Dec 13, 2019

PG&E electricity shut-offs drive Californians' interest in solar power

Photo: Andrew Aitchison/InPictures via Getty Images

The solar industry came out with new data yesterday showing record residential installations in the third quarter, edging out prior highs in 2016.

The intrigue: One part of the quarterly report that caught my eye confirms that PG&E's power shut-offs are driving interest in solar-plus-battery systems, though the real effect won't be known for a while.

By the numbers: Overall, the U.S. residential market grew by 712 megawatts of installed capacity as 15 states saw their biggest gains ever.

  • The total solar market grew by 2.6 gigawatts of capacity, up 25% from the prior quarter, according to the Solar Energy Industries Association and Wood Mackenzie Power & Renewables.

Where it stands: Let's look at California, the biggest U.S. market where nearly 300 megawatts of residential capacity was added in Q3.

  • One driver of the record residential growth there is demand stemming from looming state mandates for solar deployment in new homes.

Why you'll hear about this again: The report says an "unexpected" driver of demand is "increased consumer interest in solar and solar-plus-storage options in response to dissatisfaction with California utilities."

  • "This disaffection has a long history but most recently stems from Public Safety Power Shutoffs (PSPS) which have left hundreds of thousands of utility customers without electricity, often for days at a time."
  • It's the latest sign of forecasts that the outages will spur battery sales.

What we're watching: How much this might help juice deployment in the future.

  • Wildfires and the risks to power supply — and the potential for planned blackouts — have been a known in California for quite a while, so that has likely led to some sales that are showing up in the Q3 numbers.
  • But PG&E's massive intentional outages to cut fire risks began in October, so analysts will have a much better sense of their impact on solar-plus-storage purchases in data that's not captured in this report.

The big picture: The report's finding of growing interest in solar and batteries stemming from the outages is consistent with prior signs of this trend.

  • Last month, for instance, Sunrun's CEO said on an earnings call that customers are increasingly choosing their "Brightbox" service that combines solar with batteries.
  • The Wood Mackenzie report also notes that national media attention to the shut-offs is increasing interest in solar paired with batteries outside the state.
  • Greentech Media reported yesterday that California regulators are shifting the focus of an existing distributed generation incentive program to "giving battery-solar backup systems to those at greatest risk of wildfires and blackouts."

But, but, but: The preemptive power outages are spurring interest in backup power in several forms.

  • This NBC News piece is among several of late about consumers' snapping up fossil fuel-powered home generators.

Go deeper:

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Why U.S. homeowners consider going solar

Forty-six percent of U.S. homeowners say they have seriously considered installing solar panels at their homes, a new Pew Research Center poll shows.

Why it matters: It signals that the residential solar market has lots of room for growth. The survey notes that only 6% of homeowners polled have already installed systems — but the Solar Energy Industries Association's (SEIA) current estimate sits at 2.1%.

Go deeperArrowDec 20, 2019

PG&E settles with California regulators as fire victims deal approved

Fire burns near power lines in Montecito, California, Dec. 16, 2017. Photo: Robyn Beck/AFP via Getty Images

Pacific Gas & Electric (PG&E) reached a proposed $1.7 billion settlement with state regulators and had a revised $13.5 billion agreement for people impacted by California's fatal 2017 and 2018 wildfires approved Tuesday, AP reports.

Why it matters: The steps mark significant progress for the utility as it seeks to emerge from bankruptcy in the coming months, after Gov. Gavin Newsom rejected its financial rehabilitation plan Friday for falling "woefully short."

Go deeperArrowDec 18, 2019

California governor blocks PG&E bankruptcy plan

Gov. Gavin Newsom. Photo: Jane Tyska/MediaNews Group/The Mercury News via Getty Images

California Gov. Gavin Newsom notified Pacific Gas and Electric that he rejected the utility's bankruptcy plan on Friday, The Washington Post reports.

Why it matters: Newsom said PG&E falls "woefully short," lacking critical accounting and safety measures, corporate governance and capital structure requirements in the state's new wildfire liability law. The governor's rejection is a blow for PG&E, as the company hopes to emerge from bankruptcy in the coming months and begin compensating wildfire victims, the Post notes.

Go deeperArrowDec 14, 2019