California is struggling with a growing problem: too much solar energy

But now the state and its grid operator are grappling with a strange reality: There is so much solar energy on the grid that, on sunny spring days when there isn’t as much demand, electricity prices go negative. Gigawatts of solar energy are being ‘limited’ – essentially thrown away.

In In response, California has scaled back incentives for rooftop solar and slowed the pace of installing panels. But diminishing economic returns could slow solar energy development in a state that has tried to transition to renewable energy. And as other states build more and more of their own solar power plants, they could soon face the same problems.

“These are not insurmountable challenges,” said Michelle Davis, head of Global Solar at energy research and consultancy firm Wood Mackenzie Power and Renewables. “But these are challenges that many grid operators have never had to deal with.”

Solar energy has many wonderful properties: once built, it costs almost nothing to use; it produces no air pollution and generates energy without burning fossil fuels. But it also has one big, obvious disadvantage: the sun doesn’t always shine.

More than fifteen years ago, researchers at the National Renewable Energy Laboratory were modeling a future with widespread solar energy when they noticed something strange. With a lot of solar energy on a given grid, the net load – or electricity demand minus renewable energy – would take on a ‘U’ shape. Sky-high demand in the morning would be replaced by near-zero demand in the middle of the day, while solar energy could generate virtually all the electricity people need. needed. When the sun set, demand rose again.

The California grid operator known as CAISO later called this effect the “duck curve.” (If you squint, you can imagine the curve as a duck’s belly.) This curve is most noticeable in the spring months, when solar panels get a lot of sunshine but there is less demand for heating and cooling.

In California, the duck curve has become a huge, deep chasm in recent years – and solar energy remains unused. The state was lost in 2022 2.4 million megawatt hours of electricity, 95 percent of which comes from solar energy. (That’s roughly 1 percent of the state’s total energy generation in a year, or 5 percent of solar generation.) Last year, the state did that in the first eight months alone.

Clyde Loutan, director of renewable energy integration at CAISO, says the state has long been prepared for more solar energy on the grid. But he added: “We drastically underestimated the speed at which residential solar would come to market.”

Restricting solar energy is not technically difficult. According to Paul Denholm, senior research fellow at the National Renewable Energy Laboratory, it is akin to flipping a switch for grid operators. But throwing away free power increases electricity prices.

It has also been subverted the benefits of installing solar panels on roofs. Since the 1990s, California has paid owners of rooftop solar panels when they export their energy to the grid. That meant owners of rooftop solar panels got $0.20 to $0.30 for every kilowatt hour of electricity they provided.

But a year ago, the state changed this system, known as “net metering,” and now only compensates solar panel owners for the value their energy brings to the grid. In the spring, when the duck curve is deepest, that number may drop almost zero. Customers can get more money back if they install batteries and feed power into the grid in the early evening or morning.

The change has sparked a huge backlash from Californians and rooftop solar companies say their companies are in trouble. In fact, Wood Mackenzie predicts that residential solar installations in California will decline by about 40 percent by 2024. Some state politicians are now trying to overturn the rule.

“Under the CPUC’s leadership, California is responsible for the largest loss of solar jobs in our nation’s history,” Bernadette del Chiaro, executive director of the California Solar and Storage Association, said in a statement referring to the California commission for public benefit.

But experts say it reflects how the economics of solar are changing in a state that has gone all-in on the technology.

“You don’t want the utility or grid operator to pay too much for power when it doesn’t have to,” Davis says.

Other states, which have been slower to adopt solar, are starting to experience the same thing. Nevada, which gets 23 percent of its energy from solar, has also seen deepening duck curves. Hawaii, which has thousands of homes with rooftop solar, has reduced the payments these households receive from the grid.

Grid operators in California hope their experience will teach other states what to expect as renewables grow. “The problem we see in the West is that no one else has seen this,” Loutan said.

Solar energy can still grow in California. In summer, when the high use of air conditioning puts a strain on the electricity grid, solar energy can be useful even in the middle of the day. Denholm says that as the price of solar energy continues to drop, installing solar that is regularly curtailed can still be cost-effective. “Disposing of a certain amount of renewable energy can absolutely make economic sense,” he said.

But the Californian grid operator still hopes to prevent this if at all possible. Loutan called it “one of the last things we want to do.”

To cope, CAISO sells some of the excess power to nearby states; California also plans to install additional storage and batteries to capture solar energy until later in the afternoon. Transmission lines that can transport electricity to nearby regions will also help; some of the lost energy comes from regions where there simply aren’t enough power lines to carry a sudden burst of solar energy.

Denholm says the state is starting to take the steps needed to address the glut. “There are fundamental limits to the amount of solar energy we can put on the grid before you need a lot of storage,” Denholm says. “You can’t just sit there and do nothing.”