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In sunny California, solar panels are everywhere. They sit in dry, desert landscapes in the Central Valley and are scattered over rooftops in Los Angeles’s urban center. By last count, the state had nearly 47 gigawatts of solar power installed — enough to power 13.9 million homes and provide over a quarter of the Golden State’s electricity.
But now, the state and its grid operator are grappling with a strange reality: There is so much solar on the grid that, on sunny spring days when there’s not as much demand, electricity prices go negative. Gigawatts of solar are “curtailed” — essentially, thrown away.
In response, California has cut back incentives for rooftop solar and slowed the pace of installing panels. But the diminishing economic returns may slow the development of solar in a state that has tried to move to renewable energy. And as other states build more and more solar plants of their own, they may soon face the same problems.
“These are not insurmountable challenges,” said Michelle Davis, head of global solar at the energy research and consulting firm Wood Mackenzie Power and Renewables. “But they are challenges that a lot of grid operators have never had to deal with.”
Solar power has many wonderful properties — once built, it costs almost nothing to run; it produces no air pollution and generates energy without burning fossil fuels. But it also has one major, obvious drawback: The sun doesn’t shine all the time.
Over 15 years ago, researchers at the National Renewable Energy Laboratory were in the midst of modeling a future with widespread solar power when they noticed something strange. With lots of solar power on a given electricity grid, the net load — or the demand for electricity minus the renewable energy — would take on a “U” shape. Sky-high demand in the morning would be replaced by almost zero demand in the middle of the day, when solar power could generate virtually all electricity people needed. Then as the sun set, demand surged up again.
California’s grid operator, known as CAISO, later dubbed this effect the “duck curve.” (If you squint, you can imagine the curve as the belly of a duck.) It’s most prominent in the spring months, when solar panels get plenty of sunshine but there is less demand for heating and cooling.
In recent years in California, the duck curve has become a massive, deep canyon — and solar power is going unused. In 2022, the state wasted 2.4 million megawatt-hours of electricity, 95 percent of which was solar. (That’s roughly 1 percent of the state’s overall power generation in a year, or 5 percent of its solar generation.) Last year, the state did that in just the first eight months.
Clyde Loutan, principal for renewable energy integration at CAISO, says that the state has long been prepared for more solar on the grid. But, he added, “We drastically underestimated the speed at which residential solar was going to come in.”
Curtailing solar isn’t technically difficult — according to Paul Denholm, senior research fellow at the National Renewable Energy Laboratory, it’s equivalent to flipping a switch for grid operators. But throwing away free power raises electricity prices.
It has also undercut the benefits of installing rooftop solar. Since the 1990s, California has been paying owners of rooftop solar panels when they export their energy to the grid. That meant that rooftop solar owners got $0.20 to $0.30 for each kilowatt-hour of electricity that they dispatched.
But a year ago, the state changed this system, known as “net-metering,” and now only compensates new solar panel owners for how much their power is worth to the grid. In the spring, when the duck curve is deepest, that number can dip close to zero. Customers can get more money back if they install batteries and provide power to the grid in the early evening or morning.
The change has sparked a huge backlash from Californians and rooftop solar companies, which say that their businesses are flagging. Indeed, Wood Mackenzie predicts that California residential solar installations in 2024 will fall by around 40 percent. Some state politicians are now trying to reverse 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, the executive director of the California Solar and Storage Association, said in a statement referring to California’s public utility commission.
But experts say that 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 the grid operator to be overpaying for power when they don’t have to,” Davis said.
Other states, which have been slower to adopt solar, are starting to experience the same thing. Nevada, which generates 23 percent of its power from solar, has also seen deepening duck curves. Hawaii, which has thousands of homes with rooftop solar, has cut down on the payments those households get from the grid.
Beyond the sunny West, many states are still trying to ramp up rooftop solar power and extend its reach beyond affluent households. The Biden administration announced $7 billion in grants this week to provide rooftop solar to 900,000 low-income households.
California grid operators hope that their experience will teach other states what to expect as renewables grow. “The problem we’re seeing out West — nobody else has seen this,” Loutan said.
Solar can still grow in California. In the summer, when high air conditioning use strains the grid, solar can be useful even in the middle of the day. Denholm says that as solar continues to drop in price, installing solar that is curtailed regularly can still be cost-effective. “Throwing away some amount of renewable energy can absolutely make economic sense,” he said.
But California’s grid operator still hopes to avoid it if at all possible. Loutan called it “one of the last things we want to do.”
To cope, CAISO is selling some excess power to nearby states; California is also planning to install additional storage and batteries to hold solar power until later in the afternoon. Transmission lines that can carry electricity to nearby regions will also help — some of the lost power comes from regions where there simply aren’t enough power lines to carry a sudden burst of solar.
Denholm says the state is starting to take the steps needed to deal with the glut. “There are fundamental limits to how much solar we can put on the grid before you start needing a lot of storage,” Denholm said. “You can’t just sit around and do nothing.”
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