Is the Feed-in Tariff Coming to LA?

13 July of 2010 by

hollywood sign1 Is the Feed in Tariff Coming to LA?

Los Angeles has been toying with the idea of a Feed-in-Tariff since2009 when Mayor Villaraigosa announced his goal of making LA a coal-free city by 2020.  A Feed-in-Tariff (FiT) is a system in which utilitiespay residents and businesses for all solar energy they generate.  Thisis different from net metering which gives customers a credit for excess energy during the next billing cycle but does not pay them fair marketvalue for excess energy at the end of the year.

For solar advocates, the FiT is the holy grail–by paying people togenerate solar power, a FiT encourages people to build larger systemsthan they need and to utilize warehouse rooftops, iconic hillsidesigns and other available spaces.  With a FiT, producing solar energybecomes not merely a means of saving a few hundred dollars onelectricity but, rather, a lucrative financial investment.  FiTs arepopular in Europe and Australia, but the only U.S. FiTs are in Hawaii,Vermont and Gainesville, Florida.

A report produced last week by the LABusiness Council documents the enormous environmental, financial andeconomic benefits a FiT would reap: In ten years, a FiT would yield 600megawatts of solar energy (3% of the city’s energy needs), 11,000 newlocal green jobs and a 5-7% return on investment (ROI) for participants(not a bad ROI compared to the topsy turvy stock market).

But wait, critics cry, won’t a FiT amount to a hefty price hike forLADWP ratepayers?  Yes indeed, ratepayers will be hit with abudget-busting 48 cents per month for the first ten years of the program and, thereafter, will see savings as LADWP is able to move away fromvolatile natural gas contracts.  48 cents?  I know it will be hard tomake do without those extra three ounces of Gatorade each month, butwhere there’s a will, there’s a way.

The report also puts forth the Solar Stunner of the Summer:  The City of Los Angeles has approximately 5,536 megawatts of physical rooftopsolar capacity spread over the rooftops of single family homes,multi-family residences, commercial and industrial facilities, andgovernment agencies.  That means LA could meet a fourth of allof its electricity needs with distributed solar power–that’s not evencounting the massive utility-scale solar projects being built in thedesert.  And the carbon savings?  Well, let’s just say my calculatorcan’t handle the math.

The LA Business Council has assembled an impressive coalition insupport of the FiT, including the LA Chamber of Commerce, the SierraClub, LA Family Housing and Global Green USA.  It’s not too often thatwe see businesses and non-profits backing the same measure and, when wedo, it’s a good sign that the proposal would have widespread benefitsand negligible drawbacks.  Click here to join the Solar FiT Coalition. Go Solar LA!

–Erica Etelson

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