Is it the best of times or the worst of times for solar in LA? The LA Times recently ran a story about the hurdles homeowners face in getting their systems approved. According to that story, the situation has led some solar companies to avoid the city altogether.
But a report released today by J.R. DeShazo, Director of UCLA's Luskin Center for Innovation, paints a different picture. And both situations reflect different realities in the City of Angels.
LA FiT delivering on its promise
The report claims that the city’s new rooftop solar feed-in tariff (FiT) program, known as FiT 100, is a resounding success. According to the report, the program is delivering on its promise to bring cost-effective, clean power to tens of thousands of Los Angeles Department of Water and Power (LADWP) customers. And the program, researchers say, is ready for a significant expansion that would bring even greater benefits to Angelenos.
"Rooftops of office buildings, warehouses and apartments within the Los Angeles basin are proving to be outstanding sites for solar power plants," according to Brad Cox, Chairman of the Los Angeles Business Council Institute. "With about 10,000 acres of rooftops in Los Angeles, we think the sky is the limit for the solar FiT program."
Under the FiT program, electric power generated by solar rooftop installations on office and retail buildings, warehouses, and apartment complexes is sold to the LADWP for use by its residential and business customers.
The UCLA researchers conducted numerous interviews with primary stakeholders, including solar developers and participating property owners. Then they evaluated the two initial phases of the program, representing about 40 MW of solar power. These two allocations had a total of 256 program applications.
The research team concluded that the FiT 100 is on track to deliver 100 MW of carbon-free energy by 2015 – enough to power more than 21,000 homes annually.
And that’s not all. The program is also on track to deliver on the jobs, economic, and sustainability goals outlined when city officials approved it in 2012. In addition, the power cost – averaging 15 cents per kilowatt-hour – is lower than that of any other similar FiT program in North America.
"The Los Angeles Business Council has been one of the strongest advocates for a viable feed-in-tariff program to produce 100 megawatts of solar electricity," said L.A. City Councilmember Mitchell Englander. "Together the City of Los Angeles and the LABC have made great strides towards our efforts to reduce the City's dependency on coal, moving away from centralized generation toward a more distributed model while creating thousands of local jobs in the process. Although the first and second tranches were successful, this study highlights an opportunity to make the process more user-friendly and cost-efficient in the future."
Once the full FiT 100 program is in place, the UCLA research team estimates that as many as 2.7 million tons of greenhouse gases will be displaced from the environment every year. That’s especially significant in a city long known for its smog. "Imagine taking away the emissions from about half a million cars annually. That's what this solar program is on track to deliver by replacing dirty, coal-fired power with clean, renewable solar power," said Evan Gillespie, Western Region Deputy Director of the Sierra Club.
In addition to clear environmental benefits, the installation of the first 40 megawatts is on course to generate 862 jobs, and the full 100 MW program is expected to create more than 2,000 jobs – 1,370 direct jobs plus 785 more indirectly related to the program, according to the UCLA study. The FiT 100 is also expected to deliver approximately $300 million in direct investment in the City of Los Angeles by solar companies and other businesses involved in the program.
"The UCLA findings on the FiT program's launch provide the hard economic and environmental data that city officials need to justify expanding the program," said L.A. City Councilmember Paul Koretz. "We have the potential to scale this program like no other city in America, and the environmental and economic benefits will be impressive in their size and scope for decades to come."
The UCLA analysis also shows the benefits of solar FiT to diverse communities throughout Los Angeles. Applications received for the first two waves of the program came from each of L.A.'s 15 City Council districts, with the largest number coming from the sun-rich San Fernando Valley and others from South Los Angeles. The FiT is seen by many as a geographic complement to the LADWP's existing net metering solar program, whose participants are largely on LA's west side.
"Every community should benefit from this rooftop solar program, and so far it's clear that effective rooftop solar can create opportunities in every part of the city," said Manuel Pastor, Director of USC's Program for Environmental and Regional Equity. The FiT's early installations are spread around the city: an apartment building in North Hollywood, the Southern California Trophy Company's 20,000-square-foot production facility in downtown Los Angeles, and a warehouse in Chatsworth. Numerous other projects are set to go live in 2014.
At the request of the LABC, the USC Program for Environmental & Regional Equity is evaluating how the FiT can maximize its economic impact locally, especially on hiring and investment in low-income communities. The USC study is scheduled to be released at the 2014 LABC Sustainability Summit in April.
For now, the UCLA research team identified ways to improve several aspects of the program, especially as it scales to 100 MW and then to 600 MW:
To incentivize small projects, the LADWP should consider differentiating the tariff paid to small and large project categories. That could improve the financial viability of small projects. Another solution may be to increase the size range for a small project.
To create more certainty for solar companies and building owners, the LADWP should anticipate costs to connect the new solar arrays to the electrical grid.
The city's Building & Safety Department should issue clearer guidelines and a resources manual to make the permit process more streamlined and efficient.
The LADWP should extend its FiT contracts from 20 to 25 years. Doing so will help the utility secure renewable energy for a longer time period and assist solar developers in improving financing terms.
Awareness of the program should be increased, to incentivize more building owners to make their rooftops available for solar projects.
"Los Angeles is quietly building the model, commercially-scalable rooftop solar program in the country, yet very few building owners know about it," said Mary Leslie, President of the Los Angeles Business Council. "The solar firms did a good job of approaching building owners in the first two phases, but we think it's critical for the city to build greater awareness so more building owners can evaluate if this solar program is a good fit. The more they know about it, the faster the program can grow and meet its full potential."
It's also important for those outside of LA to see how successful this kind of program can be. Perhaps when they see the potential and the benefits, more cities will follow suit.