Department of Agricultural and Resource Economics

The sharp decline in the cost of solar photovoltaic (PV) technology has led to a dramatic increase in its global deployment over the past decade. In California, a pioneer in renewable energy adoption, solar generation has increased nearly ten-fold, creating significant challenges for grid integration—most notably exemplified by the so-called “duck curve.” This review examines the state’s evolving strategies for managing an increasingly solar-dominant grid in a cost-effective manner. We highlight two key strategies. First, with procurement mandates and rebate incentives, California has strategically invested in and expanded battery energy storage systems, enabling the capture and dispatch of excess solar power during peak net load hours as a cleaner and more flexible alternative to natural gas. Second, electricity interchange, through the real-time Western Energy Imbalance Market, has enhanced operational flexibility and supported more efficient solar integration in California. Despite this progress, long-term challenges remain for fully replacing the state’s natural gas generation with clean, dispatchable alternatives.