For the first time anywhere in the United States, a grid operator has approved rules that allow companies to buy electricity from numerous homes and commercial power systems, then bundle it to meet the threshold needed to sell energy on the wholesale market. The move approving solar power bundling means electricity from individual rooftop systems could be shared with utility customers in other states.
According to the Chicago Tribune, the California Independent System Operator Corporation (ISO) will now permit companies to consolidate the output of rooftop solar systems, batteries, and even plug-in electric vehicles. The rules apply to utilities as well as private companies and individuals. The shift demonstrates that small-scale power sources are becoming a more critical part of the state’s energy mix.
“This is an important win for California energy users,” said Ken Munson, chief executive officer of Sunverge Energy, which aggregates power from solar panels and batteries installed in homes and businesses. “It paves the way for consumers to play a more active role in the generation and distribution of the energy we use every day.”
Residential solar has been the fastest growing segment of the California solar industry. With an increase of 50% in 2014, it outpaced utility-scale solar, which expanded 15%, according to Bloomberg New Energy Finance.
The move by the grid operator “could ultimately benefit providers of distributed solar, because it creates the opportunity for an alternative source of revenue outside of net metering,” said Madeline Yozwiak, a Bloomberg analyst. SolarCity, the biggest residential rooftop solar owner in the state, sees the Thursday decision as an “important first step toward expanding access for distributed solar and storage in wholesale markets,” according to an e-mail from company spokesman Jonathan Bass.
“Historically, residents haven’t been able to participate in wholesale markets; they have been ring-fenced,” says Alan Isemonger, founder of Energy Market Expertise in Fair Oaks, California. “Now they will have more opportunities to participate.” He was formerly a manager in market operations at the California ISO.
California wants to get 33% of its power from renewable sources by 2020 and 50% by 2030 as part of its overall plan to meet the challenge of impending climate change. Hopefully, the decision by the California ISO will spur interest in aggregating solar power in other states, leading to more competition and lower prices for consumers.