Is the feed-in tariff coming to LA?

Los Angeles has been toying with the idea of a Feed-in-Tariff since 2009 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 utilities pay residents and businesses for all solar energy they generate.  This is different from net metering which gives customers a credit for excess energy during the next billing cycle but does not pay them fair market value for excess energy at the end of the year.

For solar advocates, the FiT is the holy grail–by paying people to generate solar power, a FiT encourages people to build larger systems than they need and to utilize warehouse rooftops, iconic hillside signs and other available spaces.  With a FiT, producing solar energy becomes not merely a means of saving a few hundred dollars on electricity but, rather, a lucrative financial investment.  FiTs are popular in Europe and Australia, but the only U.S. FiTs are in Hawaii, Vermont and Gainesville, Florida.

A report produced last week by the LA Business Council documents the enormous environmental, financial and economic benefits a FiT would reap: In ten years, a FiT would yield 600 megawatts of solar energy (3% of the city’s energy needs), 11,000 new local 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 for LADWP ratepayers?  Yes indeed, ratepayers will be hit with a budget-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 from volatile natural gas contracts.  48 cents?  I know it will be hard to make do without those extra three ounces of Gatorade each month, but where 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 rooftop solar capacity spread over the rooftops of single family homes, multi-family residences, commercial and industrial facilities, and government agencies.  That means LA could meet a fourth of all of its electricity needs with distributed solar power–that’s not even counting the massive utility-scale solar projects being built in the desert.  And the carbon savings?  Well, let’s just say my calculator can’t handle the math.

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

–Erica Etelson