California Is Generating So Much Solar Energy, It's Paying Other States to Take It

California's solar boom is going so well that grid operators are facing unprecedented challenges in managing excess supply. . (Photo: Bureau of Land Management/Flickr)

The Golden State may want to consider changing its nickname to the Solar State.

According to a recent expose in the Los Angeles Times, California's solar boom is growing so fast and with such intensity that utility regulators are frequently paying neighboring states to absorb surplus production. The forces behind this baffling problem are largely due to the falling cost of solar, the state's major energy players, and the struggle to find the best way to incorporate a clean energy source that has become increasingly decentralized into the power grid.

"It's not the renewables that's the problem; it's the state's renewable policy that's the problem," Gary Ackerman, president of the Western Power Trading Forum, an association of independent power producers, told the LA Times. "We're curtailing renewable energy in the summertime months. In the spring, we have to give people money to take it off our hands."

Since 2010, solar production in California from utilities has risen from a scant .05 percent in 2010 to over 10 percent today. Combined with a dramatic rise in rooftop installations on homes and business across the state, amounting to over 5 GW, and you have a state that contains half the nation's solar-generating capacity.

The Desert Sunlight Solar Farm in California's Mojave Desert uses approximately 8.8 million panels and generates 500 MW of electricity.
The Desert Sunlight Solar Farm in California's Mojave Desert uses about 8.8 million panels and generates 500 megawatts of electricity. (Photo: J R/Flickr)

It's a good problem to have (but it is a problem)

Scaling this influx of clean energy across a utility dominated by natural gas power plants (typically more than one-half of in-state electricity generation) and other sources such as hydroelectric, wind and geothermal has proven tricky. Too much electricity flooding the grid when demand is low can overload transmission lines and lead to blackouts. To compensate for this, California has to unload its glut on neighboring states like Nevada and Arizona.

"Oversupply causes prices to fall, even below zero," explains Ivan Penn for the LA Times. "That's because Arizona has to curtail its own sources of electricity to take California's power when it doesn't really need it, which can cost money. So Arizona will use power from California at times like this only if it has an economic incentive — which means being paid."

For the first quarter of 2017, California spent millions paying Arizona utilities to take its excess solar. In March alone, there were 14 days when the state exported its solar production, including a record-setting stint on March 11 from which 40 percent of the state's electricity came from utility-scale solar generation. While this so-called "negative pricing" eases during the summer months when consumer demand for electricity increases by more than half, Penn reports that the pay-off trend will only increase in the coming years as more solar projects come online.

The most immediate fix for utilities struggling with impact from solar is to curb production. It's much easier to scale back a solar utility than it is to start and stop a natural gas plant.

"It's an interesting growing pain of our increasingly green grid," Shannon Eddy of the Large-Scale Solar Association told GreenTechMedia. "We're curtailing the cleanest and newest resource on the grid, and leaving alone the 2,000+ megawatts of mostly fossil imports and in-state gas."

Unlike traditional power plants, however, utilities have no control over the hundreds of thousands of installed rooftop projects scattered around the state. These private systems will continue to flood the grid with clean power, no matter how the major players reshuffle the deck.

A combination of increased hydroelectric, solar and wind generation has resulted in the lowest levels of natural gas use for electricity in California in five years.
A combination of increased hydroelectric, solar and wind generation has resulted in the lowest levels of natural gas use for electricity in California in five years. (Photo: EIA)

The answer lies in storage

One solution benefiting from California's enthusiastic embrace of solar is the nascent energy storage industry. In 2013, and again in 2016, the state passed legislation mandating the state's three investor owned utilities to procure nearly 2,000 megawatts (MW) of energy storage by 2024. In addition, California has also set aside nearly a half-billion in incentives for private deployment of storage, such as homeowners interested in Tesla's PowerWall battery system.

"I had relatively limited expectations for the battery industry in advance of 2020," Michael J. Picker, president of the California Public Utilities Commission, told the NY Times. "I thought that it would not really accelerate and begin to penetrate the electric grid or the transportation world for a while to come. Once again, technology is clearly moving faster than we can regulate."

In the last six months alone, California has added 77 MW of battery storage capacity, including a 20-MW farm east of Los Angeles that was installed by Tesla in only three months.

By using energy storage to load shift solar, particularly for use at night, California hopes to turn its surplus problem into an asset that will further cement its position as a leader in renewables. So bullish is the state on its growing investments in solar and wind, that new legislation was recently introduced setting a goal of 100 percent electrical power from renewable energy sources by the end of 2045.

"California's experience over the last decade offers hard evidence that we can dramatically expand clean energy while also growing our economy and putting people to work," California State Sen. Kevin de León (D), who introduced the bill, declared in May. "This measure will ensure that California remains the world's clean energy superpower and that we lead the nation in addressing the threat of climate change."