LA Returns To Solar Concerns

The Los Angeles Department of Water and Power (LADWP) announced a proposal to re-launch its Solar Incentive Program (SIP) with double the funding levels for the next three years, an improved customer experience and revised incentive levels to be more in line with market pricing and allow greater participation by customers who want to go solar. In a presentation to the Board of Water and Power Commissioners, LADWP General Manager Ronald O. Nichols and Aram Benyamin, Senior Assistant General Manager, Power System also reviewed elements of a proposed new Feed-In Tariff (FIT) Program that will enable third parties to sell renewable energy to LADWP's citywide electric grid. State legislation, SB 32, calls for utilities to offer a 75 megawatt FIT program.

“During public workshops, we heard overwhelming support for expanding local solar power, including fully funding the SIP and launching a Feed In Tariff program, to benefit customers, the environment and the green economy in Los Angeles. These two initiatives, if approved, will work together to expand renewable energy within our service area and contribute to our renewable energy goal of 33 percent by 2020,” Mr. Benyamin said.

“The revised SIP proposal is designed to incentivize as many customers as possible to go solar, while also being prudent about the cost, which is funded by all customers who pay for this program through their rates,” Mr. Nichols said.

LADWP will hold a public workshop to discuss both customer-based programs and receive input from customers and other stakeholders on Thursday, July 14, from 2 p.m. to 5 p.m., at LADWP downtown headquarters, 111 N. Hope Street, Los Angeles. Both proposals are subject to review and approval by the Board of Water & Power Commissioners.

Facing a record demand for solar rebates, LADWP placed the Solar Incentive Program on temporary hold April 8, 2011, for a minimum of 90 days to revise the program guidelines, identify alternative funding, and catch up with a growing backlog of rebate applications that was outpacing the annual budget by 3 to 1, and to clear a backlog of inspections and growing safety concerns, following record demand associated with favorable federal tax incentives combined with LADWPs exceptionally high incentive levels, which made it more affordable than ever for more customers to install rooftop solar panels.

Based on the State's SB 1 “Million Solar Roofs” legislation, SIP provides financial incentives to LADWP customers who purchase and install their own solar photovoltaic systems. The program is known as “net metering” because solar customers receive credit on their bill for excess energy that is generated by their system but not needed for their household.  The credit can be used at a later time when the customer consumes more energy than their solar system generates, such as during the hot summer months.

LADWP's solar rebates have been historically high compared to major California investor-owned utilities to increase customer participation. The proposed revised incentive levels would be adjusted to be consistent with the California Solar Initiative, which is better aligned with existing solar markets and achieves a reasonable payback period for customers.

“Our rebates for residential, commercial, government and non-profit customers will still beat the state incentive levels when you consider that LADWP will continue offering a higher incentive to customers who elect to sell their Renewable Energy Credit to LADWP,” said Lorraine Paskett, Senior Assistant General Manager, Sustainability Programs and External Affairs.

After receiving public comment and input through the July 14 public workshop, LADWP expects to seek Board approval and City Council review of the revised SIP Guidelines in early August, with the goal of restarting the program in September.

LADWP's proposed FIT program initially seeks to install 75 megawatts of distributed renewable energy that could enable a third party, such as a solar developer or customers, to capture federal tax credits and help create a sustainable market for green energy. Targeting mid-size renewable energy projects within LADWP service area, LADWP would buy the power generated by solar panel systems under a Standard Offer Power Purchase Agreement for a negotiated fixed price and period of time. LADWP proposes to begin FIT with a 5 megawatt demonstration program this fall.  The demonstration program will enable LADWP to adjust and refine its program based on actual experience. 

“We want Los Angeles to have a successful Feed-In Tariff program that enhances the future for local solar expansion.  A demonstration program is key to that success,” added Mr. Nichols.