'FiT' for Solar: Los Angeles Takes Another Step Toward Green Energy
Germany does not get much sun—it receives about as much sunlight as cloudy Seattle. Yet in the decade from 2000 to 2010, it installed seven times more solar power than the United States. Over that decade, Germany was the world leader in building a solar industry that grew by an order of magnitude, creating hundreds of thousands of local jobs. It did so with a single, powerful policy instrument—the feed-in tariff, a predictable premium that solar owners could expect their utility to pay for the clean energy they generated.
Here in Los Angeles, we receive around twice the sunlight as Germany, and solar panel prices have dropped to near grid parity levels in the last few years. There was no excuse for waiting any longer, and I directed the Los Angeles Department of Water and Power, along with our small businesses and world-class universities, to design a Feed-in Tariff for Los Angeles.
Last week we rolled it out, a 100MW program that’s the first in the nation for a major city.
The Feed-in Tariff, or “FiT,” will create jobs, foster a cleantech industry, and bring green energy to Los Angeles. The cost to ratepayers? Pennies on their monthly bill.
We designed it using best practices. Feed-in tariffs in Palo Alto and Southern California Edison, priced at 14 and 12.5 cents/kWh respectively, failed to generate much interest—they didn’t reward folks for fronting the start-up costs of clean energy. LA’s FiT starts at 17 cents, a much more attractive proposition. But our price doesn’t stay there. We learned from Germany’s example—they reduced their rates over time, to encourage innovation in the marketplace and reduce the cost of solar. We do the same, ratcheting down the price every six months so our ratepayers aren’t overburdened.
As a result, LA’s FiT has generated immense support from both the environmental and business communities. To prove our commitment to bringing solar to everyone who wants it, we’ve set aside 20 percent of the program to smaller installs less than 150kW. I’m confident that solar installers will relocate and set up shop right here in LA; that small businesses and multifamily residences will generate their electricity from the sun; and that ratepayers will take pride in a city that runs on clean energy.
The FiT is an integral element of our broader campaign to make LA a hub of cleantech innovation and deployment. Creating a local market for solar panels is just one of the many initiatives we’re pursuing. The LA Cleantech Incubator will spawn new technologies capable of reducing the cost of energy generation, storage, and conservation. We’re deploying 52,000 smart meters and retrofitting small businesses to save electricity; and every traffic signal and streetlight will house a low power LED bulb by the time I leave office. We’re creating a virtuous cycle in which the more cleantech we implement, the more we encourage innovation and small business, and the lower we drive prices.
Advancing the local economy and protecting the environment go hand in hand, and Los Angeles has a sustainable record second to none. Working together, the City has reduced overall greenhouse gas (GHG) emissions by nearly 30 percent, cut air pollution in half at the Port of Los Angeles, quadrupled the City’s use of renewable energy, increased recycling rates to over 70 percent, and opened over 650 acres of parkland. This latest initiative continues our commitment to building a clean energy future right here in LA—a city FiT for solar.
Photo courtesy of Wikimedia Commons