Skip to main content
Open Access Publications from the University of California
Cover page of The Future of California Consumer Energy Finance

The Future of California Consumer Energy Finance


Based on program analysis, literature review, expert interviews, and an October 2022 expert roundtable, this report identifies a set of conclusions and recommendations for California policymakers. We offer recommendations in distinct but overlapping areas:

• Expanding consumer energy financing programs

• Addressing the needs of lower- and moderate-income residents

• Accelerating building decarbonization toward California’s 2045 goal

• Ensuring equity in program revenue sources

• Improving program design through learning

These recommendations all reflect a core insight developed from the research and outreach process: that the enormous size of California’s building decarbonization need calls for significant infusions of private capital, and financing programs can be a mechanism to attract some of this capital. However, consumer energy finance programs are not yet operating on a scale that matches the challenge. Even at their most robust and effective these programs will likely only fund a portion of the needed retrofits and are not always appropriate for lowerincome residents, who will require access to alternative measures involving minimal or zero repayment obligations. And effectively taking advantage of newly available federal Inflation Reduction incentives will rely on state programs that facilitate layering of funds from an array of sources.

A central recommendation across this report’s sections is that state legislators and financing program administrators consider alternatives to utility ratepayer funds as the core revenue source for credit enhancement. Shifting from ratepayer funds to alternative sources including taxpayer funds, federal funds, and philanthropic sources could potentially help scale up the GoGreen Financing programs’ reach and flexibility across utility service territories, fuel sources, and eligible measures; facilitate more seamless integration with other state programs; reduce procedural barriers to rapid adaptation to market and technology developments; and advance equity by relying on a more progressive revenue source

Cover page of Cost-Benefit Analysis of Additional Energy Storage Procurement

Cost-Benefit Analysis of Additional Energy Storage Procurement


California has ambitious goals for reducing and eliminating greenhouse gas emissions from the State’s electricity system as a cornerstone of efforts to decarbonize the State’s economy more broadly. Electricity decarbonization efforts are codified by Senate Bill (SB) 100 which seeks to have 100% of retail sales of electricity by the year 2045 provided by eligible zero-carbon resources with an interim target of 60% of retail sales of electricity provided by eligible renewable resources by the year 2030. This policy contributes to a broader goal of achieving economy-wide carbon neutrality in the State by 2045, codified by Executive Order B-55-18.

Planning studies were undertaken to determine how California should proceed in terms of electricity generation and storage resource rollout to meet these goals, such as the Senate Bill 100 Joint Agency Report [1], which highlights the need for rapid renewable resource and energy storage buildout. Energy storage is typically selected as utility-scale lithium-ion batteries for short-duration storage and pumped hydropower energy storage for long-duration energy storage functions, primarily due to their relatively low cost for the former and technological maturity for the latter. Since the capacity expansion models used for such planning studies focus on minimizing cost, the recommended course from these studies focuses on lithium-ion and pumped hydropower energy storage connected as utility energy storage.

In practice, however, energy storage deployment will not be dictated by a central plan. Energy storage is being deployed to serve different priorities. Behind-the-meter energy storage may be deployed by individual residential, commercial, and industrial customers to serve their specific needs, provide electricity savings, and enable higher uptake of local renewable resources. Energy storage may also be installed at wind or solar farms to enable these to act as more dispatchable resources for the electric grid and enable them to provide electricity to the grid when they would otherwise not be generating. Additionally, other energy storage technologies such as flow batteries and hydrogen energy storage are emerging as potential alternatives to lithium-ion batteries and pumped hydropower, each with its own advantages and disadvantages in terms of technical, economic, and practical (i.e. safety, recyclability, etc...) characteristics.

Energy storage is a critical enabler of plans for complying with Senate Bill 100 and broader economy-wide decarbonization goals. Therefore, it is critical to understand the effect of alternative configurations for energy storage deployment on the broader electricity system’s ability to rely on zero-carbon electricity for meeting load, how well it can use available renewable electricity generation, and the system-wide cost of electricity.

Therefore, the goal of this project is to provide information on the preferred configuration of energy storage technologies for supporting a decarbonized California electric grid by investigating alternative configurations for the buildout of energy storage to meet California’s electricity decarbonization goals and comparing them to the configuration suggested by Senate Bill 100 planning studies.

Cover page of Deliverable Report: Cost-Benefit Analysis of Additional Energy Storage Procurement

Deliverable Report: Cost-Benefit Analysis of Additional Energy Storage Procurement


The present project aims to provide information on the preferred configuration of energy storage technologies for supporting a decarbonized California electricity system. Energy storage technologies have been identified as critical for enabling compliance with California’s electricity decarbonization goals. While lithium-ion batteries are currently the leading option for meeting energy storage needs, particularly in the near term, a diverse array of other commercial or near-commercial energy storage technologies are available that have characteristics better suited to meet the particular needs of a future electricity system.

In this context, the present project aims to determine which energy storage technologies are best suited to serve different functions required to operate a future, decarbonized electricity system in California and elucidate how energy storage technology characteristics map to their suitability for different applications. This will be accomplished by meeting the following objectives:

  Determine the net costs associated with deploying different energy storage technology portfolios to facilitate an electricity system that complies with SB 100 goals and IRP targets.

  Compare the costs and benefits associated with the use of different energy storage technology portfolios in terms of expenditures and system-wide electricity system operations.

  Determine the energy storage characteristics that are better suited for providing different grid services at a minimal net cost.

Cover page of Potential bill impacts of dynamic electricity pricing on California utility customers

Potential bill impacts of dynamic electricity pricing on California utility customers


The rapid growth of renewable generation is creating challenges for the California grid in the form of the duck curve, with increasingly steep generation ramping requirements and growing curtailment of renewable resources. In response, there has been increased discussion of promoting dynamic electricity tariffs that vary with conditions on the grid in near-real time, which could incentivize customers to shift consumption and help flatten the duck curve. Dynamic tariffs may raise concerns about financial impacts on utility customers, bill volatility, and equity issues arising from potential cost shifting among customer groups. In this report, we leverage smart meter data for more than 400,000 California utility customers to assess potential customer bill impacts arising from a multi-component dynamic tariff that is conceptually informed by the “California Flexible Unified Signal for Energy” (CalFUSE1 ) tariff structure that has recently been proposed by staff at the California Public Utilities Commission (CPUC). Specifically, we compute impacts on customer bills and bill volatility under the assumption of fully inelastic demand, i.e., where customers do not change their consumption patterns in response to the tariff. Implicit in this assumption is that even flexible loads, such as storage and EV charging, do not respond to the dynamic tariff. In practice, customers would have the opportunity to reduce their bills by modifying their consumption patterns and operational profiles of flexible devices under a dynamic tariff; thus, the results of this study represent a worst-case set of bill impacts, which could provide a useful benchmark for future studies of customer response to dynamic tariffs.

We develop a single hypothetical dynamic tariff for each IOU, which applies to all of that IOU’s customers regardless of sector or customer class. The tariff is constructed to be revenue-neutral for the utility, relative to presently active IOU tariffs, so that any increase or decrease in one customer’s bill will be offset by changes in other customers’ bills, allowing us to assess any changes in cost allocation among customer classes (i.e., “cost-shifts”) that would accompany a universal dynamic tariff. The hypothetical dynamic tariff recovers all required utility revenue through a purely volumetric energy charge (i.e., with no demand charges or fixed charges) whose rate varies hourly based on expected conditions on the grid, as reflected in the CAISO day-ahead market. 

Cover page of Evolution of the Grid to Embrace New Technologies in the Presence of Diverse Regulatory Schemes

Evolution of the Grid to Embrace New Technologies in the Presence of Diverse Regulatory Schemes


Regulatory change in Mexico and the United States, along with advances in market structures, pricing mechanisms, and technology enable electricity markets to evolve and incorporate new technologies. From the regulatory and institutional front, the U.S.has faced various levels of promotion and intervention from federal and sub-federal levels of government into balancing markets, while Mexico faces similar challenges in a more integrated way, given more recent regulatory reform and the size of its market. We address the incentive problem to “create” new markets from the transactions cost approach of how easy or difficult it is fornew renewable energy agents,incumbents, ISO/RTOs and balancing regionsto actively be part of the power markets.

Cover page of Transforming the Energy Efficiency Market in California: Key Findings, Lessons Learned and Future Directions From California’s Market Effects Studies

Transforming the Energy Efficiency Market in California: Key Findings, Lessons Learned and Future Directions From California’s Market Effects Studies


In the last three years, the California Institute for Energy and Environment (CIEE), along with the California Public Utilities Commission (CPUC), managed three market effects studies that were funded by the CPUC. This paper summarizes the key findings from these studies that focused on compact fluorescent lamps (CFLs), residential new construction (RNC), and high bay lighting (HBL)1 , with a particular focus on changes to California’s market effects evaluation protocol and lessons learned during the evaluation of market effects. This paper also summarizes the key results from a survey that was conducted by CIEE in February 2011 to determine what additional studies should be conducted in the evaluation of market effects.

Cover page of The Challenges in Training Energy Efficiency Program Evaluators

The Challenges in Training Energy Efficiency Program Evaluators


The energy efficiency services sector is an increasingly important part of the global economy, with an increased need for trained evaluators to foster energy efficiency program accountability and improvement. Organizations are experiencing difficulty in finding people who are knowledgeable about and experienced in the evaluation of energy efficiency programs. Accordingly, there is a need to assess the training needs of the energy efficiency evaluation community (for both new and “experienced” evaluators). This paper presents the results of a recent survey conducted by the International Energy Program Evaluation Conference (IEPEC) on energy efficiency evaluation training needs, and contrasts those findings with findings from a survey conducted by the American Evaluation Association on young evaluators (those people in the field less than 5 years).

Cover page of Emissions Reductions from Renewable Energy and Energy Efficiency in California Air Quality Management Districts

Emissions Reductions from Renewable Energy and Energy Efficiency in California Air Quality Management Districts


In California and other states, air quality management districts are considering using energy efficiency and renewable energy to target both criteria pollutants (to meet air quality standards)and greenhouse gas emissions. This report presents a pilot study, designed to quantitativelymodel the emissions avoided through new energy efficiency/renewable energy programs not already required by state or federal statute. This work used California as a test case, producing an analysis that could theoretically satisfy U.S. Environmental Protection Agency requirements for using energy efficiency/renewable energy in State Implementation Plan compliance. Synapse Energy Economics used a Western Electricity Coordinating Council-scale production-cost simulation model (PROSYM) to examine the impact of incremental energy efficiency/renewable energy on generation and emissions of oxides of nitrogen (NOX), sulfur dioxide (SO2), and carbon dioxide. Sixteen energy efficiency/renewable energy scenarios were tested against a reference “base case,” representing the expected structure of Western Electricity Coordinating Council in 2016 under a full implementation of the California 33 percent renewable electricity standard and other energy statutes. The scenarios were comprised of four energy efficiency/renewable energy programs (solar, wind, and both baseload and peaking energy efficiency) enacted in four different California service territories (San Diego Gas and Electric, Southern California Edison, Los Angeles Department of Water and Power, and Pacific Gas and Electric). It was observed that in many cases, a large fraction of generation was displaced out-of-state, and total NOX and SO2 displaced in California tended to be small. Generation displaced out-of-state included coal resources, and therefore resulted in far larger emissions benefits in Western Electricity Coordinating Council regions other than California. The large range ofcriteria pollutant displacement from energy efficiency/renewable energy programs across California suggests that examining output variance and uncertainty is important, and that both model construct and input assumptions are key.

Cover page of Electric-Fuel Scale-Up in California: Policy and Regulatory Support

Electric-Fuel Scale-Up in California: Policy and Regulatory Support


Advances in electric-drive technology, including lithium-ion batteries, and strong policy drivers, such as the Global Warming Solutions Act (AB 32), have contributed to a more promising market in California for the widespread introduction of plug-in electric vehicles (PEVs)—comprised of plug-in hybrids (PHVs) and battery electric vehicles (BEVs). However, significant technological, market-related, and institutional barriers remain. High battery costs, infrastructure requirements, and consumer unfamiliarity with PEVs create hurdles to the widespread commercialization of PEVs and thus shroud the extent to which the supply of electric transportation fuel (e-fuel) will need to be scaled up to meet future demand. Institutionally, uncertainties about the rate and scale of commercialization present significant challenges for strategic and regulatory planning, coordination, and policy development that will be necessary not only to support the largest possible number of PEVs, but also to maximize benefits.

This report examines the current market and policy/regulatory setting for PEV and e-fuel in California, assesses various related costs and benefits, identifies key issues and barriers to their widespread and responsible commercialization, and makes recommendations for policy development. These efforts are suggested in the interest of improving the commercialization of PEVs, thereby: helping the state meet its energy and environmental goals, providing economic vitality, and more generally helping the U.S. and the world evolve toward a more sustainable transportation future.

An additional goal of this report is to explore the argument that electricity used for PEVs should be monitored, tracked, and in various ways accounted for differently than electricity used for other uses, stemming from the fact that e-fuel substitutes directly for petroleum use and thus has the effect of significantly reducing emissions of GHGs and other pollutants in California. Differentiating e-fuel from other electricity uses would facilitate data collection and analysis of e-fuel-related investments and benefits, may be necessary for the implementation of the Low Carbon Fuel Standard program, and, lacking alternative financing schemes, would allow for the eventual make-up of road-tax revenues should PEVs become widespread.