California passes community solar bill, awaits governor’s signature

california state house governor

The California State Legislature passed the much-anticipated AB 2316 that will create a community renewable energy program to make community solar + storage projects viable and more accessible. This is a win for Californians who rent or have low incomes as well as the state’s power grid. The timing aligns perfectly with the passage of the Inflation Reduction Act and the Department of Energy’s overall goals to advance community solar.

The bill now heads to Governor Gavin Newsom who will have until September 30 to act on the measure.

“This bill rightly puts communities most harmed by pollution and climate change front and center in California’s transition to a clean energy future,” said Alexis Sutterman, Energy Equity Program Manager at the California Environmental Justice Alliance. “By signing this bill, Governor Newsom can cut energy bills for low income families struggling to make ends meet and take a critical step forward in closing the clean energy gap. This bill will also increase clean energy capacity, which will help California safely and reliably retire polluting fossil fuel plants in environmental justice communities.”

AB 2316 would create a community renewable energy program, such as community solar plus storage. The bill:

  • Gives renters, nearly half of Californians and predominantly people of color, access to clean energy and lower electricity bills
  • Builds the reliability of California’s power grid through linking storage with community solar
  • Ensures at least 51% of subscribers are low income customers, triggering at least a 40% federal tax credit on solar panels under the Inflation Reduction Act
  • Requires prevailing wages for workers, triggering a 30% federal tax credit for storage installations under the Inflation Reduction Act
  • Avoids cost transfers to non-participants and maximizes the state’s ability to access federal funds under the Inflation Reduction Act.

“Californians are struggling with high energy and housing costs more than ever. Community solar plus storage can put money back in their pockets while fighting climate change and building a more reliable power grid,” said Susannah Churchill, Deputy Program Director, West at Vote Solar. “By signing this bill, Governor Newsom can ensure California leads the nation in equalizing clean energy access among families with low incomes while accessing billions in federal funds to supercharge this long overdue change.”

Community solar projects are smaller scale installations often built on landfills, former industrial sites, or private land. Customers can sign up as subscribers and, in turn, receive credits on their electricity bills based on their share of the project’s generation. When paired with energy storage, projects enhance power grid reliability by providing power after the sun sets.

The Biden Administration is deploying community solar to generate $1 billion in annual utility bill savings in a pilot program benefitting low and middle-income households. The federal Inflation Reduction Act includes billions of dollars in new incentives for community solar projects with storage benefiting low-moderate income families and paying prevailing wages.

Community solar generates over 4.4 GW of power across the country, which is enough energy to power nearly 800,000 homes. In a few short years, New York State became the nation’s community solar leader with capacity to power 200,000 homes. Community solar is expected to generate 70% of progress towards New York’s goal to power 700,000 new homes with distributive solar by 2030 with at least 35% of benefits going to disadvantaged communities and low/moderate income families.

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