Similar to what prospectors faced in gold mining in the late 1800s, when the solar opportunity market matures, new approaches will be required to maintain steady productivity. California (CA) is the most mature solar market here in the U.S. and new market dynamics, incentive reductions, and plummeting project build costs are driving the need for new market strategies and savvy development approaches.

As Standard Solar continues its growth in the U.S. market, we see the CA market becoming segmented in several ways. These segments range widely, as do their challenges. The first segment is the “islanded” environment in the Los Angeles Department of Water and Power (LADWP) service territory where 14 cent Feed-In Tariffs (FITs) with no escalators are still in play for projects below 150kW, but wait times for larger projects up to 3MW can be deal killers). One of the most interesting areas is the emerging agricultural market in Northern CA where Power Purchase Agreement (PPA) rates run from 10 to 16.5 cents with standard escalator ranges of 1-3 percent and PG&E net metering regulations allow site consolidation for efficient distribution to pump sites. Agriculture pumps a LOT of water so this market presents a big opportunity.

CA municipalities are responding to the Governor’s 2030 mandate and continue to be “good soil for tilling” statewide with a few exceptions. Southern California Edison (SCE) is a notable standout with many stranded projects in the death grip of impending deadlines and sluggish approvals at all levels. Many developers are avoiding SCE projects and instead focusing on the leverage from the Storage Mandate to keep the wheels turning and to stay ahead of the game. Stay tuned for this emerging market to get big fast.

As always, regardless of our current relief at the gas pump due to the global oil glut, energy costs are predicted to continue their rise with demand and inflation over the next decade. This, coupled with continued advancement in solar technology and construction advances, promises that although the solar “gold” may not still be lying on the ground in California, it is still there if you dig a little.