New proposal seeks to encourage solar panels on LA rooftops, parking lots

Ambitious goals Los Angeles city officials have set for solar energy remain out of reach. Changes in leadership at the L.A. Department of Water and Power have slowed renewable energy policies. So has the domestic economy. Now the DWP is floating a new proposal designed to encourage solar farms on large rooftops and parking lots.

A bird flying over the L.A. Department of Water and Power’s territory would see 465 square miles, densely packed with buildings. Atop the houses, some rooftops hold panels that capture energy from the sun.

But the DWP’s Ahn Wood says the incentive program that put solar on those houses hasn’t landed them on the biggest rooftops in the L.A. basin. "The missing link that we have right now are apartment buildings," Wood says. "They have a tough time applying to the solar incentive program. And customers that have large rooftops but do not have the demand necessary." A program she's managing aims to change that.

That program has its roots in a 21-year old German policy to encourage solar farms on large buildings: in English, Germany's law enabling the purchase of power from large rooftops translates as “feed-in tariff.” Mike Webster, DWP's assistant director for power system planning and development, says California law now requires that utilities do something like that. "With a feed-in tariff, what’s happening is they’re building solar on a rooftop or a large commercial type building and then they’re feeding it to the grid," he says. "So we’re buying it directly and then we’re redistributing it to our customers."

DWP plans to buy solar energy generated on big buildings under long term fixed-rate contracts. These projects would be at least 5 times bigger than most residential solar systems, and they’re different from home systems, where the electric meter spins forward and back. Webster says feed-in tariff contracts offer more predictability as DWP tallies its energy resources.

Local businesses recognize the value too. "Those are the ones that will generate the most jobs for the least amount of incentive price. We get the best bang for the buck, so to speak, on those projects," says Mary Leslie, with the Los Angeles Business Council. The LABC's a coalition of private companies, nonprofits and schools that have pushed the DWP to develop a feed-in tariff policy for years. Leslie says its incentives will appeal to businesses in solar hotspots – the San Fernando Valley, the west side, Hollywood, and east LA. "It’s an opportunity to take advantage of the federal tax credits and depreciation and to have solar installed on their roofs and reduce their electric bills and potentially generate a new source of income, making their rooftop now an asset."

Leslie also argues the feed-in tariff could spur local grown in the clean tech sector - juicing LA’s coffers if large local solar projects take off. City officials acknowledge the DWP as an economic driver.

But at a state senate hearing last month, DWP's Mike Webster said this kind of system creates a new market for power. That’s tricky business; it's gone wrong in other places. "What we’ve learned across the world is that a feed-in tariff price that is too high can put significant financial strain on agencies, countries even, and also locally, if we see a feed-in tariff price that is too low may have a long queue, but solar doesn’t actually get built."

How much to pay for solar energy is only one thing the DWP’s cautious about. Reliability's another. Webster says the utility designed its grid to send power to homes and businesses. It’ll take different engineering to deliver electricity in the other direction on transmission lines. "We have to be very, very careful that, especially on a Sunday afternoon, the power surges don’t come back through the grid, popping transformers and overloading circuits and taking parts of our city down," Webster says.

The LA Department of Water and Power has written rules to allow a 10 megawatt demonstration program for a feed-in tariff. The LABC's Mary Leslie approves. A study her group released with the UCLA Luskin Center for Innovation concluded that a full 600 megawatt feed-in tariff program would create up to 18,000 jobs. Leslie says LA’s got the people to fill them. "We have an extremely well-trained workforce in Los Angeles of solar installers, technicians and project managers. This workforce really actually needs more work."

The demo program puts LA on a path toward at least 75 megawatts of new local solar power. Leslie says she hopes the DWP’s proposal will be a good start. Water and power commissioners and the LA City Council plan hearings on a feed-in tariff program within the next month.

Correction: The original version of this story incorrectly identified the UCLA Luskin Center for Innovation and misattributed a quote to Randy Howard that was spoken by Mike Webster.