Called the feed-in tariff model, the 1-gigawatt pilot program would require California utilities to buy power from renewable systems of between 1 and 20 MW in size. The state’s investor-owned utilities would hold biannual auctions for renewable energy developers, and award contracts to the lowest-cost, viable projects.
The auction model would ensure that prices would not be set too low to encourage participation in the program, nor too high, which could drive up costs for ratepayers, according to The Vote Solar Initiative, a California nonprofit targeting policies to boost renewable energy development.
“What they learned [in Europe] is that it’s hard to peg a price in a competitive market, especially when the price of panels fluctuates,” said David Niebauer, founding partner of Energy Council Partners, a San Francisco-based law firm focused on renewable energy.
“The approach the CPUC is taking is more sustainable.”