Parking Lot Shade Structures, Commercial and Industrial Rooftops
by Bill Powers
State planners assume California will reach its ambitious decarbonization targets by developing remote, utility-scale solar and wind farms dependent on new transmission lines to reach urban centers. It is a largely unquestioned article of faith that the cheapest solar and wind power is generated at remote, utility-scale sites, and therefore the priority should be the development of these remote renewable resources. The cost of new transmission infrastructure to move this power to customers is not considered when assessing these solar and wind production costs. When it is, the most cost-effective location for solar power is on large commercial/industrial rooftops and parking lots in urban load centers. There is ample capacity in California, on the order of 50,000 MW of large commercial/industrial rooftop and parking lot solar potential, for this resource to displace much of the remote solar and wind power proposed to meet California’s target of 100 percent clean electricity by 2045.
Utilities Oppose Rooftop Solar – Unless They Own It
There are two basic locational alternatives to meeting California’s decarbonization mandate: 1) distributed solar generation located at or near the point-of-use on the distribution grid, or 2) remote, utility-scale renewable power, primarily solar power, delivered to load centers over lengthy transmission lines.
The traditional investor-owned utility (IOU) business model is antithetical to distributed generation (DG) produced by non-IOU parties. Edison Electric Institute (EEI) is the national IOU trade association. In 2012, EEI identified distributed solar generation, specifically rooftop solar, as an existential threat to the IOU business model, stating that DG solar generation heralded the prospect “of declining retail sales and earnings, (of declining) financing of major investments in T&D [transmission and distribution] . . . , (and of the) potential obsolescence of existing business and regulatory models.” EEI is the architect of attacks by IOUs across the nation against rooftop solar. California’s IOUs are major contributors to EEI, with each contributing about $2 million per year to the organization.1
California leads the nation in DG solar despite utility opposition, with over 12,500 MW of installed capacity.2 This DG solar capacity is currently growing at a rate of more than 1,500 MW per year.3 This rooftop capacity is close to the 14,000 MW peak combined output of the IOU’s (and community choice aggregators) utility-scale, transmission-dependent solar projects.4
Remote Renewable Energy Dependent on New Transmission Lines Is the Highest Cost Option
The California Independent System Operator (CAISO), the grid operator in the state, is projecting over $30 billion in new transmission construction to achieve the 100 percent clean electricity goal.5 The new lines will be built to facilitate increased utility-scale renewable power from high quality renewable energy production areas like the California deserts, the Central Valley, and Arizona and New Mexico.6 The strategic flaw in the economic argument for this approach is the failure to integrate the cost of the new transmission lines into the total delivered cost of that renewable power.
Fortunately, the cost burden imposed by new California transmission lines dedicated to transmitting solar power or wind power is known with a high degree of accuracy. The two largest renewable energy transmission lines built in California in the last decade are the 1) San Diego Gas & Electric (SDG&E) $1.9 billion 500 kilovolt (kV) Sunrise Powerlink transmission line, and 2) the Southern California Edison (SCE) $3.06 billion 500 kV Tehachapi Renewable Transmission Project (TRTP).7
Both the annualized cost of these two transmission lines and the amount of renewable energy they transmit are known. This allows calculation of the transmission cost burden on each kilowatt-hour (kWh) of renewable power delivered to customers by these transmission projects. In the case of SDG&E’s Sunrise Powerlink, the renewable energy transport cost is approximately $0.09/kWh, or $90/megawatt-hour (MWh).8 The renewable energy transport cost of SCE’s TRTP is about $45/MWh.9
How does this transmission cost compare to the cost of commercial rooftop solar? Poorly. The National Renewable Energy Laboratory (NREL) projected the 2021 production cost for a “one-off” commercial rooftop solar array to be $45/MWh.10 This is about one-half the renewable energy transport cost of the Sunrise Powerlink and about the same as the transport cost of the TRTP. In other words, the production cost of a stand-alone commercial rooftop project in 2021 is at or below the transmission cost for energy delivered by new transmission lines from remote sites. These transmission costs are in addition to the production cost of solar energy at these utility-scale sites, estimated by NREL to be about $25/MWh in 2021.11
The high renewable energy transmission costs imposed by the Sunrise Powerlink and the TRTP on remote solar and wind power are not outliers. CAISO is currently evaluating a new SDG&E renewable energy transmission project, the $3.7 billion Imperial-to-Serrano 500 kV transmission line,12 to move renewable power from remote desert sites to Southern California coastal load centers. This project would transmit up to 1,412 MW of new remote renewable power.13 This equates to a transport cost of $155/MWh, when scaling from the actual cost and quantity of renewable power transmitted by SDG&E’s 500 kV Sunrise Powerlink.14
Looked at another way, the Imperial-to-Serrano 500 kV transmission line would cost $2.6 million per MW of renewable capacity.15 From a customer standpoint – the person paying the bill – this transport cost must be added to the cost of the remote utility-scale solar or wind projects to determine the total cost of the green power.
NREL identifies the cost of new utility-scale solar (without battery storage) at $0.9 million per MW.16 The total capital investment, including generation and transmission, to produce and deliver new remote utility-scale solar in SDG&E territory over the Imperial-to-Serrano 500 kV line would be $3.5 million per MW.17
Battery storage, in 2022, must be considered a mandatory element of new solar and wind projects to assure that power from these projects is available when it is most needed.
NREL projects the cost of 1 MW of commercial/industrial building rooftop solar, with ample battery storage capacity,18 to be about $2.3 million per MW.19 This is much less than the all-in cost of remote utility-scale solar that would rely on the proposed Imperial-to-Serrano 500 kV line for delivery to customers.
Back to the Future – The Advantages of Solar Development on Warehouse Rooftops and Parking Lots
There was a time at the dawn of utility-scale solar development in California, in 2008 and 2009, when it appeared that much utility-scale solar development would occur on commercial and industrial rooftops. In March 2008, SCE proposed to build 250 MW of solar on warehouse rooftops in the Inland Empire. The project involved aggregating a large number of 1 MW to 2 MW rooftop projects. The CPUC ultimately approved a larger 500 MW SCE warehouse rooftop solar project in June 2009, stating:20
Unlike other generation resources, these (large-scale rooftop solar) projects can get built quickly and without the need for expensive new transmission lines. And since they are built on existing structures, these projects are extremely benign from an environmental standpoint, with neither land use, water, or air emission impacts.
The genesis for the focus on warehouse rooftops was former Gov. Arnold Schwarzenegger. He explained the basis for his push for warehouse rooftop solar in a speech to EPA personnel as he was leaving the governor’s office in late 2010:21
I always said that I want to fly over California with the helicopter one day and just see not rooftops but see just solar on top of rooftops just to blanket it . . . because we have so much warehouse, so many warehouses, so much warehouse rooftops in California, we should blanket them. And now they are doing that.
You can have all the renewable energy in the Mojave Desert but you still need to build transmission lines to bring it in . . . But if you have it on the rooftops of those warehouses it goes right to the grid and you don't even have to build the transmission lines.
SCE installed about 100 MW of warehouse rooftop solar before the program was modified to convert the remaining capacity to remote, transmission-dependent solar projects.22 The focus on warehouse rooftops lost its champion when Gov. Schwarzenegger left office. It is reasonable to assume that, had the warehouse rooftop program retained support at the highest levels of state government, there would now be 1,000s of MW of warehouse rooftop solar in California and substantially less pressure to build new renewable energy transmission lines to remote desert sites.
Large Commercial and Industrial Rooftop and Parking Lot Solar Potential Exceeds 50,000 MW
The CPUC determined in 2009 that there is more than 11,500 MW of large commercial and industrial rooftop capacity within three miles of IOU substations.23 Warehouses, other than high demand refrigeration warehouses, generally have low electricity demand and as a result are poor candidates for net-metering. However, they are good candidates for selling wholesale solar power directly to the grid.
There is also a vast amount of large commercial and industrial parking lot area available for solar development that was not evaluated by the CPUC. The parking lot solar potential is vast. For example, the 2019 Clean Coalition San Diego Solar Siting Survey for commercial and industrial building sites in San Diego with potential greater than 1 MW states that 75 percent of the solar capacity for large sites is parking area capacity.24 This is consistent with a 2014 Powers Engineering assessment that found California has a commercial and industrial building parking lot solar potential of nearly 40,000 MW.25
The combined large commercial and industrial rooftop solar potential (11,500 MW) and parking lot potential (39,500 MW) exceeds 50,000 MW.
With adequate battery storage to assure reliability of supply, commercial and industrial rooftop and parking lot solar qualifies for local resource adequacy (RA) payments that further reduce the net cost of DG solar production. The CPUC requires that electricity providers have sufficient reliable resources under contract to withstand peak demand conditions with some major infrastructure out-of-service, such as one or more transmission lines. Reliable resources receive RA payments to assure they are available when needed.
The least-cost utility-scale solar resource, from the perspective of the delivered cost to the customer, is aggregated large commercial and industrial building rooftop and parking lot solar connected at the distribution grid level in urban and suburban areas of California. This resource is plentiful, with over 50,000 MW of potential capacity. It can be built quickly, without expensive new transmission lines, and is environmentally benign. With effective political leadership the state can “blanket” warehouse rooftops and parking lots with solar panels, and in the process protect desert lands from high-cost and unnecessary renewable energy development.
Southern California Edison - 100 MW rooftop. Photo: Borego Solar
Target net zero energy store in Vista, CA. Photo: Target
Bill Powers is a registered professional mechanical engineer in California with 40 years of experience in energy and environmental engineering. He has written numerous articles on the strategic cost and reliability advantages of local solar power over large-scale, remote, transmission-dependent renewable resources, and he frequently appears as an expert witness on alternatives to conventional power generation infrastructure.
1) B. Powers, Local clean energy or remote – who wins the battle?, Clean Coalition webinar, June 23, 2021, p. 3: https://clean-coalition.org/news/webinar-remote-or-local-clean-energy-generation-who-wins-the-battle-wednesday-23-jun-2021/.
2) California Distributed Generation Statistics, accessed June 24, 2022: https://www.californiadgstats.ca.gov/.
3) California Distributed Generation Statistics, Stats & Charts, 2021 capacity additions, accessed June 18, 2022: https://www.californiadgstats.ca.gov/charts/.
4) CAISO, Today’s Outlook - Renewables trend, June 11, 2022: https://www.caiso.com/todaysoutlook/Pages/supply.html.
5) CAISO, Draft 20-Year Transmission Outlook, February 7, 2022, p. 17: http://www.caiso.com/InitiativeDocuments/Presentation-Draft20-YearTransmissionOutlook-Feb072022.pdf.
6) Ibid, p. 11.
7) CPUC, Utility Costs and Affordability of the Grid of the Future, February 2021, Table 10: Large CAISO-approved Transmission Projects, p. 38.
8) PCF February 22, 2022 Local Clean Energy Forum: https://www.protectourcommunities.org/news/local-clean-energy-forum. $254 million/yr ÷ 2,873,543 MWh/yr (1,264 MW of solar and wind) = $88.4/MWh.
9) B. Powers, Local clean energy or remote – who wins the battle?, Clean Coalition webinar, June 23, 2021, p. 12.
10) NREL, U.S. Solar Photovoltaic System and Energy Storage Cost Benchmark: Q1 2020, January 2021, pp. 102-103, Attachment B [Commercial Rooftop (200 kW), High resource (CF 20.4%), ITC] https://www.nrel.gov/docs/fy21osti/77324.pdf; NREL press release, New Reports From NREL Document Continuing PV and PV-Plus-Storage Cost Declines, November 12, 2021: https://www.nrel.gov/news/program/2021/new-reports-from-nrel-document-continuing-pv-and-pv-plus-storage-cost-declines.html.
12) CAISO, Transmission Capability Estimates for use in the CPUC’s Resource Planning Process, July 19, 2021, Table 3-1: Updated transmission capability estimates, p. 6: http://www.caiso.com/Documents/WhitePaper-2021TransmissionCapabilityEstimates-CPUCResourcePlanningProcess.pdf.
14) [($3.7 billion ÷ $1.883 billion) x $254 million/yr] ÷ [(1,412 MW ÷1,264 MW) x 2,873,543 MWh/yr] = $155/MWh.
15) $3.7 billion ÷ 1,412 MW = $2.6 million/MW.
16) NREL press release, New Reports From NREL Document Continuing PV and PV-Plus-Storage Cost Declines, November 12, 2021: https://www.nrel.gov/news/program/2021/new-reports-from-nrel-document-continuing-pv-and-pv-plus-storage-cost-declines.html. Cost of 100 MW single-axis tracking solar = $0.89/Wdc ($890,000/MWdc).
17) $2.6 million/MW (transmission) + 0.9 million/MW (solar generation) = $3.5 million/MW.
18) battery storage capacity = 2.4 MWh.
19) NREL, U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks: Q1 2021, Figure 20 (collocated PV plus battery, direct current coupled), November 12, 2021, p. 32. The solar dc-to-ac conversion efficiency is assumed to be 90 percent (to convert dc capacity to ac capacity). $2,055,000/MWdc ÷ 0.9 ac/dc = $2,283,000/MWac.
20) CPUC press release, CPUC Approves Edison Solar Roof Program (June 18, 2009), available at https://docs.cpuc.ca.gov/PublishedDocs/WORD_PDF/NEWS_RELEASE/102580.PDF. (Attachment 36).
21) EPA press release, Governor Schwarzenegger honored with EPA's Climate Change Champion Award, December 2, 2010: https://archive.epa.gov/epapages/newsroom_archive/newsreleases/a90a6d9e480abd14852577ed00741e9e.html; complete speech (Vote Smart): https://justfacts.votesmart.org/candidate/public-statements/29556/arnold-Schwarzenegger.
22) CPUC, D.16-06-044, Decision Granting (SCE) Petition for Modification and to Terminate the Solar Photovoltaic Program, June 23, 2016: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M164/K022/164022163.PDF.
23) E3 and B&V, Summary of PV Potential Assessment in RETI and the 33% Implementation Analysis, CPUC Re-DEC Working Group Meeting, December 9, 2009, p. 24. Total Statewide Large Rooftop Potential = 11,543 MW.
24) Clean Coalition, San Diego Solar Siting Survey, Task 2.2, Final Summary Report: Solar Photovoltaic (PV). Commercial-Scale Sites for 1,000 kWac and Larger, September 2019, p. 10. “. . . parking lots and parking structures represent approximately 75% of the potential found in this survey . . .”
25) Basin & Range Watch Comment Letter to the DRECP, DRECP: The Better Alternative, January 30, 2015, Attachment - Parking Lot Solar Potential in California: https://www.basinandrangewatch.org/DRECP-CEESP-Alternative.html. Parking lot solar potential in California = 39,500 MW.