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Local Demand Is Helping California Surpass Renewable Energy Targets UCLA study shows 30% of residents now can choose cleaner power from community choice aggregators

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By Michelle Einstein

In California, local demand for renewable energy is helping the state exceed its clean energy goals, according to a new UCLA study.

Research by the UCLA Luskin Center for Innovation shows the growing impact of community choice aggregators, or CCAs, on energy procurement and illustrates the effects cleaner energy providers are having on the state’s power supply.

Community choice aggregators buy clean energy on behalf of their residents and businesses, offering an alternative to investor-owned utilities and enabling localities to take control of their energy procurement. The CCA serving much of the Los Angeles region is Clean Power Alliance, which provides energy to customers in 31 cities and counties, including Alhambra, Culver City, Downey and Santa Monica.

“Community choice in energy has largely fallen under the radar, but it is rapidly reshaping the energy sector in California,” said Kelly Trumbull, a researcher at the Center for Innovation and lead author of the report (PDF).

According to the report, the use of community choice energy has grown quickly in the state. More than 30% of California households and businesses — more than 10 million customers — now have the option to choose a CCA as their electricity provider, up from less than 1% in 2010.

The vast majority of these energy providers offer more energy that derives from renewable sources. In all, the energy delivered by CCAs comes from renewable sources by an average of 25 percentage points more than energy from investor-owned utilities in the same regions. CCAs purchased twice as much renewable energy as required by the state from 2011 to 2019, researchers found.

That has helped the state achieve a cumulatively larger reduction in greenhouse gas emissions each year. The clean energy goals, established by the state’s Renewables Portfolio Standard, stipulate that 100% of the state’s energy be carbon-free by 2045. An interim target was set at 25% renewable energy until 2019. According to the report, a weighted average of 50% of the CCAs’ energy came from renewable sources that year.

The trend toward cleaner energy providers has also benefited residents by providing cheaper electricity: 73% of communities that offer community choice do so at a lower default rate than their investor-owned counterparts, the study found. And the CCAs often provide additional environmental and economic benefits, including financial assistance programs for low-income residents and incentives for electric transportation.

The authors write that the community choice aggregator model could be replicated in a variety of communities across the nation.

“We found that in California, CCAs successfully serve a wide variety of communities with ranging sizes, median incomes and political affiliations,” Trumbull said. “This suggests that CCAs could be implemented throughout the country.”

Nine states currently allow for a community choice approach, and interest is growing. Among the study’s takeaways from the California model:

  •  CCAs are most effective in communities where the demand for carbon-free energy exceeds what is currently provided.
  •  Partnerships among multiple cities and counties give CCAs an economy-of-scale advantage by keeping operating costs low.
  •  State policy and regulation play a critical role in the success of the community choice approach, starting with the fact that California needed to enact legislation to allow for CCAs to exist.

The research, which was supported by the Rockefeller Brothers Fund, adds to the Luskin Center for Innovation’s large body of research on community choice electricity and renewable energy.

A New Tool to Help Plan for Expected Growth in Electric Vehicles Luskin Center’s Plug-in Electric Vehicle Readiness Atlas informs investments, policies and plans to meet consumer demand

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More than 82,000 electric vehicles were registered in Southern California between 2011 and 2015. The number of new plug-in electric vehicles registered there during 2015 increased a whopping 992 percent from 2011.

Now, a report produced by the UCLA Luskin Center for Innovation forecasts continued exponential growth in the electric vehicle market, with more than 700,000 plug-in electric vehicles expected to hit Southern California roads by the end of 2025.

This forecast assumes that over time more residents of apartments and other multi-unit dwellings will be able to charge at home. The report, the Southern California Plug-In Electric Vehicle Readiness Atlas, can help make that happen, according to J.R. DeShazo, director of the Luskin Center for Innovation.

“We wanted to provide a tool that decision-makers can use to accommodate forecasted consumer demand for electric vehicles and charging infrastructure,” DeShazo said. For example, the atlas provides planners with critical spatial information for meeting charging demand in multi-unit residences and other places. It can also help utilities identify where utility upgrades may be needed to accommodate additional electricity loads.

The atlas documents the concentration of plug-in electric vehicles (PEVs) in a given neighborhood, visualizes how that concentration varies over the course of a day, and projects PEV growth over the next 10 years for each of the 15 sub-regional councils of government within Southern California.

With support from the Southern California Association of Governments (SCAG) and the California Energy Commission, the 2017 atlas is an update to the first Southern California PEV Readiness Plan and Atlas created by the Luskin Center for Innovation in 2013. Recognizing that the plug-in electric vehicle market has changed considerably in the last five years, the updated atlas helps decision-makers plan for future changes.

“Like the region’s first PEV plan and atlas, the 2017 update can help open people’s eyes to the promises and challenges posed by electric charging stations,” said Marco Anderson, a senior regional planner with SCAG. As a liaison to cities in the region, he has seen how many cities used the first atlas to find local partners for charging station sites.

The new maps include the following spatial information:

  • the locations and sizes of workplaces, multiunit residences and retail establishments that could potentially host PEV charging
  • the locations of existing charging infrastructure, including the number of charging units/cords and level of service
  • and the locations of publicly accessible parking facilities to fill in gaps in PEV charging, particularly in older urban cores.

 

Unlocking Millions of Dollars in State Incentives for Solar Power New research by GRID Alternatives and UCLA Luskin Center for Innovation quantifies the opportunities and potential benefits of solar power on affordable housing units in L.A. County

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By Colleen Callahan MA UP ’10

Karina Guzman is both property manager and resident of a low-income housing complex for working families in Southern California. Even with the job and relatively affordable rent, Guzman worries about paying her electricity bills. But relief is coming from what she found to be a surprising source: solar panels recently installed on 17 of the 27 buildings in her complex.

The solar panel system will offset the cost of powering lights and other needs in common areas as well as help residents lower their electricity bills. “I can’t wait for the solar panel to help me pay a credit card bill, and maybe even save for a vacation,” Guzman said.

Low-income households typically spend higher percentages of their incomes on energy costs and thus stand to benefit most from utility bill savings due to solar power generated on their homes. Yet, while Los Angeles County is a national leader in the adoption of residential solar, the homes of low-income households account for less than 1 percent of residential solar capacity across the county, according to new research by the UCLA Luskin Center for Innovation and the nonprofit organization GRID Alternatives. This may change.

The study found that cities in Los Angeles County could soon unlock millions of dollars annually in state incentives for residential solar on affordable housing.

Starting in 2018, California will offer a solar rebate program targeted at putting solar panels on the roofs of affordable housing developments. With an annual budget of up to $100 million, the Solar on Multifamily Affordable Housing program “could make a big difference toward reversing the current inequity in the distribution of residential solar systems,” said Michael Kadish, executive director of GRID Alternatives Los Angeles, which makes renewable energy technology and job training accessible to underserved communities.

The program, along with smaller existing state solar rebate programs such as the Low-Income Weatherization Program available for large multifamily residences located in disadvantaged communities across the state, will encourage the installation of solar systems that help affordable housing residents’ reduce their utility bills.

But there is a catch.

Residents of affordable housing and other multifamily dwellings can only take advantage of state solar incentive programs if their utility offers a virtual net metering policy allowing residents to receive credits from the system. Virtual net metering is a common billing mechanism that allows multiple parties to share the financial benefits of a single solar power system.

Southern California Edison offers virtual net metering, but that’s not the case with municipally owned utilities in cities such as Los Angeles, Burbank, Glendale and others in the county. Without virtual net metering, there is no real mechanism for residents of multifamily dwellings, including affordable housing, to access the financial benefits of solar.

“Now is a good time for the City of Los Angeles ― which we identified as having the largest share of rooftop solar potential (62 megawatts) and rebate-eligible rooftop solar potential in the region ― to consider removing the policy barrier that is currently preventing myriad residents of multifamily dwellings from realizing the benefits of residential solar,” said J.R. DeShazo, director of the UCLA Luskin Center for Innovation and chair of UCLA Public Policy.

Researchers calculated the potential of 115 MW of rooftop solar power throughout Los Angeles County on the more than 1,100 affordable housing properties that would qualify for a solar rebate. Researchers quantified the potential benefits if this physical capacity for solar on affordable housing was realized in Los Angeles County:

  • $11.6 million annually in utility bill savings for affordable housing residents
  • $4.9 million annually in savings for affordable housing property owners
  • $220.6 million in funding from state programs to spur local economic development
  • 1,800 job years (one year of full-time work or the equivalent) created
  • More than 3,800 job training opportunities and nearly 31,000 job training hours that can be strategically targeted to encourage an equitable clean energy workforce

The report includes recommendations for designing a virtual net metering tariff in Los Angeles to help maximize these types of benefits. Findings also highlight the opportunity to target solar workforce development benefits to residents of affordable housing who are more likely to live in communities with higher unemployment rates than the county at large.

The report can be found online.

 

Mayor Villaraigosa Announces L.A. Solar Energy Incentive Plan Based on UCLA Luskin Research

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J.R. DeShazo, the director UCLA’s Luskin Center for Innovation, has long studied how governments can promote and help implement environmentally friendly energy policies. Now, his recent research on solar energy incentive programs, conducted with Luskin Center research project manager Ryan Matulka and other colleagues at UCLA, has become the basis for a new energy policy introduced by the city of Los Angeles.

On Monday, March 15, Los Angeles Mayor Antonio Villaraigosa announced an ambitious program to move the city’s energy grid toward renewable energy sources over the next decade. Included in the plan is a provision — based in large part on the Luskin Center research — for a “feed-in tariff,” which would encourage residents to install solar energy systems that are connected to the city’s power grid. The overall plan would require ratepayers to pay 2.7 cents more per kilowatt hour of electricity consumed, with 0.7 cents of that — a so-called carbon surcharge — going to the city’s Renewable Energy and Efficiency Trust, a lockbox that will specifically fund two types of programs: energy efficiency and the solar power feed-in tariff. Under the feed-in tariff system, homeowners, farmers, cooperatives and businesses in Los Angeles that install solar panels on homes or other properties could sell solar energy to public utility suppliers.

The price paid for this renewable energy would be set at an above-market level that covers the cost of the electricity produced, plus a reasonable profit. “A feed-in tariff initiated in this city has the potential to change the landscape of Los Angeles,” said DeShazo, who is also an associate professor of public policy at the UCLA School of Public Affairs. “If incentivized appropriately, the program could prompt individual property owners and businesses to install solar panels on unused spaces including commercial and industrial rooftops, parking lots, and residential buildings. Our projections show that the end result would be more jobs and a significant move to renewable energy with no net cost burden to the city.”

Feed-in tariffs for solar energy have been implemented in Germany and several other European countries, as well as domestically in cities in Florida and Vermont. The programs have moved these regions to the forefront of clean energy. And while these programs have necessitated slight increases in ratepayers’ monthly electricity bills, they have also generated thousands of new jobs.

The mayor estimated that under the program announced Monday, 18,000 new jobs would be generated over the next 10 years. “For Los Angeles to be the cleanest, greenest city, we need participation from every Angeleno,” Villaraigosa said. “We know that dirty fossil fuels will only become more scarce and more expensive in the years to come. This helps move us toward renewable energy while at the same time creating new jobs.”

The new program had its genesis last year, when Villaraigosa announced a long-term, comprehensive solar plan intended to help meet the city’s future clean energy needs. The plan included a proposal for a solar feed-in tariff program administered by the Los Angeles Department of Water and Power. In September 2009, the Los Angeles Business Council created a Solar Working Group consisting of leaders in the private, environmental and educational sectors in Los Angeles County to investigate the promise of the feed-in tariff for Los Angeles and commissioned the UCLA Luskin Center for Innovation to lead the investigation.

In addition to DeShazo and Matulka, the working group also included Sean Hecht and Cara Horowitz from the UCLA School of Law’s Emmett Center on Climate Change and the Environment. The first phase of their research examined current models operating in Germany, Spain, Canada, Vermont and Florida to propose guidelines for a feed-in tariff design. The second phase looks at the potential participation rates in a large-scale solar feed-in tariff program in Los Angeles and its impact on clean energy in the Los Angeles basin. The Los Angeles Business Council is expected to release the UCLA Luskin Center for Innovation’s complete report on solar energy feed-in tariffs next month. The Luskin Center for Innovation at the UCLA School of Public Affairs unites the intellectual capital of UCLA with forward-looking civic leaders in Los Angeles to address urgent public issues and actively work toward solutions. The center’s current focus in on issues of environmental sustainability.