The Los Angeles Business Council headed a coalition of business, environmental and nonprofit organizations to propose a 600-megawatt solar feed-in tariff program that can eventually produce 11,000 local jobs over the next decade.
The program is based on a report by the University of California Los Angeles’ Luskin Center for Innovation entitled Bringing Solar Energy to Los Angeles: An Assessment of the Feasibility and Impacts on an In-basin Solar Feed-in Tariff Program.
The report states that a feed-in tariff in Los Angeles will produce energy at a lower cost than other potential sources of the Los Angeles Department of Water and Power (L.A.D.W.P.) over ten years. The tariff will also provide program participants with a 5 percent to 7 percent return on their investment.
“Los Angeles is uniquely positioned to create one of the world’s most cost-effective and ambitious feed-in tariff programs because of our abundant year-round sunshine, the large prevalence of rooftop space and the ability of local business to use tax credits to cover approximately 40 percent of the cost of installing solar panels,” said J.R. DeShazo, primary author of the study and director of the Luskin Center for Innovation.
At an annual net cost of $25 million to $35 million, the feed-in tariff can be paid for within the department’s $4 billion fiscal-year budget, which usually allocates hundreds of millions of dollars for renewable energy programs.
The solar tariff can spur private investments to meet Los Angeles’ renewable energy goals by allowing residents and businesses to install solar panels and sell the power generated to the power grid. The program, which will be the largest in the United States, will also help the city meet 3 percent of its energy needs while being cost-effective for ratepayers.
The coalition claimed their proposed solar tariff will be able to operate at a significantly lower cost than other global programs. According to the U.C.L.A. study, solar panel installation costs will rapidly decrease as the price of other energy sources such as coal and natural gas rises.
In addition, the feed-in tariff program will represent a long-term political commitment to make Los Angeles more sustainable, which can attract clean technology companies to the region.
“The Los Angeles Chamber of Commerce strongly supports creating a meaningful solar feed-in tariff program this year because it will enable our utility to move onto a path of clean energy without adversely affecting ratepayers,” said Gary Toebben, president and chief executive of the Los Angeles Area Chamber of Commerce, a member of the coalition.
The coalition members see participating in the program as a way to control rising energy costs while making their properties more environmentally sustainable.
“A solar feed in tariff can serve as a nexus between the private sector, ratepayers and the L.A.D.W.P., providing a cost-effective mechanism for meeting our renewable energy goals, while saving money for businesses and bringing thousands of green jobs to our city,” said councilwoman Jan Perry, chair of the council’s energy and environment committee.
Ms. Perry, along with council president Eric Garcetti and council member Paul Koretz, already endorsed the proposal of the feed-in tariff.
The Los Angeles Business Council is an advocacy and educational organization that serves as an influential link between business and government. The council has made a major impact on public policy related to education, housing and environmental sustainability for more than 70 years.
