Los Angeles has approved a solar feed-in tariff (FIT), the first large city in the US to do so.
Feed-in tariffs are the most effective way to quickly expand renewable energy because they allow solar system owners (homeowners and businesses) make money by selling energy to the grid under a long term contract.
Under the CLEAN LA program, solar energy will be sold to the Department of Water and Power – it has a cap of 150 megawatts (MW), which will provide electricity for about 35,000 homes.
Research by the Los Angeles Business Council, which has been advocating for the program since 2009, shows CLEAN LA will create 4,500 solar jobs, generate $500 million in economic activity and offset 2.25 million tons of carbon dioxide emissions by 2016.
Most of LA’s renewable energy comes from outside the city right now. By incentivizing local solar production on the city’s vast, unused rooftops, the result will be more efficient power delivery and meaningful local jobs in solar sales, installation and maintenance.
The Board of Water and Power Commissioners is expected to quickly approve a 10 MW demonstration project and the first 75 MW are expected to come on line this year, with an additional 75 megawatts expected by 2016.
“We have the largest underutilized rooftop capacity in California, and one of the sunniest cities in the country. This is a smart, cost-effective method for businesses to create economic opportunity while weaning ourselves off the coal-fired plants that generate most of the city’s power,” says Brad Cox, Senior Managing Director of Trammell Crow Company, a commercial property owner.
“Los Angeles’ energy mix leads to significant carbon pollution, waste ash and other toxic byproducts. By contrast, the CLEAN LA Solar plan will provide renewable energy that’s reliable, affordable, and sustainable. Better yet, we’re investing money back in local businesses across the city to produce clean energy, rather than sending money out-of-state to pay for dirty coal,” says Bill Corcoran, Western Director of Sierra Club’s Beyond Coal campaign.
Currently, San Diego leads California with the most solar PV installed, which doubled over the past two years.
California FIT Moves Ahead
Enacting a robust FIT in California to achieve the state’s 33% Renewables Portfolio Standard (RPS) would create three times the number of jobs, over $2 billion in additional tax revenue, and stimulate tens of billions in new investment, according to a University of California, Berkeley study.
Adoption of a comprehensive FIT would ensure that the 33% RPS goal is met on schedule and cost-effectively.
Initial FIT legislation passed in 2008 that’s been largely ineffective. Several laws have passed since then improving on it, which it looks like the California Public Utilities Commission (CPUC) is finally ready to move forward on.
CPUC says it will raise the maximum size of eligible facilities to 3 MW and adjust the pricing mechanism. Part of the problem has been the market-based pricing system, which unlike successful programs like Germany’s doesn’t set a consistent price based on the type of renewable energy.
The new mechanism still seems overly complex. It will be modified monthly and the starting price will be based on the highest contract bid through auction. There will also be adjustments for time-of-delivery of the energy.
The program is also capped at 750 MW, which is way too low to meet California Governor Jerry Brown’s goal of add 12 GW of renewable energy by 2020.
California already has enough renewables on tap to get 33% by 2020. 7.99 GW is online, pending or authorized, more than half the 12 GW, making it feasible to double that goal.
Read about the advantages of a Germany-style FIT for California: