LA solar plan would not hit utility bills, study claims

April 6, 2010

As the city of Los Angeles debates the costs of home based renewable power, a new study is being presented today, which suggests that a solar feed-in tariff system could be set up without a major cost to bill payers.

The study from the LA Business Council and the UCLA Luskin Center for Innovation said a system could be set up that would generate 500MW of solar power within a decade.

The research being presented at the 4th Annual LABC Sustainability Summit today suggests that at a cost of just $23 million a year, the city could meet 3% of its electricity needs from thousands of small solar systems.

Feed-in tariffs are above-market rates paid by a utility to a home or business for generating renewable electricity and feeding power into the grid. The system has seen success in European countries like Germany.

The LABC-UCLA study suggested that a program based on a feed-in tariff would create 11,000 “green” jobs and reduce energy costs for those taking part.

LABC President Mary Leslie. “The findings in our study validate an ambitious Feed-in Tariff as one of the smartest investments Los Angeles can make to create a cost-effective, locally generated source of solar energy and grow our green economy.”

LA’s City Council, Mayor and Department of Water and Power Commission have been embroiled in debate over how to wean the city off its coal dependency.

Last month saw Mayor Antonio Villaraigosa proposing a $2.50-$3.50 “carbon surcharge” on city electricity bills to fund a solar feed-in tariff (see this BrighterEnergy.org story).

The proposal has been met with a frosty reaction from some quarters, as the city pulls itself out of the economic downturn.

“Cost-effective”

The LABC-UCLA report was based on economic modelling and interviews with local businesses and residents. It suggested that feed-in tariffs would “unleash a new source of cost-effective solar energy”.

If the correct design guidelines are put in place, ratepayers will save money over the life of a ten-year FiT program” - Professor JR DeShazo, UCLA

Ms Leslie said regardless of the outcome of the talks between city council, mayor and DWP, there would only be “limited resources” available for renewable energy programs.

A system that delivers immediate results would therefore be needed if any “meaningful impact” is to be achieved, she said.

The study suggested that utilities would save money on transmission costs by having energy generated where it is most needed.

“If the correct design guidelines are put in place, ratepayers will save money over the life of a ten-year FiT program as the cost of installing solar panels continues to fall and the price of fossil fuels rises,” said UCLA Professor JR DeShazo, who oversaw the study and serves as the Director of the UCLA Luskin Center for Innovation.

“Moreover, developing the country’s largest Feed-in Tariff would signal a long-term political commitment to greening Los Angeles that could be used as an incentive to attract clean-tech firms to our region and keep them here.”

Jobs

A well-designed FiT would offer real incentives for local businesses to green their operations” - Brad Cox, Trammell Crow Company

The study recommended following the German model in setting out local procurement requirements in order to attract companies to locate in the area and create jobs.

A feed-in tariff scheme in Gainesville, Florida, started in 2009, saw participation goals achieved in just one week.

Businesses in LA have shown they would be on board a scheme in their home city.

“A well-designed FiT would offer real incentives for local businesses to green their operations, achieve significant reductions in operating costs and receive a return on the capital invested in installing solar panels,” said Brad Cox, Senior Managing Director for Trammell Crow Company.

“This is a clear opportunity for collaboration between business and government to meet our renewable goals by capitalizing on our region’s abundant sunshine and thousands of acres of available rooftop space.”

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http://www.getsolar.com/blog/solar-power-rundown-for-tuesday-april-6/5406/ Solar Power Rundown for Tuesday, April 6 | GetSolar.com Blog
[...] The Los Angeles Business Council and UCLA’s Luskin Center for Innovation have release a new study examining the implications of a solar feed-in tariff (FIT) for Los Angeles County. I haven’t had a chance to comb through Designing an Effective Feed-in Tariff for Greater Los Angeles (PDF) in its entirety, but, like any good blogger, I’m brash enough to offer my first impressions. If you’re looking for a detailed benefit-cost analysis or specific policy recommendations, this report ain’t it. You’ll have to wait for a follow-up report, to be “issued at a later date.” If you’re looking for an overview of general guidelines of how a feed-in tariff might look in L.A., however, then the Business Council’s and UCLA’s report is worth a read. Among the most interesting and surprising findings? A solar feed-in tariff would not increase customers’ utility bills, as explained by UCLA Professor JR DeShazo: “If the correct design guidelines are put in place, ratepayers will save money over the life of a ten-year FIT program,” via BrighterEnergy. [...]