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$530 million program approved for commercial, industrial and residential solar panels

City News Service | 1/11/2013, 9:04 a.m.

LOS ANGELES, Calif.--The Board of Water and Power Commissioners today unanimously approved a $530 million program to pay approved commercial, industrial and residential property owners for electricity generated from their solar panels.

The approval to sign 20-year contracts with customers who install minimum 30 kilowatt-hour solar power systems will make Los Angeles the largest city in the nation to have a so-called Feed-in-Tariff program.

Average residential customers will pay an additional 15 cents per month on their electricity bills by 2016, when the Department of Water and Power expects to pay for about 100 megawatts of electricity from customers' installed solar panels.

The city's public utility is required by state law to have a Feed-in Tariff, or FiT, program up and running by July 1.

"We made a value judgment that 15 cents per month for our average residential customer is not an undue burden for Los Angeles to try to pave the way at a meaningful level of solar feed-in tariffs for L.A., for California and for the nation," LADWP General Manager Ron Nichols said.

However, water and power Ratepayer Advocate Fred Pickel criticized the program, saying the department is agreeing to overpay for solar energy. Under the approved plan, LADWP will pay $0.17 per kilowatt-hour for the first 20 megawatts of approved solar projects, well above the $0.125 cents the
department pays for renewable energy today. The price will go down by a penny for each additional 20 megawatts available every six months.

"I believe our pricing is far too high," Pickel said, adding that it will place undue burden on ratepayers.
"Paying more than avoided costs means we're subsidizing businesses.

Businesses are already heavily subsidized. And it's, in essence, asking for financing from 1.5 million households, 4 million people in L.A., with average household income under $50,000 to provide financing for people able to make it on their own," Pickel said.

DWP officials said the higher price was necessary to generate enough of a market to get the solar power feed-in program started. LADWP FiT Program Manager Anh Wood told the board that Palo Alto was forced to raise its pricing to $0.165 cents per kilowatt-hour for feed-in solar power after next-to-no customers applied for the program.

The approval of the FiT program was applauded by environmental groups, which claimed the program would nearly triple the amount of rooftop solar power in the city.

"Sunny Los Angeles should have solar power on every warehouse, apartment complex, parking lot and school," said Michelle Kinman, clean energy advocate for Environment California Research & Policy Center. "The commitment to 100 megawatts of rooftop solar power is a giant step towards a clean energy
future for Los Angeles."

Supporters said the program would also provide an economic stimulus and could create several thousand new jobs.

Pickel called the claim of new jobs a "red herring." There are no solar panel manufacturers in the L.A. basin, and the added cost to ratepayers for the program would cause some businesses to stop hiring or layoff workers, Pickel said.