Why Is California Limiting Solar Power In The Grid?

Sometimes we need big changes in the world. Without significant changes, the oversupply of renewables will stall efforts to overhaul the power sector. Californians are having a sunny spring, which means the state’s solar farms and rooftop panels are immersing the grid with electricity.  The sun never stops shining!

The dilemma is, they’re producing so much that plummeting prices and mandates by the state’s grid operator are forcing renewable power plants to throttle back generation. In April, California solar and wind farms shut down or dialed back nearly 95,000 megawatt-hours of power, a new record, according to the California Independent System Operator, which manages the vast majority of the state’s electricity. That’s enough to power more than 30 million addresses for an hour.

This oversupply of solar is happening because California has added vast amounts of renewable energy production in recent years, mainly to meet policy mandates requiring half the state’s electricity to come from carbon-free sources by 2030. With additional production coming online in the next few years, the state is on pace to reach that target a decade ahead of schedule.

California’s recently affirmed rule requiring most new homes to include rooftop solar panels will further aggravate this problem because it adds solar supply even as it reduces demand.  Demand is important to inform supply.

More Clean Energy?

It’s great news for climate goals and decreasing carbon emissions. But that success is also producing certain challenges, placing both economic and physical stresses on the power system. Economic stresses are typically a bad thing for consumers.

These restrictions could discourage additional deployment of renewable energy, undermining broader efforts to overhaul the power sector. Indeed, that’s partly why the pipeline for other solar projects is already narrowing in California.

Several states and nations will experience similar growing pains as they ramp up renewable production. “This is a leading indicator of trouble for the whole country,” states James Bushnell, an energy economist at the University of California, Davis.

The fundamental problem is that within a given area, electricity generation from every solar panel increases and decreases at the same times, as the sun rises and sets. On top of that, solar production peaks in the middle of the day, when electricity needs decreases. People use electricity at different times, but most people use the most at the same time.

As it stands, California’s system has a restricted ability to store that power, send it elsewhere, or weigh it out with other renewable resources like wind. So the more solar California adds, the less valuable it becomes.

Isn't Cheap Solar What We Are After?

In not so many words, the answer is yes. But cost and price are not equivalent terms. In a regularly functioning market, estimates that regularly drop to zero will eat deeply into the profits of power plant operators, actively discouraging companies from bringing more facilities online.

“This value deflation problem could halt solar’s rise down the road,” corresponds Varun Sivaram, a fellow at the Council on Foreign Relations, in his latest book Taming the Sun.

Significantly enhancing the supply of renewable sources will place growing pressure on wholesale energy prices across the board, especially squeezing the profits of inflexible generators like solar, wind, and nuclear, according to a Lawrence Berkeley National Laboratory study released last week. If solar produces 30 percent of the grid’s demands and wind supplies 10 percent, the prices for energy from those sources will fall 39 percent in the New York market in 2030, and 27 percent in California, the researchers discovered.

Here at HahaSmart, we are committed to increasing solar energy into the grid, and you can do your part.  A revolution takes time to finish, so be part of the solar revolution today, and you will find savings on your energy bills.

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