http://www.sustainablebusiness.com/index.cfm/go/news.display/id/23572
04/04/2012 12:10 PM ShareThis
Los Angeles Approves Solar Feed-In Program
SustainableBusiness.com News
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, the largest municipal utility in the US. The program has a
cap of 150 megawatts (MW), which will provide electricity for about 35,000
homes.
That's a tiny program, but it's a start.
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.
Besides being a tiny program, there are other criticisms. Paul Gipe
notes, "The program is not a feed-in tariff by international standards." It
only goes through 2016, not long enough to provide a long term signal to
investors.
"Some of the briefing documents clearly describe an auction or bidding
program to allocate contracts in the 10 MW program," Gipe says. For example,
contracts will be awarded to the "lowest bidder". This is the antithesis of
a feed-in tariff which offers a publicly posted price to participants in an
open and transparent manner.
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:
Website: www.sustainablebusiness.com/index.cfm/go/news.display/id/22666
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