Renewable Energy

California has set ambitious goals for increasing its share of renewable energy sources, including a target set in 2018 to reach carbon neutrality by 2045. In August 2022, the California Legislature passed Senate Bill (SB 1020), setting interim targets of 90 percent clean electricity by 2035 and 95 percent by 2040.118 Although California has surpassed the interim goal of having at least 33 percent of electricity generated from Renewable Portfolio Standard (RPS)-eligible sources, at the current annual growth rate of 3.4 percent, California is at risk of missing the 50 percent RPS goals by 2026. It will take California an additional three years to reach the 2026 target at the pace of the most recent five years. The percentage of total power mix from renewable sources rose 0.5 percent in 2021, and historically, the fastest growth happened from 2015 to 2016. Since 2017, California’s generation has slowed and has been slower than the growth in the rest of the nation.

The prolonged droughts in a third consecutive year have caused California’s reservoirs to dry up. According to the National Oceanic and Atmospheric Administration (NOAA), 2022 is on track to be the driest year in the 128 years of precipitation recorded in California due to severe droughts and warmer weather.119 To offset the lost hydroelectric power, California now imports 30.1 percent of its electricity supply from neighboring markets, with about 61 percent of that coming from the Southwest and 39 percent from the Northwest. Moreover, recognizing offshore wind as a critical clean energy resource to diversify California’s in-state clean energy power mix, new planning goals for offshore wind were announced on May 6, 2022.120 The California Energy Commission (CEC) set targets of 3,000-5,000 megawatts (MW) by 2030 and 25,000 MW by 2045 as part of the adoption of Assembly Bill 525 (AB 525). So far, that is the most ambitious goal for offshore wind deployment in the U.S.121

While California is in a leading position to reach its renewable targets, challenges remain as more wind and solar enter the power mix. The federal government has taken actions to facilitate the transition towards a 100-percent clean energy future through the Inflation Reduction Act (IRA). Signed in August 2022, it provides $385 billion in funding for clean energy production to address climate risk over the next decade. It extends tax credits for clean electricity generation and investment from renewable sources through 2024.122 Moreover, the California battery storage industry proliferated in 2021. The cumulative installed battery storage in 2021 increased more than 7.5-times the previous year—a record high. These efforts helped mitigate the stress on energy demand as well as grid reliability, as more installed capacity and new clean energy resources came down on the pipeline.

Renewable Electricity Generation and Power Mix
  • The percentage of total power mix (in-state generation plus imports) from renewable sources rose 0.5 percent to 33.6 percent in 2021. At the current pace of growth, California is at risk of missing the 50 percent Renewable Portfolio Standards (RPS) goal by 2026.

  • Electricity generation from renewables exceeded 93,000 gigawatt-hours (GWh) in 2021, but has not significantly increased since 2018. The increase in total RPS percentage is due to the decrease in imports from natural gas—9.1 percent lower than in 2020 and 11.2 percent lower than in 2019—resulting in an overall 45 percent decrease from 2020, and offsetting the smaller increase captured in the in-state generation sector. For reference, California imported in total of 7,925 GWh from natural gas from other states in 2021.

  • The ongoing drought significantly hampers electricity generation from hydroelectric. Small hydro’s share of generation in 2021 (1% of generation mix) is one of the lowest since the RPS program’s inception in 2002. Ongoing generation from hydroelectric is expected to remain low, as long as the drought persists, and California will likely be forced to buy more power from neighboring states.

  • Despite having a similar share of renewables, imports from the Southwest are more carbon intensive due to their higher percentage of generation from coal (17% in 2020) compared to Northwest imports (0.5%) and in-state generation (0.2%).

  • Electricity generation from RPS-eligible renewable sources and large hydroelectric made up 42.9 percent of the power mix in 2021, a slight decrease from the 45.3 percent in 2020 and 46.3 percent in 2019. Electricity generation from these sources made up 34.8 percent of total in-state generation in 2021—a significant decrease from 33.3 percent in 2020. Both decreases are mainly due to the drought. Both decreases are mainly due to the drought.

  • Of the utility-scale power plants that came online after 2010, California added more capacity from solar than any other sources. As of May 2021, the power plant additions primarily came from solar and wind, at 0.9 and 0.3 gigawatts (GW) respectively, while the power plant retirements solely came from solar resources at 0.3 GW.

  • For California to meet its 2026 goal of 50 percent of generation from RPS-eligible renewable sources, the share of electricity generation from renewables would need to increase by 8.3 percent each year from 2021 to 2026, revised upward from the 6.1 percent annual growth rate previously predicted in 2018.

Renewable Portfolio Standards (RPS) and Community Choice Aggregators (CCAs)
  • In 2021, total estimated annual load in Community Choice Aggregations (CCAs) in California increased 1.38 percent over 2020’s annual load, serving over 11 million people in California. One of the oldest members of the CCAs, Marin Clean Energy (MEC), has signed the most long-term energy contracts, committing over 900 megawatts—more than 400 megawatts of its renewable capacity went online in 2020.

  • In 2021, three community choice aggregators—MCE, East Bay Community Energy, and Silicon Valley Clean Energy—issued $2 billion in bonds to pay upfront for about 450 MW of renewable energy. It is expected to reduce power costs by $7 million a year in the first five to ten years.

  • Oregon extended and strengthened its previous reduction goals (requiring a 10 percent reduction in average carbon intensity of fuels) to a long-term target of 25 percent of the electricity generated from renewable sources by 2025 and 50 percent by 2040.

Distributed Energy Resources and Renewable Energy Curtailment
  • Since 2018, the residential sector has experienced the most rebate-qualifying distributed energy resources (DERs), mostly for electrochemical storage technologies (such as lithium-ion battery storage). Previously, commercial and government sectors had the most rebate-qualifying DERs.

  • Under the Self Generation Incentive Program (SGIP), California added 77.4 kilowatt-hours (kWh) of energy storage capacity across all sectors in 2021, with the government sector adding 46.7 percent of the energy storage capacity. The capacity added in 2021 represents a 56.3 percent decrease over the capacity added in 2018 (116.4 kWh).

  • In California, both wind and solar curtailments have been rising every year from 2018 to 2022 to-date, driven by growth in the amount of solar power additions to meet the state’s aggressive clean energy goals. As of October 2022, curtailments reached a new high in 2022—totaling 2,356 gigawatt-hours (GWh) of electricity generated with 115 GWh from wind and 2,241 GWh from solar). This is 56.6 percent more than the total amount in 2021, with 57.1 percent more curtailment in solar and 47.5 percent more in wind.

  • According to S&P Global Market Intelligence, the California ISO (CAISO) is expected to add an additional 9,172 megawatts (MW) of net nameplate capacity measurement units in 2022, largely lithium-ion batteries and solar photovoltaics installed together. Developers intend to add some 2,524 MW of new CAISO-connected battery power capacity in 2022, approximately doubling total installed battery power capacity in 2021. Over the 20-year planning period, more than 6,300 MW of planned solar is expected to come online, as well as 320 MW of wind energy and 60 MW of geothermal.124

Renewables Interconnections and Installations
  • Interconnected distributed generation within the three investor-owned utilities service territories totaled 1,595 megawatts (MW in alternate current) in 2021, an 18.7 percent increase from 2020. Residential continues to be the largest sector, accounting for 72 percent of the interconnected distributed generation installed (1,148 MW) in 2021. Due to low statewide participation, SGIP increased the incentive in 2020 to encourage new applications.

  • As of 2021, California accounted for 41 percent of small-scale solar photovoltaic (PV) net generation in the residential sector nationwide. The state also accounted for 31 percent in the commercial sector (which includes government),125 and 72 percent in the industrial sector.

  • In 2021, cumulative installed capacity from wind totaled 6,281 MW in California, an increase of 4.9 percent from 2020 (5,982 MW). Meanwhile, the rest of the nation continued adding wind capacity at a nice pace (12,448 MW) in 2021.

  • More than 4,000 MW of battery storage has been installed in California ISO territory. The state projects more than 48,000 MW of battery storage and 4,000 MW of long-duration storage will be needed by 2045.126

  • Under California’s landmark 2019 energy storage procurement mandate (AB 1144), investor-owned utilities have already surpassed the 2024 procurement target of 1,325 MW of installed energy storage capacity by 78 percent.

  • To address grid reliability concerns and incorporate the additional energy, the 20-year transmission infrastructure projects needed in the next two decades have been identified. From the base portfolio 2031 to 2040 (using SB 100 starting point scenario), renewables resources and battery storage are expected to grow by an average of 346 percent, while pumped hydro and long-duration energy storage share the same growth rate of 538 percent and dominate the growth plan.


118 “SB-1020: Clean Energy, Jobs, and Affordability Act of 2022.” California State Legislature. Available at:

119 U.S. Department of Commerce, National Oceanic and Atmospheric Administration. June 2022: U.S. dominated by remarkable heat, dryness. July 11 10, 2022. Retrieved from:

120 The California Energy Commission. Offshore Wind Energy Development off the California Coast: Maximum Feasible Capacity and Megawatt Planning Goals for 2030 and 2045.August 02, 2022. Retrieved from:

121 “AB-525 Energy: offshore wind generation.(2021-2022)” California State Legislature. Available at:

122 TechTarget. Inflation Reduction Act boosts clean energy incentives. September 1, 2022. Retrieved from:

123 “Inflation Reduction Act (IRA) Summary: Energy and Climate Provisions.” Bipartisan Policy Center. August 4, 2022. Available at:

124 S&P Global Market Intelligence. Outlook 2022: Solar, battery storage spark CAISO capacity surge. April 13, 2022. Retrieved from:

125 EIA Commercial Sector Data glossary:

126 California Energy Commission Approves $31 Million for Tribal Long-Duration Energy Storage Project. November 3, 2022. Retrieved from: