FREE Thoughts Blog

July 27, 2022

How can U.S. climate action equalize the wealth gap between white and black American families?

Income disparity (Getty Images/Hyejin Kang)

INTRODUCTION

“The racial wealth gap in the United States is shocking, the average wealth of a white American family is $170,000, nearly 10 times that of the average wealth African-American family,” observes Kedra Newsom Reeves, consultant at Boston Consulting Group. Climate change impacts are posed to tilt that imbalance even further. More than 1 in 2 black families live in areas that are worst hit by the observed and expected impacts climate change in America. Oftentimes, black families also have little access to risk mitigation mechanisms such as insurance for property or personal health to mitigate against climate risks. Consequently, climate disasters are likely to further erode the limited black family wealth even further.

According to official U.S. Census records, the Black American population currently stands at over 15% of the total population but is growing rapidly. It has increased by over 80% since 2010. Over 55% of this population however lives in the America’s Southern states – these are the same regions that have also been worst hit by billion-dollar climate disasters as illustrated below;

Overall, the historical coincidence of high concentrations of black American families within the areas that are hit hardest by climate change disasters presents enormous challenges. However, hidden within those same climate challenges could be important opportunities for the U.S to equalize the elusive wealth gap between its white and black families. But where could these opportunities for equality be at the state and federal levels?

Opportunities to Equalize Wealth through Climate Action:

Abundant opportunities exist at the state and federal levels to equalize wealth, particularly through supporting better education and career outcomes for black families; this is a fail-safe solution. A report by Genesis (2014) estimated that 50% of the jobs we will need in the next 10 years do not exist today; whatever those jobs will be, America will be stronger and more resilient if those jobs incorporate the best and latest climate scientific knowledge and innovation. Therefore, education on climate solutions and career support on the same can be a powerful means of developing an African American workforce that is best suited for a future where climate change will be a decisive factor in successful employment and job outcomes. Support in education and career opportunities at federal and state levels can take many forms. Still, it could include, among others, proactive internships, scholarships/fellowships, and career pathways that seek to equalize the training of a well-qualified black workforce, which will be effective in deploying the innovative climate solutions that Americans need today and in the foreseeable future. Several climate resilience sectors could be helpful in this regard, including, among others, renewable energy services, energy efficiency, circular economy reforestation programs, and other nature-based solutions at home and abroad. These new jobs will also require the creative application of artificial intelligence and social and emotional intelligence.

Federal and state affirmative action policies can go a long way toward expanding opportunities for young black Americans to choose and stay in well-paying careers that at the same time address climate change. Black families and the black community at large have a role to play, too. Black parents must take a more proactive role in encouraging their children and young members to select careers directly linked to the climate solutions sector. At the very least black families should encourage their young members to incorporate a climate lens to whatever career they choose.

It is evident that how the U.S. responds to the climate challenge could strongly affect how the world addresses climate change globally. The same climate solutions sector that has over time concentrated wealth within its white citizens and deprived black families of similar opportunities can serve as a lever to correct historical and structural inequality. Through education coupled with proactive action among black families at the individual and community level – the U.S. can transform climate change into an engine of opportunity and advance social equity.

Robert Ddamulira, Ph.D., is the CEO & Founder of GreenPesa LLC.

July 5, 2022

Environmental Justice and Renewable Energy

By Thomas S. Benson

According to a March 2022 survey by the Pew Research Center, a majority of Americans favor the U.S. taking steps to become carbon neutral by 2050, with 69% calling for the U.S. to prioritize the development of alternative energy, such as wind and solar, and 31% calling for the U.S. to phase out the use of fossil fuels completely. But what is environmental justice, and what relationship does it have, if any, to renewable energy?

Defining Environmental Justice

To the U.S. Environmental Protection Agency (EPA), environmental justice is the “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations and policies.” On Earth Day 2022, President Biden announced that environmental justice is about “addressing the disproportionate health, environmental, and economics impacts that have been borne primarily by communities of color – places too often left behind.” The disproportionate impact of environmental harms and ills felt by minorities and people of color forms the driving force and crux of the environmental justice movement that continues to shape federal, state, and local policy in the U.S. today.

A Transition in Reocognizing Environmental Justice

Regulatory agencies, such as the EPA, have not always recognized the disproportionate impact. Notably, a former assistant administrator for solid waste and emergency response of the EPA stated in 1987 that the “EPA deals with issues of technology, not sociology.” [1] Systemic racism in environmental policy has meant that, historically, the formulation of such policy has been premised on notions that “environmental protection is colorblind,” and that the EPA is a “science agency,” not an agency that deals with social issues. Additionally, the eventual recognition of environmental justice has led to what some scholars have referred to as “procedural justice” that solely consists of “more community involvement” and “box-checking exercises” but with “no changes in outcomes.” [1]

However, a transition is taking place to move beyond these box-checking exercises to collect quantitative and qualitative environmental justice data and display them in a transparent, digestible manner. For example, environmental justice mapping tools CalEnviroScreen and EJSCREEN combine numerous indicator data sets and assist in generating insights about environmental risk and impact that are “critical for decision-making purposes” and shed light on “systemic inequities” and “unfair treatment”—the disproportionate impact on low-income communities and people of color, among others. [1] In turn, there has been a call for climate solutions that address social and economic inequities and distribute the benefits, and one such solution is renewable energy.

Environmental Racism

Deploying renewable energy in these historically burdened and under-served communities comes against a backdrop of being subject to environmental racism through redlining and the intentional siting of harmful incinerators, landfills, chemical plants, refineries, and fossil fuel extraction beside these communities. Combined with a lack of resources to hire lawyers to challenge the granting of permits or violation of standards, these communities were left with little to no choice. This situation reflects a concept now known as environmental blackmail, where poor people are forced to choose between unemployment and a job that may threaten their “own health, their families’ health and the health of their community.” [2] One example of this depleted level of citizen power includes Cancer Alley in Louisiana, where nearly “every household has someone that has died from cancer.”

Equitable Deployment

But is renewable energy the solution? Yes, with strings attached. Renewable energy must be deployed equitably, and this means not harming the same communities and minorities that have been disproportionately subject to environmental harm emanating from siting facilities that are detrimental to human health and communities. Without acquiring consent or participation from communities affected by the adverse effects of renewable energy, these communities will remain in a cycle of abuse that capitalizes on their poor health and cheap labor. [3]

For example, as wind turbines grow in size, alongside their corresponding effects, it must be asked what impact these will have on the communities that are integrated into—forcefully or consensually. In practice, this means not only assessing effects on the aesthetic pleasure of the landscape or potential damage to a local ecosystem, such as loss to avian creatures, but also wind turbine syndrome, which has been known to cause “nausea, vertigo, tinnitus, sleep disturbance, and headaches.” [3] As previously mentioned, engaging local communities in a meaningful manner can generate positive community and environmental change. In turn, environmental hazards can be minimized and distributed fairly in proportion to benefits, and protective environmental regulations can be established and enforced with the same vigor for all communities.

One other solution, created from the bottom-up, is the establishment of community energy choice organizations, otherwise referred to as community choice aggregations or community choice energy. These organizations seek to remove the middle-man—the investor-owned utilities—and run community-scale renewable energy projects that decentralize power and reinvest profits from renewable energy generation into local communities. [3] Examples of re-investment include the development of further renewable energy projects, electrification of local bus networks, energy efficiency programs, scholarships for students, and the implementation of electric vehicle charging stations.

Conclusion: A Just Renewable Energy Transition

Overall, renewable energy—as fantastic as it might appear—is not a solution in and of itself. Environmental justice remains very relevant in deploying renewable energy, and local communities must be meaningfully engaged before decisions are made. Where communities do not or cannot create bottom-up organizations like community energy choice organizations, they ought to be brought into decision-making processes that can benefit businesses, government, and citizens alike. And there is evidently bipartisan support for renewable energy, with a majority of Democrats and Republicans supporting the expansion of solar panel farms (84%) and wind turbine farms (77%), according to a Pew Research Center survey in 2021.

The deployment of renewable energy does not need to be an all-or-nothing approach. Instead, by ensuring sufficient stakeholder and community engagement, the U.S. can enhance its prospects of a just and sustainable transition to a low-carbon economy—to achieving carbon neutrality by 2050 and meeting public demand for renewable energy. This transition to a low-carbon economy will also ideally fulfill the EPA’s goals of environmental justice, which means that everyone enjoys the “same degree of protection from environmental and health hazards” and has “equal access to the decision-making process to have a healthy environment in which to live, learn, and work.” The means to achieve this shared vision for the future is already here and is underway, but it must be done equitably to ensure the benefits and hazards of renewable energy are shared.

[1] Lee, C. 2021. “Confronting Disproportionate Impacts and Systemic Racism in Environmental Policy.” Environmental Law Institute: pages 2-4, 10.

[2] Bell, K. 2014. “The Causes of Environmental Injustice.” In Achieving Environmental Justice: A Cross-National Analysis. University of Bristol: Policy Press, chapter 3, page 34.

[3] Ottinger, G. 2013. “The Winds of Change: Environmental Justice in Energy Transitions.” Science as Culture 22(2): 222-229.

June 14, 2022

Electricity Disconnections: Pursuing the Goal of 100% access to electricity in the United States

By Dr. Kathleen Saul

World Bank data assure us that 100% of people in the United States have access to electricity.[1] Yet, as the Center for Biological Diversity reports, families in this country have had their electricity turned off more than 3.6 million times since the beginning of the COVID-19 pandemic.[2] And that figure only includes those served by public utilities in the 33 states and Washington, D.C., for which data are available. In the state of Washington, a moratorium on utility disconnections prevented public utilities from leaving customers in the dark. Still, those customers remained on edge each time the moratorium expiration date approached. Would they continue to have lighting and heating, or power for the internet service that had become vital for schooling and working during the pandemic? The governor had to act to extend the moratorium.

In 2022, the Washington Building Code Council adopted a new code that requires builders to install energy efficient electric heat pumps and hot water heaters in new commercial and large multifamily buildings; gas hookups will not be allowed (https://lawfilesext.leg.wa.gov/law/wsr/2022/02/22-02-076.htm). Governor Inslee has also signed legislation targeting 2030 as the year when all vehicles sold, purchased or registered in Washington state will have to be electric vehicles (Engrossed Substitute Senate Bill 5974, Chapter 182, Laws of 2022, 67^th Legislature, 2022 Regular Session). While these measures will reduce greenhouse gas emissions from burning fossil fuels, they will also add to the electricity burden for customers already struggling to pay their bills and at risk of disconnection. What can we do to ensure all residents of Washington have access to electricity today and in the future?

Who is most at risk of losing electricity access?

First, we need to understand which Washington residents are most at risk of losing access to electricity. In spring 2021, the Washington Utility and Transportation Commission (UTC) began to require investor-owned utilities to file quarterly reports detailing the number of customers with past-due accounts and the dollar amount of those arrearages.[3] Matching those data with the U.S. Census American Community Survey Data gives us a peek into some of the characteristics of those unable to pay their electric bills. The analysis described here focuses on 25 zip codes with the highest total dollar amount of residential arrearages in 2021 and 2022 for the largest public electric utility serving Washington: Puget Sound Energy (PSE). PSE, a wholly-owned subsidiary of Puget Holdings LLC, serves approximately 1.2 million electric customers in the Puget Sound region of the state. Those 25 zip codes accounted for 38% of the dollar arrearages reported by PSE in March 2022.

Among the variables reported by PSE: The number of customers “who absent the disconnection moratorium would have been disconnected.” Forty-four percent of the residential customers who would have been disconnected had a moratorium not been in place resided in the top 25 of the 142 zip codes PSE serves. That suggests that residential disconnections tend to concentrate in a few places and are not evenly distributed throughout the service territory. What else can we glean about households in those zip codes?

First, when compared to Washington State in general, members of households whose electricity would have been disconnected are more likely to identify as people of color:

**Figure 1: Demographics of Washington State vs. PSE Customers at Risk of Disconnection**

Next, for a subsample of 13 zip codes for which detailed census data are available, the median income ranges from just over $57,000 per year to $104,000 annually, as shown in Figure 2 below. Although many of the households do not fall below the federal poverty line ($27,750 for a family of four), most do fall well below the median household income level for the Seattle, WA, area. Quite a few of those zip codes have median household incomes above the median value for Tacoma, Washington. Looking solely at household income does not tell the entire story.

**Figure 2: Median Income of PSE Customers at Risk of Disconnection vs. Seattle and Tacoma, WA Median Incomes**

Census data reveal that some families have indeed fallen into poverty (Figure 3). The most striking information revealed in Figure 3 is the high poverty rate for households with a female head and no spouse present. Twenty to 45% of single female-headed households, and especially those with children under the age of 18, in these zip codes had fallen into poverty. Their electricity would have been turned off had there been no moratorium. The children would not have had access to online classrooms during the COVID-19 pandemic.

**Figure 3: Poverty Rate for Households for Which Poverty Rate Has Been Determined for 13 Zip Codes in PSE Service Territory**

These data align with reports in the press about the financial straits of single parents. Some caregivers skip meals to be able to feed their growing children, switch to vegetarian diets as the cost of meat rises, take on extra jobs to make ends meet, and forego trips to the doctor or dentist.[4] As budgets continue to get strained, will they be able to pay their electric bills?

Those most likely to fall behind in paying electric bills

What do these data tell us? While the sample size is admittedly small, the data come from only one part of Washington, and much more research needs to be conducted, this analysis reveals that people of color and families headed by single females tend to fall behind in paying their electric bills and thus may have their electricity disconnected. These groups are at risk now and could be at greater risk as the push away from fossil fuels and toward a society powered by green electricity continues.

Recommendations:

First, as Stephen Tully (2006) argued, under international human rights law, access to electricity is a basic human right.[5] As such, no household should have its electricity disconnected because of an inability to pay. We need to reexamine the business model that provides investor-owned utilities with a guaranteed rate of return. PSE has filed paperwork with the UTC requesting an overall rate of return of 7.39% in 2023, 7.44% in 2024, and 7.49% in 2025.[6] The company has continued to pay dividends to shareholders and provide merit increases to executives at a time when thousands and thousands of customers may not be able to keep their lights on.

Enrollment barriers to electric bill assistance

In the meantime, we need to ensure that electric utilities increase their outreach to customers at risk of disconnection, helping them enroll in bill assistance programs. In March 2022, over 6,500 PSE residential customers had begun receiving bill assistance. However, that same month, more than 11,500 residential customers would have had their service disconnected had a moratorium not been in place.

One of the hurdles to receiving electric bill assistance is figuring out how to apply. Almost all programs require internet access, and most internet sites are in English—a problem for those whose first language is not English. Over 15% of households at risk of disconnection in the PSE service territory self-identified as Asian, and another 15% as Hispanic/Latino. PSE needs to do more outreach in Spanish and various Asian languages.

In addition, under the current regulations, customers wanting to prevent disconnections must:

notify the utility of the inability to pay the bill, including a security deposit;
provide self-certification of household income for the prior 12 months to a grantee of the Department of Commerce, who must then determine that the customer’s household income does not exceed the maximum allowed…;
apply for home heating assistance from applicable government and private sector organizations and certify that any assistance received will be applied to the current bill and future utility bills;
apply for low-income weatherization assistance…if such assistance is available for the dwelling;
agree to enroll in and maintain a payment plan; and
agree to pay the money owed even if they move.

The second bullet point underscores the focus on household income. However, as seen in Figure 2 above, household income level may not be a good indicator of an inability to pay bills. We need to take a more holistic approach to understand the situation of electric customers. What prevents them from paying their electric bills? A human rights perspective reminds us that “…consumers should not be deprived of the minimum essential level [of electricity] necessary to lead a life in human dignity…” (Tully, 2006, p. 33). Thus, how can we, as a society, ensure that all consumers maintain access to the electricity they need to survive and thrive in the modern world?

Breaking the cycle of poverty in vulnerable households

The data from this analysis highlight the vulnerability of households headed by females, especially those with children. We must establish programs to locate, establish trust with, and help those struggling families. If children under 18 lose access to the electricity needed for schooling and job searches, they will continue to lose ground scholastically and economically.[7] To break the cycle of poverty, they need electricity. To participate in an electrified future, they need electricity.

Outreach is one step. Codifying restrictions on disconnections is another. For the past several sessions, energy justice advocates in Washington state have supported legislation that would, among other things, establish a year-round energy service shutoff moratorium for low-income households or households with people with disabilities. Unfortunately, even with that narrow target population, the bill languished in committee. Utility representatives expressed concern about the impact on their revenues. One hundred percent access to electricity in the United States? Not yet, but that remains the goal we continue to pursue.

[1] The World Bank. (2022). “Access to electricity (%) – United States.” Retrieved 6 May 2022 from https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=US

[2] Jean Su and Christopher Kuveke. (2022). “Powerless in the Pandemic 2.0: Electric Utilities Are Still Choosing Profits Over People.” Center for Biological Diversity, BailoutWatch, and Tiger Moth LLC.

[3] Arrearages are the amounts of past due bills

[4] Alicia Wallace. (10 May 2022). “Skipping meals. Racking up debt. How inflation is squeezing single parents.” CNN Business. Retrieved 10 May 2022 from https://www.cnn.com/2022/05/10/economy/single-parent-inflation-economy/index.html

[5] Stephen Tully. (April 2006) “The Human Right to Access Electricity.” The Electricity Journal Vol. 19, Issue 3, pp. 30 – 39.

[6] Puget Energy, Inc. (31 December 2021). Form 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Retrieved 26 May 2022 from https://www.pugetenergy.com/pages/filings.html

[7] Rachel Hirsch and Jake Varn. (7 April 2021) “Broadband Access For Success In Postsecondary Education.” National Governors Association. Retrieved 26 May 2022 from https://www.nga.org/news/commentary/broadband-access-for-success-in-postsecondary-education/

January 27, 2020

Seoul 1 GWp ‘Solar City’ Highlighted at Mayors Forum

The 2019 Mayors Forum (part of IREC held in Seoul in October) featured Seoul’s 1 GWp Solar City Initiative. FREE helped the City to design this ambitious program as part of the FREE-Seoul Metropolitan Government (SMG) Memorandum of Understanding (MOU). Dr,Byrne delivered the keynote at the Forum, which drew 37 mayors from 25 countries. Mayor Park Won Soon chaired the Forum.

NYC_small — Dr. Byrne and Mayor Park Won-soon interview in Seoul, Korea

Seoul Metropolitan Government (SMG) plans to invest $1.5 billion in their strategy to deploy 1 gigawatt (GWp) of solar energy by 2022. As part of the MOU, FREE has provided the modeling and technical assessment of the city’s rooftop potential as hosts of a distributed solar power plant. FREE also calculated the economics of the project and used a financing structure it has developed for city-scale investment in such a project. (FREE has published results of it modeling and financing approach for 5 cities in addition to Seoul: New York City, London, Munich, Amsterdam, and Tokyo.)

In November 2017, Seoul Metropolitan Government (SMG) declared its intention to deploy 1 gigawatt of rooftop solar as part of its “Solar City Seoul” master plan. Over the next five years, Seoul city government plans to invest $1.5 billion to make the project a reality. This is a significant step forward in the future of Seoul’s sustainability contribution and follows in the wake of the very successful first stages of the city’s One Less Nuclear Power Plant (OLNPP) initiative. 1 Under initiatives like the OLNPP, Seoul focused heavily on promoting energy conservation and efficiency improvement. With this new Solar City Seoul plan, the city is ramping up investment in energy production as well. FREE applauds this direction chartered by the Mayor of Seoul, Mr. Park Won-soon.

FREE has been actively advising the city for five years on the prospects of becoming a “solar city.” As part of the Seoul International Energy Advisory Council (SIEAC), Dr. John Byrne has described to city officials the potential of rooftop solar across the 10-million people strong city. FREE has also published several refereed articles analyzing the emergent role of the solar city concept coupled with new priorities, such as policy effectiveness, solar financing support, and market mechanisms available to Seoul to explore this potential in detail. 2 For example, research we have conducted shows Seoul has a full deployment potential of about 10 gigawatts. 3

FREE attended the launch of the initiative. Mayor Park Won-soon and Dr. Byrne were interviewed by leading Korean newspapers on the strategy. During an interview with Kyunghyang Shinmun, Mayor Park underscored FREE’s role, noting that he “had an opportunity to take a view of the downtown area in Seoul from Namsan Mountain with Prof. Byrne. As I talked with him, I realized that Seoul has a significant PV technical potential.” 4

A striking feature of the Solar City Seoul plan is the commitment to increase household-level PV deployment through miniature solar generators installed on rooftops and verandas or so-called “mini-PV” technology. This prong of the plan will engage more than 100,000 households in helping to supply solar energy to the city! This is exactly in tune with the Mayor’s original pursuit of the idea that “citizens are energy.” The initiative will make solar energy a part of the everyday life of Seoul’s citizens and businesses.

FREE has worked extensively on the concept of the “solar city” – the citywide deployment of rooftop solar energy. Our work shows not only that Seoul has significant potential to develop itself as a solar city but that cities like New York, Tokyo, London, Amsterdam, and Munich possess similar resources. 5 Indeed, a paper published in the International Journal of Urban Sciences by the FREE research team highlights the fact that this opportunity is common to most cities around the world. 6 An investigation of the market, finance, and policy considerations associated with solar city deployment found that the concept is not only technically feasible but it also creates practical economic benefits, including job creation and expansion of local green industries, and results in significant environmental benefits by shrinking the city’s carbon footprint by more than 10 percent. 7

“I will make Seoul a place where PV can be found everywhere”, the Mayor said. The FREE team will be there to continue to help make this ambition become unavoidable reality.

FREE published a blog article on the OLNPP initiative which can be accessed at: https://freefutures.org/one-less-nuclear-power-plant-seouls-commitment-to-a-low-carbon-and-non-nuclear-city/
For more information on our publications, please see freefutures.org/publications
Byrne, J., Taminiau, J., Kurdgelashvili, L., & Kim, K. N. (2015). A review of the solar city concept and methods to assess rooftop solar electric potential, with an illustrative application to the city of Seoul. Renewable and Sustainable Energy Reviews, 41, 830-844. doi://dx.doi.org/10.1016/j.rser.2014.08.023
Translated from the Korean newspaper Kyunghyang (article, in Korean, can be found at: https://news.khan.co.kr/kh_news/khan_art_view.html?artid=201712072105005&code=100100
Byrne, J., Taminiau, J., Kim, K. N., Seo, J., & Lee, J. (2016). A solar city strategy applied to six municipalities: Integrating market, finance, and policy factors for infrastructure-scale photovoltaic development in Amsterdam, London, Munich, New York, Seoul, and Tokyo. Wiley Interdisciplinary Reviews: Energy and Environment, 5(1), 68-88. doi:10.1002/wene.182
Byrne, J., Taminiau, J., Seo, J., Lee, J., & Shin, S. (2017). Are solar cities feasible? A review of current research. International Journal of Urban Sciences, 1-18. doi:10.1080/12265934.2017.1331750
Byrne, J., Taminiau, J., Kim, K. N., Lee, J., & Seo, J. (2017). Multivariate analysis of solar city economics: Impact of energy prices, policy, finance, and cost on urban photovoltaic power plant implementation. Wiley Interdisciplinary Reviews: Energy and Environment, , n/a. doi:10.1002/wene.241

June 11, 2018

California’s Bold Solar Energy Vision

By Joseph Nyangon
How California’s New Rooftop Solar Mandate Will Build Additional Value for Its Customers

*Luminalt solar installers Pam Quan (L) and Walter Morales (R) install solar panels on the roof of a home on May 9, 2018, in San Francisco. (Credit: Justin Sullivan / Getty Images).*

The boldest new plan yet to increase electricity generation from noncarbon-producing sources has been announced by California. Highly regarded as a trendsetter and vanguard of progressive energy policies, California became the first state to require solar power installed on all new homes. The requirement makes rooftop solar a mainstream energy source in the state’s residential market. Adopted by the California Energy Commission (CEC) as an update to the state’s 2019 Title 24, Part 6, Building Energy Efficiency Standards [1], the solar mandate obligates new homes built after Jan. 1, 2020 to include photovoltaic (PV) systems.

These standards represent a groundbreaking development for clean energy. Single-family homes and multifamily units that are under three stories will be required to install solar panels. The biggest impact may prove to be the incentive for energy storage and the expected uptake in energy efficiency upgrades which could significantly cut energy consumption in new homes.

But not everyone is celebrating. Critics warn that the requirement could drive up home prices overall, further exacerbating already high housing costs in the state. For instance, in a letter to CEC, Professor Severin Borenstein of the Haas School of Business at UC Berkeley warned that such a plan would be an “expensive way to expand renewables” to achieve clean energy goals [2]. But in its order, CEC argued that the new rooftop solar mandate would save homebuilders and residents money in the long-term and cut energy-related greenhouse-gas emissions in residential buildings.

Few solar firms, homebuilders, efficiency experts and local governments fully understand the significance of the mandate. Buildings-to-grid integration experts speak of “turning residential solar into an appliance,”—the merging of rooftop solar, home energy management, energy storage, and data analytics into the next generation of high-performance buildings that is expected to usher in a new era of sustainable development.

How could this new solar mandate help improve grid management so that these ‘new power plants’—clusters of buildings integrated into the grid—can respond quickly to load signals like water heating or home entertainment and thereby contribute to better system reliability? Of course, there are a lot for stakeholders to grapple with between now and 2020 as they come up with compliance solutions to address these opportunities. But this gap, especially, poses a significant challenge in how the new California’s Title 24 codes will affect the clean energy industry.

On the delivery side, First Solar Inc.—a U.S. panel manufacturer—and Sunrun—the largest U.S. residential-solar installer—could be major beneficiaries of the new building codes considering their established market positions in the state. The U.S. Energy Information Administration’s Annual Energy Outlook 2018 puts the mid-point estimate of installed solar capacity required to meet the state’s ambitious ‘50% by 2030’ renewable portfolio standard (RPS) target at around 32 GW (Figure 1). California currently has an installed solar capacity of 18.6 GW, indicating that it has only until the beginning of the next decade to find technical, business, and policy solutions to realize a 50% increase in installed PV capacity. Considering that the core elements of the requirements are now technically locked in, greater cooperation with solar industry players is needed for the success of this bold energy vision.

Figure 1: AEO 2018 estimate of renewable energy generating capacity and emissions in California (2016-2050)

Here are suggestions of what needs to be done to succeed. The provision of today’s electricity services is fundamentally dependent on its transmission, distribution, and storage (TD&S) systems; these functions include business activities that support construction, operation, maintenance and in this case, overhaul California’s electricity infrastructure [3]. According to the 2018 U.S. Energy and Employment Report (USEER), national employment in TD&S including retail service was approximately 2.35 million in 2017, with nearly 7% growth expected in 2018, mostly in manufacturing, construction, installation/repair, and operation of TD&S facilities [4]. Using these national figures as rough benchmarks for job generation, the new solar building mandate represents a major growth opportunity for the solar industry. However, there are transmission implementation challenges that could occur in the future. Orders 890 and 1000 by the Federal Energy Regulatory Commission (FERC) require transmission providers to treat demand resources comparably with transmission and generation solutions during transmission planning. Which means that a clarification is required of whether onsite generation under Title 24 would count toward compliance with FERC’s orders.

With proper distribution and transmission planning coupled with the fact that new homes will have better efficiency overall, California could reap significant benefits from the solar mandate and pioneer in mainstreaming non-wire alternative business models associated with solar distributed generation systems [5]. Deferring and reducing costs to capacity upgrades for distribution and transmission under a distributed utility regime, is one example. For this reason, California regulators would need to anticipate and address compliance issues that could result during the implementation period, such as concerns regarding flexibility measures, the estimated number of homes that would comply with the codes, and year-on-year market bottlenecks that may occur without a rapid change in business models. Further greater stakeholder engagement and partnerships with the building industry, universities and research organizations will be needed to track progress on single–family and multi-family solar development.

Another key step is to improve the revenue model for all generation technologies to reconcile with long-term contracts. In recent years, as solar power grew in the Western Electricity Coordinating Council region, and particularly in California, future prices of solar electricity became uncertain. Today’s electricity prices are set based on the variable cost of the marginal technology. Because technologies like rooftop solar, once built have near-zero marginal costs, this could put downward pressure on long-term electricity prices. Good news for customers and the economy! But payment for TD&S may be of risk. States have been solving this problem by implementing long-term fixed pricing systems, either through power purchase agreements (PPA) or capacity mechanisms, which carry the full-price risk of the technology. California (and New York) has proposed new revenue models that balance the pace of improvement in technology cost and revenue returns [6]. Still, further adjustments to the revenue model may be required in the future.

The logic behind California’s solar mandate is to reposition the market so that the bulk of generation will increasingly come from customer-sited equipment. This is significant: rooftop solar is one of the most effective customer-sited solutions for accelerating a decentralized grid and greening our electricity supply. Apart from the anticipated long-term cost-reductions to the grid, we can infer that CEC may have been guided by the growing market potential of rooftop solar when crafting the new building code energy-efficiency standards. As to the question of the economic viability of the standards to the grid, a detailed study is needed to take into account direct and indirect impacts.

Recently, there has been mention of the mounting problem widely known as the “duck curve”—that is, the sun shines only during the day which means that the solar energy cannot meet the system’s demands when the sun goes down or cloud cover disrupts solar energy system output. This phenomenon can force utilities to ramp up non-solar generation, thereby undermining some of the benefits of a low-carbon strategy. This concern raises a question: What happens to the value of solar energy produced as new additional capacity grows? Over-generation? Because retail competition is still limited in volume to support the anticipated market growth under the new standards, the value of the additional solar generation could decline. Furthermore, the grid would need to be prepared to anticipate and handle any over-generation. CEC is aware of the duck curve problem and included a compliance credit for energy storage in the Title 24 codes to address the issue. But this may not be enough. Options for maximizing on-site solar use should be sought as capacity grows. In addition, while greater electrification of buildings is noteworthy for the utility business model, without offering incentives to residential solar producers, for instance, in the form of affordable construction materials that socializes costs overall ratepayers and introduces new products and services that guarantee long-term profitability, the latest round of CEC building codes could raise significant grid management issues and market uncertainties thus exacerbating the duck curve problem. In brief, the role of utilities in interconnecting these ‘power plants’ and managing any over-generation issues will become more critical.

Growth from the new solar mandate and steps taken to incentivize storage and energy efficiency upgrades may not produce profits for utilities in the short term. But adoption of the Title 24 codes offers utilities opportunities for greater electrification and enables them to search for cost-effective pathways to reduce carbon emissions. In a study of grid decarbonization strategies in California, Southern California Edison (SCE) found that a clean power and electrification path can provide an affordable and feasible approach to achieving the state’s climate and air quality goals [7]. While the cost of managing the grid is an important consideration for utilities like SCE, approval of the new solar mandate is an important reminder of the changing utility industry. Power companies are developing new ways to extract value from emerging distributed solar technologies and expand customer choices. The success of the Title 24 codes will depend to a significant degree on supportive regulation [8,9]. With billions of investments required for grid modernization to address the aging infrastructure issues, finding a sustainable operating model that enables utilities to recuperate costs through rates is fundamental. This is a long-term proposition and power companies should treat it as such.

Despite the challenges discussed above, California’s new Title 24 mandate represents the boldest and most inspiring building energy efficiency standards by any state to date [10]. No doubt the questions surrounding future electricity rates, grid management issues, retail competition, investments in TD&S, design of long-term contracting via PPA mechanisms, and the impact on housing prices require significant attention. But this solar mandate can be an unprecedented energy-problem solving strategy that turns every home into a power plant as solar becomes more mainstream.

Additional Resources
[1] Rulemaking on 2019 Building Energy Efficiency Standards: https://energy.ca.gov/title24/2019standards/rulemaking/
[2] Email response by Severin Borenstein regarding new building energy efficiency standards rulemaking to mandate rooftop solar on all new residential buildings: https://faculty.haas.berkeley.edu/borenste/cecweisenmiller180509.pdf
[3] Nyangon, J. (2015). Why the U.S. urgently needs to invest in a modern energy system. FREE. https://freefutures.org/why-the-u-s-urgently-needs-to-invest-in-modernizing-its-energy-infrastructure/
[4] The 2018 U.S. Energy and Employment Report was prepared by the Energy Futures Initiative (EFI) and the National Association of State Energy Officials (NASEO): https://static1.squarespace.com/static/5a98cf80ec4eb7c5cd928c61/t/5afb0ce4575d1f3cdf9ebe36/1526402279839/2018+U.S.+Energy+and+Employment+Report.pdf
[5] Nyangon J. (2017). Distributed energy generation systems based on renewable energy and natural gas blending: New business models for economic incentives, electricity market design and regulatory innovation [Ph.D. dissertation]. College of Engineering, University of Delaware. Google Scholar.
[6] Nyangon J, Byrne J. (2018). Diversifying electricity customer choice: REVing up the New York energy vision for polycentric innovation. In: Tsvetkov PV, editor. Energy Systems and Environment. London, UK: IntechOpen. pp. 3-23. Google Scholar
[7] The Clean Power and Electrification Pathway: An exploration of SCE’s proposal to help realize California’s environmental goals: https://www.edison.com/content/dam/eix/documents/our-perspective/g17-pathway-to-2030-white-paper.pdf
[8] Nyangon, J. (2015). Obama’s Budget Proposals for Clean Energy and Climate Investment. FREE. https://freefutures.org/obamas-budget-proposals-for-clean-energy-and-climate-investments
[9] Nyangon, J. (2015). Mobilizing Public and Private Capital for Clean Energy Financing. FREE. https://freefutures.org/mobilizing-public-and-private-capital-for-clean-energy-financing/
[10] Nyangon, J. (2014). International Environmental Governance: Lessons from UNEA and Perspectives on the Post-2015 Era. Journal on Sustainable Development Law and Policy 4: 174–202. Google Scholar