadvantagedcommunities,theCommissionshouldrequirecontractorstocomply
withprevailingwagestandardsforalloftheirworkonAB693projectswhensuchrequirements
aretriggeredbyleveragedfinancingsources.Prevailingwagestandardsareintendedtoensure
thatpublicmoniescreategoodpayingjobs.Similarly,theCommissionshouldensurethat
individualsworkingforcontractorsreceivingincentivesunderAB693makeasustainableliving
wage.
Attheendofthreeyears,theCommissionshouldalsorequireeachoftheProgram
Administratortoissueasummaryreportdetailingtheirlocalhiringresults.Asdescribedabove,
theseresultswouldreportoutthegranulardatacollectedwithineachIOUterritory.These
reportsshouldalsoincludebreakoutsoflocalhiringbycountyaswellasasurveyofthe
contractorsandotherworkforcedevelopmentsystemstakeholders.Assessingthreeyearsof
thisdataasafoundation,workforcestakeholdersandtheCommissionwillthenbeableto
furtherevolvelocalhiringpoliciesandtargetingofdisadvantagedcommunitiesacrossthestate
ofCalifornia.
68
X.
EnergyEfficiencyRequirements90
TomeetthelegislativerequirementsofAB693,andtoensuresolarsystemsarecost-effectively
sizedforefficientbuildingloads,werecommendtheCPUCadopta15%energyefficiency
requirementforparticipatingbuildings,withassociatedsupportinservicesandfunding.
The15%energyefficiencyrequirementwouldinclude:
-
Acomprehensiveauditandimplementationplan
A3yearflexibilityprovisiontocompleteidentifiedimprovements
Alternativecompliancemechanisms,e.g.proofofrecentretrofitormeetingaset
EnergyUsageIntensitybenchmark
Fulltechnicalandprogrammaticsupportforowners
Fundingsupportviaexistingprogramsandanadditionalfundthatleveragesoneor
moreofthefollowingfundingsources:
o UnspentAB693funding
o NewfundingunderPUCCodesection748.5
o EnergySavingsAssistanceProgramgeneralorunspentfunds
o EnergyEfficiencyportfolioprogramgeneralorunspentfunds
Theefficiencycomponentwouldalsocontributetowardsmeetingthestate’sefficiency
doublingrequirementunderSB350.
LegislativeRequirements
AB693requiresthat:
Thecommissionshallestablishenergyefficiencyrequirementsthatareequaltothe
energyefficiencyrequirementsestablishedfortheprogramdescribedinSection2852,
includingparticipationinafederal,state,orutility-fundedenergyefficiencyprogramor
documentationofarecentenergyefficiencyretrofit.91
TheapplicablelanguageunderPUCCodesection2852states:
(c)(3)Allmoneyssetasideforthepurposeoffundingtheinstallationofsolarenergy
systemsonlow-incomeresidentialhousingthatareunexpendedandunencumberedon
January1,2022,andallmoneysthereafterrepaidpursuanttoparagraph(2),exceptto
theextentthosemoneysareencumberedpursuanttothissection,shallbeutilizedto
augmentexistingcost-effectiveenergyefficiencymeasuresinlow-incomeresidential
housingthatbenefitratepayers.92
90
91
AB693amendmentstoPublicUtilitiesCode,Section2870(f)(7).
92
PUC,Section2852(d)(2),emphasisadded.
69
(d)InsupervisingaprogramimplementingtheCaliforniaSolarInitiativepursuanttothis
section,thecommissionshallensurethattheprogramdoesallofthefollowing:
(d)(2)RequiresparticipantswhoreceivemonetaryincentivestoenrollintheEnergy
SavingsAssistanceProgramestablishedpursuanttoSection382,ifeligible.93
AB693thusrequiresqualifiedmultifamilypropertiesreceivingassistanceundertheMultifamily
SolarRoofsprogramtoundertakeenergyefficiencyimprovementsasaconditionofreceiving
incentivesforthesolarenergysystem.Furthermore,PUCCodesection2852(c)(3)establishes
thatunencumberedfundscanbeusedtoaugmentcost-effectiveenergyefficiencymeasures.
Additionally,SB350,enactedduringthesamelegislativesessionasAB693,establishesa
requirement“todoubletheenergyefficiencysavingsinelectricityandnaturalgasfinalend
usesofretailcustomersthroughenergyefficiencyandconservation,”94andrequirestheCPUC
toestablishannualtargetsforstatewideenergyefficiencysavingsanddemandreductionthat
willachieveacumulativedoublingofstatewideenergyefficiencysavingsbyJanuary1,2030.95
UnderSB350,therequirementsestablishedtodoubleenergyefficiencymaybeachieved
throughenergyefficiencysavingsanddemandreductionresultingfromavarietyofprograms,
including“acomprehensiveprogramtoachievegreaterenergyefficiencysavingsinCalifornia’s
existingresidentialandnonresidentialbuildingstockpursuanttoSection25943.”96Under
Section25943ofthePublicResourceCode,acomprehensiveprogrammayinclude“abroad
rangeofenergyassessments,buildingbenchmarking,energyrating,cost-effectiveenergy
efficiencyimprovements,publicandprivatesectorenergyefficiencyfinancingoptions,public
outreachandeducationefforts,andgreenworkforcetraining.”97
Thus,thescopeandtherequirementsprescribedforonAB693pertainingtoenergy
efficiency,localhiring,outreachandeducation,aswellasthesolarinvestmentsandfinancing
options,provideacomprehensiveplatformtoadvancetheachievementofSB350mandatesin
theaffordablemultifamilyhousingmarket.
93
PUC,Section2852(d)(3)
SB350.Section2(a)(2).
95
SB350.Section6(c)(1).
96
SB350.Section6(d)(2).
97
PublicResourceCode.Section25943(a)(2).
94
70
EnergyEfficiencyProgramDesign
WerecommendtheCommissionconsiderthefollowingfactorsindesigninganeffectiveenergy
efficiencycomponentfortheMultifamilySolarRoofsProgram:
§ EnergyEfficiencyGoals:TheenergyefficiencyelementoftheMultifamilySolarRoofs
programshouldrequireaminimumenergyimprovementgoal.Werecommendthatthegoal
bedesignedtoachieveaminimumreductioninnetenergyuse(beforesolar)ofatleast15%
perproperty,asleadingwhole-buildingprogramscurrentlyrequire.98Thedesignofthe
energyefficiencyportionofthisprogramshouldbebasedonthisrequirement.
§ IncorporationofEfficiencyinSolarSystemDesign:Linkingenergyefficiencywiththe
installationofsolarenergysystemscanhelpreducethecostoftheinstalledsystemby
reducingtheassociatedload.Startingwithenergyefficiencyalsoensurescompliancewith
thestate’sloadingorder.99Beforeinvestinginmoreexpensivesolaroptions,morecost
effectiveimprovementsthatreduce–notoffset–energyuseshouldbeincorporatedinto
theinvestmentstrategy.Ifitisnotpossibletomaketheinvestmentinenergyefficiency
beforethesolarinstallation,thenthesolarsystemsizeshouldbecappedtoaccommodatea
futureinvestmentbasedontheenergyefficiencyreductionsidentifiedbyanenergy
efficiencyaudit.
§ AffordableHousingMarketSpecificSolutions:TheBayAreaRegionalEnergyNetwork
(BayREN)andtheLargeMultifamilyLIWPprogramhavedesignedandimplemented
successfulenergyefficiencyprogramsthataremodelsfortheMultifamilySolarRoofs
Program.Theseprogramshavebeenabletoenrollandscaleenergyefficiency
improvementsinmultifamilymarketsdescribedbyIOUenergyefficiencyadministratorsas
“underserved”and“hardtoreach.”Coreelementsoftheseprogramsthatcontributeto
theirsuccessandacceptancebymultifamilypropertyownersinclude:providingnocost
front-endtechnicalsupport,“One-Stop”programofferingsfromdesigntofull
implementationofenergyimprovementplans,andpropertyownerselectionofinstallation
contractors.
98
The15%energyperformancerequirementrecommendedforAB693isconsistentwiththeminimumenergy
reductionrequirementssetforthemultifamilyEnergyUpgradeCaliforniaprogramadministeredbyIOUSand
RegionalEnergyNetworks,andthestatewideLargeMultifamilyLowIncomeWeatherizationadministeredbythe
CaliforniaDepartmentofCommunityServicesDevelopment(CSD)andfundedfromCapandTradeallocations.
Specifically,bothBAYREN’swhole-buildingmultifamilyprogramandCSD’slargemultifamilyprogramnowrequire
a15%threshold.
99
“AsstatedinEnergyActionPlanIandreiteratedhere,costeffectiveenergyefficiencyistheresourceoffirst
choiceformeetingCalifornia'senergyneeds.Energyefficiencyistheleastcost,mostreliable,andmost
environmentally-sensitiveresource,andminimizesourcontributiontoclimatechange.”CPUC/CEC,EnergyAction
PlanII,ImplementationRoadmapforEnergyPolicies(October2005).Availableat:
http://docs.cpuc.ca.gov/published/REPORT/51604.htm;“Theelectricalcorporationshallfirstmeetitsunmet
resourceneedsthroughallavailableenergyefficiencyanddemandreductionresourcesthatarecosteffective,
reliable,andfeasible.”Cal.PublicUtil.Code§454.5(b)(9)(C).
71
§ FundingResources:Withinaffordablehousingmarkets,energyefficiencyimprovementsfor
bothresidentialunitsandcommonareasrequiressignificantupfrontfundingsupport.
Affordablemultifamilyhousingisdefinedbyrentaffordabilityandotherregulatory
restrictionsthatlimitpropertycashflowandowners’abilitiestoundertakewholebuilding
energyefficiencyretrofitsoutsideofprojectrefinancingcycles(whichoftenextendbeyond
twentyyears).Additionally,equipmentreplacementreservesarelimitedandgenerally
insufficienttocoverthecostsofmajorenergyimprovementsorwholebuildingenergy
efficiencyretrofits.Toaddresspropertyresourceconstraintsinimplementingenergy
efficiencyimprovements,werecommendthatutilitycustomerandGreenhouseGas
ReductionFundenergyefficiencyprograms,suchastheEnergyUpgradeCaliforniaandCSD’s
LIWPLargeMultifamilyprogram,beleveragedtoenablewholebuildingenergyinvestments
forthissector.Asdescribedbelow,wealsostronglyurgetheCommissiontomakeadditional
fundsavailabletosupplementlikelyremainingshortfalls.Suchanapproachisnecessaryto
mitigatefundingbarriersandtoaddresslow-incomeenergycostburdens.
§ PhasedImplementation:Energyimprovementsinmultifamilypropertiesareoftenplanned
aroundscheduledequipmentreplacements,vacancies,andrecapitalizationevents.
Flexibilityshouldbeprovidedwithregardstotheschedulingandphasingofenergy
improvementstomitigateschedulingconflictsornegativeimpactsonsolarenergysystem
installations.
§ OneStopImplementation:Tosuccessfullyimplementtheprogram,comprehensivetechnical
supportmustbeprovidedtothepropertyownertoassessenergyefficiencyopportunities
andtodevelopacorrespondingenergyefficiencystrategyandplanthatmeetstheneedsof
thepropertyownerandtenants.Thissupportmustinclude(1)anenergyauditthatprovides
adetailedanalysisofenergyusage,costs,andthebuildingsystemsandconditionsaffecting
energyconsumption,and(2)supportservicestocoordinateintegratedfundingofresident
unitsandcommonareaenergyefficiencyimprovements.TheBayRENMultifamilyEnergy
UpgradeprogramandtheLargeMultifamilyLIWPprogramhaveadoptedservicedelivery
planstointegratethesesupportservicesintotheirprogramdesigns.Werecommendthese
servicedeliveryplansbereplicatedbytheMultifamilySolarRoofsProgram.100
§ PresumptionofCompliance:QualifiedpropertiesparticipatingintheMultifamilySolarRoofs
Programshouldbepresumedtohavesatisfiedtheprogram’senergyefficiencyrequirements
ifthepropertyhasundergoneawhole-buildingenergyretrofitwithinthelastthreeyears
thatwassupportedthrougharecognizedenergyefficiencyprogram.101Werecommend
definingawhole-buildingretrofitasonethatcanreasonablybeexpectedtohaveachieved
100
InformationintheservicedeliveryandplansadoptedbythemultifamilyBayRENandLargeMultifamilyLIWP
programsisavailableat:www.camultifamilyenergyefficiency.organd
www.bayareamultifamily.org.
101
TheseprogramsincludetheMultifamilyEnergyUpgradeCaliforniathatareadministeredbyIOUs,Regional
EnergyNetworks,orCCA,(IOU,REN,orCCAadministered),thelargeandsmallmultifamilyLowIncome
WeatherizationadministeredbytheCaliforniaDepartmentofCommunityResourcesDevelopment(CSD)LIWP,
andenergyefficiencyimprovementsfundedbytheCaliforniaTaxCreditAllocationCommittee(TCAC).
72
10-15percentsavings,orabuildingthatwasnewlyconstructedorsubstantiallyrehabilitated
withinthelastthreeyearsandmetorexceededTitle24energybuildingperformance
standards.Additionally,foraffordablehousingorganizationswithestablishedenergy
benchmarkingprograms,theProgramAdministratorcouldestablishapresumptionof
compliancethroughdemonstrationthattheaffordablehousingpropertymeetsprescriptive
EnergyUseIntensity(EUI)thresholdsorPortfolioManagerbenchmarkscoressetbythe
ProgramAdministrator.
ProposedEnergyEfficiencyProgramStructure,Requirements,andProcess
WerecommendthattheenergyefficiencyrequirementsfortheMultifamilySolarRoofs
Programbeimplementedthroughthefollowingsteps.
§ EnergyEfficiencyProgramTechnicalSupportAdministrator:TheProgramAdministrator
contractswithanEnergyEfficiencyProgramAdministratortofacilitatetheimplementation
ofresidentandcommonareaenergyefficiencyimprovementsatthemultifamilysite.The
EnergyEfficiencyProgramAdministratorprovidestechnicalassistanceinevaluatingsite
conditionsandopportunitiesforenergyefficiencyimprovementsandfacilitatesproperty
ownerandtenantaccesstoavailableenergyefficiencyresources;similartowhatoccurs
undertheBayRENandLIWPprograms.
§ EnergyAuditandWorkScopeDevelopment–Afterinitialprojectintake,theEnergy
EfficiencyProgramAdministratorprovidesorapprovesanASHRAELevel2orhigherenergy
audit,whichincludesabillinganalysisandcomprehensiveassessmentofsiteenergysavings
opportunities.Theenergyauditsaresharedwiththepropertyownerandprovideabaseline
forpreparinganEnergyImprovementPlan.Theenergyefficiencyreductionsidentifiedby
theauditmustalsobeconsideredandfactoredintothedesignofthesolarenergysystem.
§ ApprovalofScopeofWork–Thepropertyownerreviewstheenergyauditandproposed
scopeofworkwiththeEnergyEfficiencyProgramAdministratorandtogethertheyapprove
anEnergyImprovementPlan(EIP)thatincludessomeoralloftherecommendedenergy
efficiencymeasures.TheapprovedEnergyImprovementPlanmustreduceenergyusebyat
least15%.ApprovaloftheEnergyImprovementPlanisaconditionofprogramparticipation.
§ EnergyBenchmarking–Thepropertyownerisrequiredtobenchmarktheirpropertyto
assesscurrentenergyuseandmonitortheenergyperformanceofthepropertytotheextent
thatwhole-buildingenergyusagedataismadeavailablebyutilitiespursuantto
requirementsetbyAB802.AB802,whichrequiresthebenchmarkingofenergyusagedata
formultifamilybuildingswith5ormoreunitswithgreaterthan17accountsand50,000
squarefeet.102TheEnergyEfficiencyProgramAdministratorwillprovidesupporttoassist
propertyownersinimplementingenergybenchmarkingrequirements.
102
AB802revisesPRCSection25402.10torequireutilitiestoprovideenergyconsumptiondataforcovered
buildingstothebuildingownersuponrequest,andrequirestheEnergyCommissiontoestablishabuildingenergy
usebenchmarkingandpublicdisclosureprogramforcertainbuildingsincludingmultifamilyhousing.
73
§ EnergyEfficiencyPhasingandScheduling–Thepropertywouldhaveupto36monthstofully
implementtheEnergyImprovementPlan.Duringthisperiod,energyimprovementswillbe
phasedinatthepropertyinconjunctionwithscheduledequipmentreplacements,
vacancies,andasenergyefficiencyprogramrfundsbecomeavailabletothepropertyowner.
§ EnergyEfficiencyProgramAccessandIntegration–TheEnergyEfficiencyProgram
Administratorassiststhemultifamilypropertyownersandtenantsindevelopingafunding
planforplannedenergyefficiencyimprovementsandaccessingenergyefficiencyresources
availableunderutilitycustomerandGreenhouseGasReductionFundprograms.
§ ProjectCompletionandDocumentation–OncetheapprovedmeasuresintheEnergy
ImprovementPlanareinstalled,thepropertysubmitsacertificationthattheenergy
efficiencyplanhasbeenimplemented.Theenergyefficiencytechnicaladministratorshould
undertakerandomsiteinspectionsorotherreviewstoverifyinstallation.
FundingforEnergyEfficiencyRequirements
WerecommendtheCommissionensurethatcomprehensivefundingforenergyefficiency
improvementsismadeavailableundertheMultifamilySolarRoofsprogramviathefollowing
fundingsources,inorderofpriority:
§ ExistingEnergyEfficiencyPrograms:Werecommendfundingforcomprehensiveenergy
efficiencyimprovementsprimarilybemadeavailablefromutilitycustomer,GreenhouseGas
ReductionFundedprograms,andhousingfinanceprograms.Theseprogramsincludethe
EnergyUpgradeCaliforniaMultifamilyprogramsthatareadministeredbyIOUs,Regional
EnergyNetworks,orCCA,(IOU,REN,orCCAadministered),thelargeandsmallmultifamily
LowIncomeWeatherizationProgram(LIWP)administeredbytheCaliforniaDepartmentof
CommunityServicesandDevelopment(CSD),andenergyefficiencyimprovementsfundedby
LowIncomeTaxCreditsawardedbytheCaliforniaTaxCreditAllocationCommittee(TCAC).
TheCommissioncangreatlyenhanceaccesstoratepayerenergyefficiencyprogramsby
adoptingrulesrequiringgreaterintegrationacrosstheratepayerenergyefficiencyprograms,
andbyallowingutilitiestopoolfundsfromtheirrespectiveprogramsforpurposesoftheAB
693efficiencyrequirement.Currently,theseresourcesaresiloedandextremelydifficultto
leverageorcombineforeligibleenergyefficiencyprojects.Poolingfundswouldenable
ownerstodocomprehensiveretrofitsbyminimizingnumerousandoftenconflicting
participationrequirements.Appropriateenergysavingscreditcouldbeapportionedtothe
respectiveprogramadministrators.
§ UnspentAB693funding:UnspentfundingfromprioryearAB693allocationsshouldbe
madeavailableininstanceswhereenergyefficiencyprogramresourcesarenotavailable,or
areinsufficient.WerecommendthattheCPUCensuretheProgramAdministratorhasthe
flexibilitytoprovidefundingfromtheMultifamilySolarRoofsprogramonacase-by-case
basistoimplementenergyefficiencyimprovements,subjecttotheavailabilityofunspentAB
74
693resourcesfrompreviousyears.Allocatingunspentfundsinagivenyeartocost-effective
energyefficiencyimprovementsisinpartrequiredbyAB693’simplementinglegislation,
whichstipulatestheenergyefficiencyrequirementbeequaltothatinPublicUtilitiesCode
section2852.103PublicUtilitiesCodesection2852(c)(3),inturn,providesthatunspentfunds
shallbeallocatedtocost-effectiveenergyefficiencyimprovements.104
§ NewFundingUnderPUCCodeSection748.5:Section748.5ofthePublicUtilitiesCode
providesthat:“thecommissionmayallocateupto15percentoftherevenues,includingany
accruedinterest,receivedbyanelectricalcorporationasaresultofthedirectallocationof
greenhousegasallowancestoelectricaldistributionutilitiespursuanttosubdivision(b)of
Section95890ofTitle17oftheCaliforniaCodeofRegulations,forcleanenergyandenergy
efficiencyprojects….”105AB693directedtheuseof10%oftheseresourcesforthe
MultifamilySolarRoofsProgram.Shouldfundingfromavailableenergyefficiencyprograms
andAB693beinsufficienttoimplementenergyefficiencyimprovementsunderthe
MultifamilySolarRoofsProgram,weproposethattheCommissionmakeavailablean
additional1-2%forefficiencyimprovementsundertheMultifamilySolarRoofsProgram,
fromthedirectallocationofgreenhousegasallowancestoelectricaldistributionutilities
pursuanttosubdivision(b)ofSection95890ofTitle17.
§ TransferringESAProgramResources:Asanadditionaloralternativefundingsourcefor
energyefficiencyimprovements,werecommendthataportionoftheunspentenergy
efficiencyfundsintheEnergySavingsAssistanceProgram(ESAP)bereprogrammedforuse
intheMultifamilySolarRoofsprogram.Between2009-2015,utilitiesaccumulatednearly
$400millioninunspentfunds,aportionofwhichcouldbeappliedtoefficiencyprojects
undertheAB693program.
ComplianceandDocumentation
Asevidenceofcompliancewiththeprogram’senergyefficiencyrequirements,participating
ownersshouldberequiredtoprovidethefollowingdocuments:
§ EnergyAuditApprovedEnergyImprovementPlan(providedorapprovedbytheenergy
efficiencytechnicaladministrator)
§ CertificationofEnergyEfficiencyProjectCompletion(providedbypropertyowner)
103
PUCSection2870(f)
PUCSection2852(c)(3)
105
PUC.Section748.5(c)
104
75
XI.
EnergyStorage106
AB693definesa“solarenergysystem”as“asolarenergyphotovoltaicdevicethat
meetsorexceedstheeligibilitycriteriaestablishedpursuanttoSection25782ofthePublic
ResourcesCode.”107ThePublicResourceCodeprovidesaddedclarificationthat,
"Solarenergysystem"meansasolarenergydevicethathastheprimarypurposeof
providingforthecollectionanddistributionofsolarenergyforthegenerationof
electricity,thatproducesatleastonekW,andnotmorethanfiveMW,alternating
currentratedpeakelectricity,andthatmeetsorexceedstheeligibilitycriteria
establishedpursuanttoSection25782.”108
Basedontheplainlanguageofthelaw,itslegislativehistoryandinterpretationsoftheterm
"solarenergysystem"byotherCaliforniaandfederalagencies,thedefinitionofthatterm
includesstoragedeviceswithinitscoverage.TheNonprofitSolarStakeholdersCoalition
recommendsthatthisviewoftheplainmeaningofthestatutorytermbeadoptedbythe
Commissionforthefollowingreasons:
§ Theplainlanguageof“solarenergysystem”mustrefertoallbalance-of-system
componentsofsuchasolarsystem.Thisobviouslywouldincludeallitscomponent
parts,suchasinvertersandmountingstructuresand,increasingly,storagedevices.109
§ Thelawdefinestheterm“solarenergysystem”underSec.25781(e)as“providingfor
thecollectionanddistributionofsolarenergy”–asolarprocessrelyingonallbalanceof-systemcomponents,includingstorage.
§ Thelaw’sonlyrelevantlegislativehistory,theCPUCrecognizedthatthelawwouldbe
“significantlydifferentfromexistingrenewableenergyprograms…[andtheCPUC]
wouldneedtoopenanewproceedingtodesignandestablishtheprogramrules.”
Specifically,theCPUCanalysisstatedthatwhilethecurrentMASHprogramprovides
incentivesonlytosolar-electricsystems,“theincentiveprogramproposedbythisbill
wouldincentivize“qualifyingrenewableenergysystems.”110
106
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(a)(4).
108
PublicResourceCode.Section25781(e)
109
UndertheSelf-GenerationIncentiveProgram(SGIP)nearly500solarplusstorageprojectshavebeen
supportedbypublicsubsidiesinCaliforniabasedonthebestreadingoftheprojectsfunded.SeeSGIP
WeeklyStatewideReportavailableat
https://www.selfgenca.com/documents/reports/statewide_projects.
110
Curran,ElizabethandKochanowsky,Amy,CaliforniaPublicUtilitiesCommission,“DivisionAnalysis:
MultifamilyAffordableHousingRenewablesProgram.”SeeattacheddocumentinAppendixF.
107
76
§ OtherCaliforniaandfederalagenciesinterprettheplainlanguagestatutoryterm“solar
energysystem”tounequivocallyincludestoragedevices.Thisissointhe
implementationbytheCaliforniaStateBoardofEqualizationforpurposesofexcluding
propertytaxesonsolarinstallations;111asreaffirmedbytheCaliforniaCleanEnergy
Authority112whiletheU.S.DepartmentofEnergydefines“solarenergysystem”to
includeoptionalbatteriesaspartofatypicalsolarbalance-of-system.113
Alegalanalysissupportingtheeligibleofenergystorageasacomponentofan
integratedsolarenergysystemthatprovidesforthecollectionanddistributionofsolarenergy
isprovideinAppendixG.
InclusionofStorageMeetsTenantBenefitandEquityGoalsoftheLaw
Overall,thelaw’spurposeistoensurethatlow-incometenantsresidinginaffordable
multifamilyhousingreceivetheeconomicbenefitsofboth“cleanenergyandenergyefficiency
projects.”Thisisachievedthroughtheinstallationofsolarenergysystems,energyefficiency,
andlocalhiringinawaythathelpslow-incometenantsreducetheirelectricbills,whilealso
achievingtheotherenvironmentalandcleanenergygoalsofthestate.114
Tomeettheselegislativegoals,affordablehousingownersandtheirtenantsshould
havethesameoptionsasotherutilitycustomerstochoosethecleanenergytechnologiesthat
111
CaliforniaStateBoardofEqualization-PropertyandSpecialTaxesDepartment,"GuidelinesforActive
SolarEnergySystemsNewConstructionExclusion."Availableat
https://www.boe.ca.gov/proptaxes/pdf/lta12053.pdf
112
CleanEnergyAuthority,“CaliforniaSolarRebatesandIncentives:CaliforniaPropertyTaxExclusionfor
SolarEnergySystems.”Availableathttp://www.cleanenergyauthority.com/solar-rebates-andincentives/california/california-property-tax-exclusion/.
113
Seehttp://energy.gov/energysaver/small-solar-electric-systemsand
http://energy.gov/eere/energybasics/articles/solar-photovoltaic-system-design-basics.
114
Accordingtoarecentstudy,whensitedanddeployedaccordingtoairqualitydata,energystorage
(andotherdistributedresources)canreducerelianceonpollutingpeakerpowerplantsandlower
emissionsindisadvantagedcommunities.ResearchersatUCBerkeleyandnonprofitresearchinstitute
PSEHealthyEnergyfoundthatstoragecanstrategicallyreplacemorepollutingenergyservicesinthe
areasmostsusceptibletopoorairqualityandaddressdecades-olddiscrepanciesinenvironmental
justice,wherebypoorneighborhoodshavebeenmorelikelytositnearthedirtiestpowerplants.So
smartplacementofstorageunderanAB693incentiveregimecouldbothreducetenantbillsand
improvethehealthoflowincometenants.SeeKrieger,CaseyandShonkoff,“FrameworkforSitingand
DispatchofEmergingEnergyResourcestoRealizeEnvironmentalandHealthBenefits:CaseStudyin
PeakerPowerPlantDisplacement,”EnergyPolicy96(2016)302-311
77
bestsuittheirneedsnowandinthefuture–includingenergyefficiency,solar,andstorage.
Excludingtheselow-incomeconstituenciesfromincorporatingstoragedeviceswouldprevent
low-incometenantsandpropertyownersinthisunderservedmarketfromhavingequalaccess
tothefullarrayofsolarandstoragetechnologymarketsandstateincentivesthatnow
principallybenefitthestate’shigh-incomecustomers.
Havingsaidthat,theNonprofitSolarStakeholdersCoalition’spositionisthatAB693
providesincentivesforstorageasanoptionalcomponentofasolarbalance-of-system,where
appropriate,butstorageisnotrequiredinallcases.Decisionsonwhethertoincorporate
storagewithsolarshouldbelefttotheaffordablehousingpropertyownersandtheir
constituencies,dependingonwhatmakeseconomicsensetofulfilltheirhousingmissionand
providetenantbenefitswiththeincentivesupportunderAB693.
AdditionalStatutoryInterpretationArgumentsonStorageEligibility
Otherkeystateandfederalagenciesinterprettheterm“solarenergysystem”toinclude
batterystoragetomeetotherenvironmentalandenergylaws.
§ SB1–AkeyexpectationofSenateBill1,asreferencedintheCaliforniaEnergy
Commission(CEC)“GuidelinesforCalifornia’sSolarElectricIncentivePrograms,”isthe
expectationof“optimalsystemperformanceduringperiodsofpeakdemand.”115Asnet
gridelectricitydemandhasdecreasedduringsunnydaytimehours,shiftingpeak
demandperiodstowardsearlyeveninghoursoflowornosolarproductionisakey
legislativechallenge.Onlystoragedevicescanappropriatelyaddressthisproblemand
satisfythestate’spolicygoalofoptimizingsolarforpeakdemandperiods.
§ CPUC/CECPolicy–Theinclusionofenergystoragewithinthedefinitionof“solarenergy
system”isanexpresspolicypositionofboththeCECandCPUC.CEChasestablisheda
precedentfortheconsiderationofstorageaspartofasolarenergysystemwithin
SectionIII(F)ofits“RenewablesPortfolioStandardEligibilityGuidebook”.116Also,the
CPUCreferencestheseenergystoragepoliciesinDecision14-05-033,“Decision
RegardingNetEnergyMeteringInterconnectionEligibilityforStorageDevicesPaired
115
CaliforniaEnergyCommission,"GuidelinesforCalifornia’sSolarElectricIncentivePrograms."
Availableathttp://www.energy.ca.gov/2012publications/CEC-300-2012-008/CEC-300-2012-008-ED5CMF.pdf.
116
CaliforniaEnergyCommission,“RenewablesPortfolioStandardEligibilityCommissionGuidebook.”
Availableathttp://www.energy.ca.gov/2015publications/CEC-300-2015-001/CEC-300-2015-001-ED8CMF.pdf.
78
withNetEnergyMeteringGenerationFacilities”.117(Emphasisadded).Thus,theCPUC
hasdefinedastatewidegoaltoincludestoragewithinsolarenergysystemstoadvance
thecombinedsystemsforpurposesofnetmeteringandRPScompliancegoals.
§ PriorCPUCInterpretations–TheCPUChasusedthisexactlegislativeinterpretation
approachbeforeinasimilarincentivecontextquestioninvolvingtheSelf-Generation
IncentiveProgram(SGIP)whenstoragewasfoundtobeanenablingtechnologytoother
statutorilycoveredtechnologies.In2008,Decision08-11-044,theCPUCconcludedthat
storagedevices,althoughnotexplicitlymentionedinthestatuteatthattime,
neverthelesswouldbeeligibleforSGIPincentivesasa“coupled”technologybecauseit
enhancedthevalueofthestatutorilycoveredtechnologiesforpurposesofpeak
demandreduction.ThisisthesameargumentthatshouldbeadoptedherebythePUC
toallowforstorageincentives“coupled”withsolarunderAB693toadvancecurrent
peakdemandreductionandotherlegislativegoals.118
§ DepartmentofTreasuryInterpretations–Theinclusionofstoragewithinthedefinition
of“solarenergysystem”isperhapsmostclearlyexpressedatthefederallevel.Existing
Treasuryregulationstreatenergystoragedevicesasqualifying“solarenergyproperty”
forthepurposesofSection48investmenttaxcredit(ITC)eligibility.TreasuryRegulation
§1.48-9(d)providesthatqualifying“energyproperty”includes“solarenergyproperty”
forthepurposesofSection48.Section1.48-9(d)(3)statesthat“[s]olarenergyproperty
includesequipmentthatusessolarenergytogenerateelectricity,andincludesstorage
devices…andpartsrelatedtothefunctioningofthoseitems.”119Aninterpretationofthe
term“solarenergysystem”toexcludestoragewouldconflictnotonlywiththeseIRStax
rulesbutalsowithAB693Section2870(f)(4),whichrequiresleverageof“federaltax
credits.”Limitingthelawtojustsolargenerationwoulddeprivelow-incometenantsand
affordablehousingdevelopersofthe30percentITCavailabletoreducethecostsfor
combinedsolarandstoragesystems.
TheSolarandStorageValueProposition:HowIntegratedSystemsCreateGreaterTenant
EconomicBenefitsThanAloneSolar
TheinclusionofstoragedevicesinAB693implementationenablesadditionalvalue
creationthroughutilitybillsavingsforlow-incometenantsthatisgreaterthanwouldbe
117
CaliforniaPublicUtilityCommission,Decision14-05-033,“DecisionRegardingNetEnergyMetering
InterconnectionEligibilityforStorageDevicesPairedwithNetEnergyMeteringGenerationFacilities.”
Availableathttp://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M091/K251/91251428.PDF.
118
CaliforniaPublicUtilityCommission,Decision08-11-44,“DecisionAddressingEligibleTechnologies
UndertheSelf-GenerationIncentiveProgram(SGIP)andModifyingtheProcessforEvaluatingSGIP
ProgramChangeRequests.”Availableat
http://docs.cpuc.ca.gov/published/FINAL_DECISION/94272.htm.
119
InternalRevenueService,Treasury,"§1.48–9Definitionofenergyproperty."Availableat
https://www.gpo.gov/fdsys/pkg/CFR-2011-title26-vol1/pdf/CFR-2011-title26-vol1-sec1-48-9.pdf
79
availablewithsolar-onlyinstallations.Specifically,energystoragedevicespairedwithsolarcan
deliveradditionalbillsavingsfortenants(andpropertyowners)overstand-alonesolarthrough
twoavenues:
1) Reductionofdemandchargesforcommonarealoadswherethoseeconomicbenefits
canbesharedbyownerswithtenants.
2) Shiftingtenantsolarenergyuseundertime-of-userateswithstorage,directlyresulting
inlowerelectricbillsfortenants.
BothofthesevaluepropositionsaddedbyenergystoragemeetAB693goalstodeliverthe
mosteconomicbenefitsofsolarenergysystemstolow-incometenants—inwaysthatsolar-only
systemswithoutstoragecannotprovidenoworinthefuture.
ReductionofDemandCharges
Thereductionofdemandchargeexpensesforcommonarealoadsprovidesproperty
ownerswiththeabilitytodramaticallyreducetheiroverallelectricbills,providingthemwith
greaterincentivetoinstallsolarenergysystems120andnewopportunitiestosharethose
savingswithlow-incometenants.Quantitativeeconomicevidenceofthesesavingsispresented
inthereport“ClosingtheCaliforniaCleanEnergyDivide:ReducingElectricBillsinAffordable
MultifamilyRentalHousingwithSolar+Storage.”121
Thereportfindsthatitmakeseconomicsensetodayformanyaffordablerentalhousing
propertiesinCaliforniatoincludestorageinsolarinstallations.Infact,storagewasfoundto
improvetheeconomicreturnofasolarenergysystemacrossallofCalifornia’sinvestor-owned
utilityjurisdictions.Insomecases,addingstoragecouldvirtuallyeliminatecommonarea
electricbills,nearlydoublingthebillsavingsofstand-alonesolarataboutathirdoftheinstalled
120
Itgoeswithoutsayingbutdeservesrepeatingthatnobenefitsforlow-incometenantswillbederived
underAB693unlessaffordablehousingownershavethecorrectincentivestoinstallsolarenergy
systemsthatcangeneratethosetenantsavings.AB693isanincentiveprogram,notamandate.Unless
housingdeveloperscanseesomesavingsfromthesesystemsandotherwisefindwaystofinancethese
systems,therewillbenoprojectsandthusnoopportunitiestoshareeconomicbenefitswiththeir
tenants.
121
CaliforniaHousingPartnership,CenterforSustainableEnergy,CleanEnergyGroup,andGeli,“Closing
theCaliforniaCleanEnergyDivide:ReducingElectricBillsinAffordableMultifamilyRentalHousingwith
Solar+Storage.”Availableathttp://www.cleanegroup.org/ceg-resources/resource/closing-the-californiaclean-energy-divide/.
80
cost.Asshowninthefigurebelow,atypicalaffordablehousingpropertyinSouthernCalifornia
couldincreaseannualcommonareasavingsfrom$11,400withsolar-aloneto$21,700with
solarandstorage,resultinginanannualelectricitybillofabout$300.122
Source:CleanEnergyGroup
TomeetAB693goals,thereareanumberofwaystoensuretenantsdirectlysharein
thesecommonareasavings.Forsomeproperties,moreofthesolarportionoftheintegrated
solarenergysystemcanbeallocatedtodirectlyoffsettenantelectricityconsumptionthan
wouldbefeasiblewithoutstorage,whichisparticularlyimportantformulti-storybuildingsand
thoselocatedindenseurbanareas.Otherpropertiesmaychoosetoadoptasharedsavings
model,underwhichtenantsaredirectlyallocatedaportionofthecommonareademand
chargesavings.Theseandothermeasurescanbedevelopedwithinputfromaffordable
housingpropertyownerrepresentativesandorganizationsrepresentingtheinterestsoflowincometenants.Inanycase,onceestablished,thisprogramshouldestablishclearmetricsthat
wouldleadtotheadoptionofadministrativeapproachestoensureprimarytenantbenefits
throughthesemechanisms.
122
Ofcourse,notallaffordablehousingpropertieswillhavetheloadcharacteristicstoachievethese
savings.Thatisthepointofmakingstorageaneligible,butnotmandatory,componentunderAB693.
Thesearecomplexquestionsthatpropertyownersshouldberesponsibletoexplorebasedontheir
utilitybillsandpropertyneeds.Anyincentiveschemeshouldletthemdevelopthebestcombinationof
technologysolutions–includingenergyefficiency,solarandstorage–creatingthebestbusinesscase
usingavailableAB693incentivesandotheravailablesourcesoffunding,includingfederaltaxcreditsfor
solarandstoragesystems.
81
ShiftingTenantSolarEnergyUnderTime-of-UseRates.
Thesecondavenuefortenantbillreductionaftersharingdemandchargesavings
throughsolarandstorageistakingadvantageofwaystoreducetime-of-use(TOU)rate
impacts.Undervariousstateenergypolicychanges,TOUrateswillsoonbeappliedtoall
Californiaresidentialutilitycustomers.SolarcustomersarealreadybeingtransitionedtoTOU
rates,anddefaultTOUrateswillbeintroducedforallresidentialcustomersin2019,including
CAREcustomers.Asaresult,low-incometenantslivinginaffordablerentalhousingwillhave
theopportunitytodirectlybenefitfromtheincorporationofstoragedevicesthroughtheability
toshifttheconsumptionorexportofsolarenergyfromperiodsoflowelectricitypricingto
periodsofhighelectricitypricing.
Newinformationfromtheabove-referencedreportshowsthatsolartime-shifting
throughaddingstoragecanresultinlowertenantelectricitybillsandmaximizethevalueof
solarsysteminvestments.Thatis,thistime-shiftingandTOUrelatedbillreductionresultsonlyif
storageisaddedtothesolarinstallation.Theseresultsareforanillustrativeaffordablehousing
propertywith75units,andassumestenantsareonacurrentSouthernCaliforniaEdison(SCE)
residentialTOUratetariff.Addingstorageincreasesannualtenantsolarbillsavingsbymore
than$5,000peryear.Theseadditionalsavingsrepresentadirectbenefittotenantsthatwould
notbeavailablewithouttheinclusionofstoragedevices.
Source:Geli/CleanEnergyGroup
Addingstoragetosolarresultsintwoadditionalwaystodeliverbillsavingsunder
currentelectricratetariffsandreducetenantenergyexpensesunderAB693ontopofsavings
fromasolar-onlysystem.First,basedonthenewanalysis,tenantscouldshareinover$10,000
inadditionalutilitybillsavingsfromreducingdemandchargesoncommonarealoads.Second,
82
tenantscouldbenefitdirectlyfromtheadditional$5,000ormoreinsavingsannuallyfrom
addingstoragetoastand-alonesolarsystem.Thus,addingstoragetoanillustrativebuilding
undercurrenttariffscanresultinmorethan$15,000peryearinadditionalsavingsavailableto
sharewithtenantsunderthelaw.Overthelikelylifetimeofsuchprojects,suchadditional
savingscouldtotalover$200,000inelectricbillsavingsthatwouldbeavailabletosharewith
tenantsforthissinglerepresentativeprojectalone–butonlyifstorageisaddedtosolar
systems.
FutureEconomicOpportunitiesforSolarandStorage
Additionalopportunitiesforbillreductionthroughcombinedsolarandstoragewill
becomeincreasinglyimportantasnewpoliciescomeintoplaceinCalifornia.Distributedenergy
resourcemarketopportunities,NEMpolicies,andutilityratetariffswillallevolveoverthe
lifetimeoftheimplementedmultiyearprogram.
Toprotecttenantsfromchangesthatcouldnegativelyimpactthevaluepropositionof
solarandincludetheminCalifornia’senergytransition,AB693shouldbegearedtoleaveevery
pathwayopentoprovidingvaluetolow-incomecustomers.
Toassessthatfuturescenarioandhowstoragecouldmitigateagainstharmtolow-
incometenants,itisimportanttolookattheeconomicanalysisofpotentialtenantelectricbill
savingsenabledbystorageunderexpectedfuturesolarpolicyscenarios.Theanalysisbelowis
basedonpilotedfutureTOUratesproposedbySCE,wherepeakperiodshaveshiftedtolaterin
thedaywhensolarPVisnotgeneratingelectricity.Addingstorageincreasesannualtenantbill
savingsbynearly10percent,resultinginanadditional$12,600indirecttenantsavingsper
year.
83
Source:Geli/CleanEnergyGroup
Addingthistothe$10,400insavingsachievedthroughdemandchargereduction,an
affordablerentalhousingpropertywith75unitsinsouthernCaliforniawouldrealizean
additional$23,000inannualsavings,representingover$300insavingsperuniteachyearthat
wouldnotbeavailablewithoutstorage.Underthispredictedfuturescenario,storagewould
addover$300,000inelectricbillsavingstoasolarinstallationovertheprojectedlifetimeofthe
project.
Theseeconomicjustificationsdonotimplythatenergystorageisrightforallmultifamily
affordablehousingproperties.Incaseswheresimilarutilitytariffsandotherconditionsapply,
combiningstoragewithsolarresultsinmoreeconomicsavingsavailabletoaffordablehousing
propertiesunderAB693thansimplyprovidingincentivestostand-alonesolar.
Aswithsolar-onlysystems,solarenergysystemsincorporatingstorageshouldbe
implementedinawaythatensuresthesystemprimarilybenefitsaffordablehousingtenants.
Accordingly,thedecisiononwhethertoincorporatestoragewithsolarshouldbelefttothe
affordablehousingpropertyownersandtheirconstituencies,dependingonwhatmakes
economicsensetofulfilltheirhousingmissionandprovidetenantbenefitswiththeincentive
supportunderAB693.
EnergyStorageIncentives
Storagedevices,whileanintegralpartofmanysolarenergysystems,areavery
differenttypeoftechnologythansolar,withuniquecapabilitiesandseparatecosttrajectories.
Duetothesedifferences,aseparateincentivestructureshouldbeadoptedforthestorage
portionofasolarenergysystem.However,inclusionofastoragedeviceinasolarenergy
84
systemshouldnotaltertheproposedincentivestructureforthesolarportionoftheproject.
Werecommendthatthefollowingincentivestructureforsolarenergysystemsthatinclude
storagedevices:
§ SolarIncentive.IncentivesforsolarPVpanelsandbalance-of-systemcomponents,
excludingstoragedevices,shouldremainattheproposedincentivelevelforasolar
energysystemregardlessoftheinclusionofstorage.Instead,werecommendofferinga
separateincentiveforstorage(seebelow).
§ StorageIncentivewithModifiedStepdown.Thereshouldbeaseparateincentive
structuredefinedspecificallytoapplytothestorageportionofasolarenergysystem.A
goodbasisforsettingtheinitialincentivelevelforstoragedevicescanbefoundinthe
recentCPUCproposeddecisionrevisingtheSGIP.123Thedecisionproposestheadoption
ofincentivesforadvancedenergystoragetechnologiesataninitiallevelof$0.50per
watt-hourforstoragesystemsgreaterthan10kilowattsand$0.60perwatt-hourfor
systemsof10kilowattsorsmaller,withafoursubsequentstepsreducingtheincentive
by$0.05perwatt-hourateachstep.Settingthesamestorageincentivestructurefor
storagedevicesunderAB693shouldcatalyzeinvestmentinstoragetechnologies
withoutoverlysubsidizingthetechnology.
Whileitmakessensetobasethestoragedeviceincentiveonthestructuredefinedin
theSGIPdecision,thestepdowninincentivelevelsshouldnotnecessarilyfollowthe
sametimeline.Likesolar,storagedevelopmentfortheaffordablehousingsector,which
ismorecomplexmarketduetocomplicatedfinancingstructuresandsplitincentives,
requiresaslowerdeclineinincentivelevelsthanforthelargerCaliforniamarket.The
storageincentivelevelshouldbeperiodicallyreviewedbytheprogramadministrator
andadjustedasnecessary.
• CapforSolarEnergySystemIncentive.Thetotalsolarenergysystemincentiveavailable
underAB693,inclusiveofbothsolarandstorageincentives,foranyprojectshouldnot
exceed100percentoftheinstalledsystemcost,adjustedforothersourcesoffunding,
forportionsofthesystemprovidingeconomicbenefitstotenantsandshouldnot
exceed70percentoftheinstalledsystemcost,adjustedforothersourcesoffunding,
forportionsofthesystemprovidingeconomicbenefitstocommonareas.
123
CaliforniaPublicUtilitiesCommission,“DecisionRevisingtheSelf-GenerationIncentiveProgram
PursuanttoSenateBill861,AssemblyBill1478,andImplementingOtherChanges.”Availableat
http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M162/K005/162005693.PDF.
85
Additionally,boundariesshouldbesetonsystemsizingtoensuretheincentivestructure
promotesdeploymentofstoragesystemsdesignedtooptimizeeconomicreturnforboth
commonareaandtenantloads.Eachstoragesystemwouldhavetwosizingconstraints:Power
(kilowatts)andDuration(hours).
§ Power.Forcommonarealoads,theprimaryeconomicopportunityforstorageis
currentlythroughpeakdemandreduction.Becauseofthis,theportionofastorage
devicesizedtotargetcommonarealoadsshouldbelimitedtoaratedpowerofno
greaterthanaproperty’santicipatedpeakdemand.
Fortenants,theprimaryeconomicopportunityforstorageiscurrentlythroughenergy
time-shifting,alsoknownasenergyarbitrage.DuetothegoalofAB693todeliver
tenantbenefitsthroughdeploymentofsolarenergysystems,storagedevicesdesigned
fortenantenergytime-shiftingshouldbelimitedinratedpowertotheratedpower
outputofsolarsystemdeployedfordirecttenantbenefits.Inthisway,thestorage
devicewillbesizedappropriatelytoshiftsolargeneratedenergyaswellashavean
opportunitytotakeadvantageofavailablefederalinvestmenttaxcreditsforsolar
energysystemcomponents.
Astoragedevicedesignedforbothcommonareaandtenantbenefitsshouldhavea
totalpowerratingofnomorethanthecombinedtotalofanticipatedpeakcommon
arealoadandratedpoweroutputofsolardesignatedtodirectlybenefittenants.
§ Duration.BasedonananalysisofnineCaliforniaaffordablehousingproperties,optimal
durationforcommonareapeakdemandreductioninaffordablehousingrangedfrom
1.5hoursto3hours,withanaveragedurationof2.6hours.124
ThisisconsistentwithanalysisbyGelithatwasincludedincommentssubmittedbythe
solarindustrygroupCALSEIAregardingtheMay16th,2016CPUCproposeddecisionto
reviseSGIP.125Thefigurebelow,whichwasincludedinCALSEIA’scommentstothe
CPUC,illustratesthatthevalueofdemandchargemitigationbeginstodropoffatthe2hourdurationpointandsignificantlydeclinesafter4hours.
124
CaliforniaHousingPartnership,CenterforSustainableEnergy,CleanEnergyGroup,andGeli,“Closing
theCaliforniaCleanEnergyDivide:ReducingElectricBillsinAffordableMultifamilyRentalHousingwith
Solar+Storage.”Availableathttp://www.cleanegroup.org/ceg-resources/resource/closing-the-californiaclean-energy-divide/.
125
CaliforniaSolarEnergyIndustriesAssociation,"CommentsoftheCaliforniaSolarEnergyIndustries
AssociationontheProposedDecisiononReformstotheSelf-GenerationIncentiveProgram."Available
athttp://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M163/K152/163152824.PDF
86
Source:CaliforniaSolarEnergyIndustriesAssociation,Geli
AnanalysisbyGeliofthevaluepropositionforstoragedevicesperformingresidential
energytime-shiftingcametoasimilarconclusion.Thefigurebelowshowstheenergyarbitrage
valuepropositionofa120kWstoragedeviceshiftingsolarenergytoimpactaffordablehousing
tenantloadsunderapredictedfutureSouthernCaliforniaEdisonTOUratetariff.Atabout300
kWh,orastoragedurationof2.5hours,thevalueindollarsperkilowatthourbeginstodecline
morerapidlyandsavingsbegintoleveloff.Asimilarinflectionpointwasfoundfortenants
underPG&EandSDG&ETOUratetariffs.
87
Figure2.GeliAnalysisofEnergyStorageSavings(ESS)
Sizevs.Savings
Source:Geli,CleanEnergyGroup
Basedontheseresults,itisrecommendedthatstoragedevicedurationincentivized
underimplementationofAB693belimitedtonomorethan3hours.Sothat,forexample,a
storagedevicewithapowerratingof100kWbelimitedtoacapacityofnomorethan300
kWh.Thesepoweranddurationconstraintsshouldallowforoptimalsystemdesign,while
discouraginguneconomicoversizingofstoragedevices.
88
XII.
ProgramAdministrativeStructure126
AB693requirestheCommissiontoputinplaceanappropriateadministrativestructure
toimplementtheMultifamilySolarRoofsProgram.Todeterminewhatadministrativestructure
ismostappropriate,AB693directsthat:
Thecommissionshallconsiderthemostappropriateprogramadministrationstructure,
includingadministrationbyaqualifiedthird-partyadministrator,selectedbythe
commissionthroughacompetitivebiddingprocess,oradministrationbyanelectrical
corporation,inanexistingorfutureproceeding.127
Thedecisiononwhethertoselectathird-partyadministratororadministrationbyan
electricalcorporationshouldtakeintoconsiderationanumberoffactors,includingthose
describedbelow.
AlignmentofMission
Theadministrativestructuremustbecompatiblewith,andcapableofdirecting,a
markettransformationthroughthedeliveryofacomprehensivemenuofenergyservicesand
investmentsthatareprovidedinamannerbothresponsiveandsensitivetotheenergyneeds
ofpropertyownersandlow-incomerenters.Toaccomplishthis,theremustbeaseamless
alignmentbetweenthemissionoftheProgramAdministratorandthemissionofthe
organizationsowningandoperatingtheaffordablehousing,theorganizationsrepresentingthe
interestsofthelow-incometenantsresidingattheseproperties,andotherstakeholdersofthe
program.
CapacitytoProvideAdministrativeSupporttoMeetAllRequirements
AsdiscussedinSection2ofthisJointProposal,theProgramAdministratorwillbe
requiredtocarryoutanumberoftechnicalandsupportfunctionsthatwerenotconducted
underMASHandthatareuniquetotheMultifamilySolarRoofsProgram.Theseinclude:
126
Questions10,17,24and25oftheALJ’sJuly8,2016Rulingarecoveredinthissection.
127Cal.Pub.Util.Code§2870(d).
89
i. Ensurethattheprogramincentivesarealignedwithprogramcostsandaccountfor
leveragedresourcessothat“noindividualinstallationreceivesincentivesatarate
greaterthan100percentofthetotalsysteminstallationcosts.”128
ii. Ensurecompliancewithgeographicdiversityrequirements.129
iii. Provideoutreachandtechnicalassistanceindisadvantagedandunderserved
communitiestoaddressbarrierstoaccessingrenewableenergy.
iv. EnsurecompliancewithrequirementsthatPVgenerationisprimarilyallocatedto
tenantsandthatutilitytariffsprovideadirecteconomicbenefittotenants.130
v. Monitorandensurecompliancewithlocalhiring.131
vi. Providetechnicalsupportandfacilitate“one-stop”accesstoutilityenergy
efficiencyprogramresourcestoimplementenergyefficiencyrequirements.132
vii. Developprotocolsandverifycompliancewithsystemperformanceandoperation
andmaintenancerequirements.133
viii. Conductanalysisandmarketdemandassessments.134
ThepreviousIOUadministrativemodeldevelopedforprogramssuchasMASHisnotsufficient
tomeetthedemandsandchallengesofaprogramascomplexasAB693andtheneedsofa
housingmarketthattodatehasbeenlargelyunderservedbyratepayerenergyprograms.In
particulartheMASHIOUmodelwouldbestructurallyunabletoensurecompliancewith
geographicdiversityrequirementsanditwouldlacktheefficienciesandcapacitytoperform
mostoftheotherkeytaskslistedabove.
AdministrativeEfficiency,Consistency,andFlexibility
Requiringmultipleadministrativestaffs,andreplicatingadministrativeprocesses,
marketingplans,localhiringplans,andcomplianceprotocolsmultipletimes,foreachelectrical
corporation,wouldundulyaddtoadministrativecost.Sincemanyofadministrativesupport
functionsarefixedcost,astructurewithmultipleadministratorswillpresentdifficultiesand
constraintswithinthebudgetlimitssetfortheprogram.Suchbudgetconstraintscould
128
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(4)an(5).
AB693.Section1(e).
130
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(2)and(g)(2)
131
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(f)(6)
132
133
134
AB693amendmentstoPUC.Part2ofDivision1ofthePUC,Section2870(j)(1)and(2).
129
90
adverselyaffectthedeliveryofsupportortechnicalservicestoprogramstakeholdersto
addressbarriersandbuildcapacitytoimplementenergyefficiencyimprovementandinstall
solarenergysystems.
Multipleadministrators,eachwiththeirownstaffsandadministrativeprocesses,would
addcomplexityandadministrativeburdensforpropertyowners,whowouldhavetoaccessthe
programatmultiplepoints,navigateslightlydifferentimplementationprotocolsandpractices,
andrespondtorequeststomultipleadministratorstoimplementtheirprojects.Focusgroups
ofpropertyownersconductedbyCoalitionmembershaveshownconclusivelythatthese
inefficienciesandburdenswouldhaveachillingeffectonparticipationratesbytheseproperty
ownersanddoomtheProgramtofailure.Multipleprogramadministratorswouldalso
contributetodifferencesinthelevelandqualityofservicesprovidedtosupporttheprogram.
Unevenoutreachortechnicalsupportmightalsoresult,andadverselyaffectprogram
participationandcompliancewithgeographicdiversityrequirementsordelayimplementation.
Propertyownersrequirecertainty,consistency,andsimplicityintheadministrationof
programs,especiallyoneascomplexastheMultifamilySolarRoofProgram,tosecuretheir
participation.
Insummary,thescopeandcomplexityofAB693requiresasinglepointofentryandthe
coordinateddeliveryofadministrativesupportandtechnicalservicesinsteadofreplicating
administrativeprocessesmultipletimes.
NeedforSingle,StatewideAdministrator
TheNonprofitSolarStakeholdersCoalitionrecommendsandproposesthatathird-party
statewideProgramAdministratorbeselectedtoadministertheMultifamilySolarRoofs
Program.Thereareseveralkeybenefitstothisadministrativestructurethatwouldresultina
moresuccessfulprogramandprovidethemaximumbenefitstolow-incometenantsthan
traditionalIOUadministrativestructures.
91
First,IOUshavenotachieveddesiredlevelsofpenetrationforotherlow-income
programssuchastheCAREandEnergySavingsAssistancePrograms(ESAP).135Inthisregard,
considerableeffortshavebeenmadetoexpandenergyefficiencyservicesformultifamily
affordablehousingpropertiesundertheESAP.Theseeffortshavebeenlargelythwartedinthe
Commission’sproceeding,contributingtolowerprogramparticipationbyrentersand
multifamilypropertyowners.
Asevidence,theCoalitionpointstothegeneralenergyefficiencyproceeding,wherethe
problemstatementsprovidedbyPG&E,SDG&E,andSCEfortheirbusinessplanshavelargely
concludedthatmultifamilypropertiesare“hardtoreach”andare“limitedintheirefficiency
improvementopportunities”becauseof“splitincentive”issuesandthat“onlyasubsethave
highpotentialforenergyefficiencysavings.”IOUProgramAdministratorshavealsosuggested
thatmultifamilyenergyefficiencyprogramshavelowparticipationbecauseoflowratesof
return.SCEobservedthat“energyefficiencyisarelativelylowpriorityformultifamilyproperty
owners,likeallbusinesses,theyhavemanydemandsontheirresources.”
Thesegeneralizationsarenotapplicabletoallsegmentsofthemultifamilymarket.
Somesegmentsofthemultifamilymarkethavebeenengagedinenergyefficiencystrategies
andsegmentsofaffordablehousingmarketsincludeplanningandhousingqualityrequirements
thattargetenergyefficiencyimprovements,subjecttotheavailabilityoffunding.Such
misunderstandingsaboutmultifamilyhousingmarketsultimatelyunderminedtheeffectiveness
ofratepayerprogramswithrespecttothismarketsegment.
Incontrast,theLIWPLargeMultifamilyprogram,fundedbyCapandTradeallocations,
offersamodelofasuccessfulstatewide,third-partyadministeredprogramthat,unlikeIOU
programs,providesaone-stopdeliverymechanismintegratingsupportandtechnicalservices
andenergyfundingresourcestofacilitatecombinedenergyefficiencyandsolarimprovements.
Thisprogram,launchedin2016,hasbeensuccessfulinrecruitingmultifamilypropertyowners
inundertakingcomprehensiveenergyimprovementsandhasevencometotheaidofMASH
projectsthathavebeenstalledbecauseofaninabilitytocovercostsforresidentialinstallation.
135
See CPUC, Low-income Oversight Board, Draft Meeting Minutes, pp. 7-8 (Feb. 23, 2016), available
at http://www.liob.org/meetings.aspx.
92
TheLIWPLargeMultifamilydemonstrateshowstatewidethird-partymanagedand
administeredprogramscanintroducenewserviceconceptsandcomprehensivesolutionsfor
servingmultifamilymarkets,notpossiblewithintraditionalIOUbusinessmodels.
TransferableAdministrativeRequirementsandProcesses
Anumberofcoreadministrativeprocessesrequirementsmustbedevelopedto
implementtheprogram.Forexample,therearesomefeaturesoftheMASHprogramthatare
readilytransferableandusefultotheimplementationofAB693.Theseincludestatelicensing
requirementsforsolarcontractors,PVequipmenteligibility,warrantyandsystemperformance
requirements,andinspectionrequirements.
Non-TransferableAdministrativeRequirements
TherearealsoanumberofrequirementsfromtheMASHprogramthatarenot
transferableandshouldbesubstantiallyrevisedundertheMultifamilySolarRoofsProgram.
Theseinclude:
ApplicationandReservationProcess:TheMASHapplicationandreservationhas
contributedtoseveralundesirableoutcomes.Programreservationshavebeen
monopolizedbyarelativelysmallgroupofsolarcontractors.Thesepracticesareevident
bytheshorttimeperiodinwhichIOUsopeneduptheirwaitliststoacceptnew
applications.Whenwaitlistswereopened,thesesolarprovidersmademass
reservations,insomecasesenrollingmultiplepropertieswithinahousingorganization’s
portfolio.Thecurrentadministrationofthisprocessalsopermittedpropertiesonawait
listtobesubstitutedwithotherpropertiesownedbythesamehousingorganizationifit
wasdecidedthattheproposedsolarprojectwasnotviable.Thisloopholeencouraged
solarproviderstoover-enrollandoversizepropertiesatthefrontenduntilproject
interestorviabilitywasactuallydetermined.Theresultofthesepracticeswasthe
exclusionofothermultifamilypropertyownersfromapplyingforandparticipatingin
theprogram.
Toaddressthisproblem,theCoalitionrecommendsthefollowingcorrectiveactionsare
§
necessary:
i. Discontinuethepracticeofallowingsolarcompaniestoenrollmultipleproperties
forapropertyowneratonetime.
ii. Requirethatmultifamilypropertyownersmakedirectprojectapplications.
93
§
§
§
§
iii. Establishaprocesstophaseapplicationapprovalsonaquarterlybasis
iv. Setalimitonprojectreservationsthatahousingapplicantcanreceiveduringa
quarter
v. Providepropertyownerswithconditional(60day)reservationstopermithousing
organizationstoobtaincompetitivebidsfrommultiplesolarcontractorsbefore
lockinginreservations
ReservationPeriod:ForprojectswithLIHTCfunding,thereservationperiodmustbe
extendedto36months,consistentwiththerequirementsintheNewSolarHome
Partnershipprogram,tofitwiththeprojectdevelopmentcyclefortheseprojects.
EnergyEfficiency:TheMASHenergyefficiencyrequirementsshouldnotbeadoptedfor
theMultifamilySolarRoofsProgram.Theenergyefficiencyrequirementsproposedin
SectionXshouldbeadopted.
IncentiveLimitations:AB693specifiesadditionalincentivelimitationrequirementsthat
mustbeaddressed.
PaymentDesignation:PaymentunderAB693shouldbemadedirectlytotheproperty
owner,notthesolarinstaller,toensureprojectaccountability.
NewRequirementsandProcesses
Thereareanumberofnewareasthatshouldbeaddressedintheadministrativeguidelinesfor
theMultifamilySolarRoofsProgram,including:
§
§
§
§
ConsumerProtections:Additionalconsumerprotectionarenecessarytoensurethat
propertyownersandtenantshaveaccurateandreliableinformationconcerningthe
solarsystem,systemcosts,energysavingsbenefits,operationsandmaintenancecost,
andassumptionsusedtoprojectout-yearenergysavingsandcosts.
OperationandMaintenance:Guidanceisneededtoaddresssystemmonitoringand
O&MrequirementsforTPOinstalledsystems.
PerformanceGuarantees:Guidanceisneededtoaddresssystem
performance/productionguaranteerequirementsforTPOinstalledsystems.
EnergyStorage:Guidanceisneededonenergystorageequipmentstandardsand
protocols.
DataandReporting
GreatertransparencyshouldbeprovidedfortheMultifamilySolarRoofsProgramthan
wasprovidedfortheMASHprogram.Forthepublictoreviewtheperformanceandoutcomes
oftheprogram,agreaterlevelofinformationontheparticipatingpropertiesandinstalledsolar
energysystemsisneeded.
§
ProjectDataElements:Dataelementsavailabletothepublicshouldinclude:
i. Propertynameandaddress
ii. Numberofresidentialunits
iii. PropertyType(LIHTC,HUD-assisted,PHA,USDA-RD)
94
iv.
v.
vi.
vii.
viii.
ix.
Propertyelectricityuse(aggregatedpre-solarbaseline
Solarenergysystemownership(Property,TPO)
Solarenergysystemincentives(residents,commonarea)
Solarenergysystemdetails(PV/storagesize,costs,panels,inverters,contractor)
Solarenergysystemallocation(residents,commonarea)
Solarenergysystemfinancialprojections(estimatedenergysavingsforresidents,
commonarea)
x. Dateinstalled
xi. Energyefficiencyreductionestimate/goalforproperty
§ GeographicDataElements(byCensusTract)
i. Solarsystemsinstalled,underreservations,pendingapplications
ii. Solarcapacityinstalled,underreservations,pendingapplications
iii. Low-incomerentersreceivingsolarbenefits
iv. CAREeligiblecustomersreachedbyprogram
v. PVgenerationallocatedtooffsettenantusage
vi. Numberoflocalhiresfromsolarprojects.
vii. GHGemissionreductions.
§
DataDisclosureandTransparency:TheCommissionshouldrevisepoliciesconcerning
thedisclosureofprograminformationonmultifamilypropertiesreceivingincentives
undertheMultifamilySolarRoofsProgram.
UndertheMASHprogram,informationaboutprojectapplications,propertynamesand
addresseswerenotmadeavailableintheCaliforniaSolarInitiativepublicdatabase.
Additionally,staffhasdeniedrequestforthisinformationfromnonprofit,public
advocacyorganizations.Thelackoftransparencyhashamperedeffortsbyorganizations
toevaluatetheprogramsusebyhousingorganizations,tenantcoverageofinstalled
systems,andtheamountofMASHinstallationswithinDACandotherunderserved
communities.
Moreover,thereisnoapparentpolicyrationalthatwouldpreventthereleaseofthis
information.Affordablemultifamilyrentalpropertiesreceivinghousingfinancial
assistanceandsubjecttodeedrestrictionsandregulatoryagreements,suchasthose
propertiesfundedbyMASH,arealreadyincludedinpublicdatabases.Thesedatabases
includeinformationonpropertyname,address,andtypeofpubicassistancereceived
bytheproperty.
WerecommendthatthesameleveloftransparencybeprovidedfortheMultifamily
SolarProgram.
95
SafetyIssue
TheALJhasrequestedcommentsonwhatsafetyissuesshouldbeconsideredinthe
implementationoftheprogram,andwhoshouldberesponsibleformeetinganysafety
requirements.Thecentralsafetyissuesaffectingprogramimplementationconcernthe
installationofthesolarenergysystemsandtheongoingoperationandmaintenanceofthe
installedequipment.
Withregardstoinstallation,mattersofsiteandworkersafetyshouldbethe
responsibilityofthesolarcontractor.Moreover,theinstalledsystemshouldbefreefromdefect
thatwouldposesafetyriskstothetenantsorpropertyowners.Theseresponsibilitiesare,and
shouldbe,delineatedinwrittenagreementsbetweenthesolarcompanyandtheproperty
owner.Furthermore,thesolarcontractorshouldprovideemployeeswithappropriateworker
safetytrainingandhaveappropriateliabilityandworkerscompensationinsuranceintheevent
ofanaccident.
Withregardstotheongoingoperationsofthesolarsystems,theoperationofthe
equipmentisgenerallytheresponsibilityoftheownerofthesolarenergysystem.Accordingly,
ifthesolarenergysystemisownedbyathird-partyowner,theresponsibilityforensuringthat
thesystem’soperationsissafeandposesnorisktothetenantslieswiththethirdpartyowner.
Inthisregard,thethird-partyownershouldbeexpectedtohaveappropriateliabilityand
propertyinsurance.
96
XIII.
Conclusion.
AB693presentsanunprecedentedopportunityforCaliforniatodelivera
comprehensiveandintegratedenergystrategythatmateriallyadvancesCalifornia’senergy
policiesandgoalsacrossamarketsegmentthatisoftenunderservedbyexistingenergy
programs.ThroughthestructureandelementspresentedintheJointProposal,theCPUCcan
realizethetwingoalstheLegislatureclearlycommunicatedinpassingAB693:tohelplowincomehouseholdsresidinginaffordablemultifamilyhousingrealizesavingsontheirelectric
bills,savingsthatcouldmeannothavingtochoosebetweenheatandfoodonthetable,while
alsofurtheringthestate’sgreenhousegasreductiongoals.
TheJointProposalaccomplishesthetwingoalsofAB693bydevelopingincentive
structuresthatdirectlybenefitlow-incometenantswhileadequatelyincentivizingbuilding
ownerstoparticipate,creatingeffectiveenergyefficiencyrequirements,andreducingpeak
demandwithsolarplusstorage.TheJointProposalalsoprovidesaframeworkforachieving
morerobustjobplacementrequirementstoachievelong-termandgoodpayingjobsfor
residentsoflow-incomeanddisadvantagedcommunitiesandtargetsdisadvantagedworkers
andcommunitiesmostinneedofeconomicdevelopmentopportunities.Theprogramdesign
alsocreatesamoreequitablesolutionforprojectdistributionbyeliminatingthefirst-come,
first-serveapproachunderMASHandproposescriteriaforachievingequitableinvestmentsin
low-incomeanddisadvantagedcommunities.Mostimportantly,theJointProposal
recommendsthattheCommissionengageasinglethird-partystatewideprogramadministrator
toachievegreaterefficiency,consistency,andmoretargetedoutreachtothecomplicatedand
significantlyunderservedaffordablehousingmarketsegment.
IndevelopingtheJointProposal,themembersoftheNonprofitSolarStakeholder
Coalitionandourconstituentshavebeenstronglyinfluencedbyadesirenottoreplicatepast
failuresorignoreopportunitiestoleveragesuccesses.Wehave,intheend,soughttoarticulate
97
aframeworkcapableofaddressingthelong-termenergyneedsofourstate’smostvulnerable
householdsandcommunitiesconsistentwiththemandatesofAB693.
TheJointPartiesurgetheCommissiontoadopttheprogramdesignpresentedinthe
JointProposaltoensurethatlow-incomerentersandthecommunitiestheyresideinhave
accesstoafullrangeofsolutionsthattheirenergyfuturedependson.
Respectfullysubmittedthis3rddayofAugust2016,SanFranciscoCalifornia.
By: /s/WayneW.Waite
WayneW.Waite,PolicyDirector
CaliforniaHousingPartnership
/s/EddieH.Ahn
EddieH.Ahn,ExecutiveDirector
BrightlineDefenseProject
/s/ShanaLazerow
ShanaLazerow,AttorneyforCEJA
CommunitiesforaBetterEnvironment
/s/TovahTrimming
TovahTrimming,AttorneyforCEJA
EnvironmentalLaw&JusticeClinic
GoldenGateUniversitySchoolofLaw
/s/PeterMiller
PeterMiller,SeniorScientistforNational
ResourceDefenseCouncil
/s/JimGrow
JimGrow,AttorneyforNationalHousingLaw
Project
98
Rulemaking14-07-002
PROPOSALFORTHEIMPLEMENTATIONOFAB693
APPENDICES
NonprofitSolarCoalition
JointSubmission
August3,2016
A.
B.
C.
D.
E.
F.
G.
APPENDICES
AB693BriefingMaterials
ListofEligibleLIHTCProperties
ListofHUD-AssistedProperties
SolarPVCostsEstimates
AB693IncentiveStructure–BackupAnalysis
CPUCAnalysisofAB693
EnergyStorageLegalAnalysis
99

our joint proposal - California Housing Partnership

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