In Focus: The LA Solar Incentive and FiT Programs 1

For those of you who may not know, the Los Angeles Department of Water and Power has developed a Solar Incentive Program (SIP) to support solar energy in Los Angeles. This Solar Incentive Program can help you with the cost of installing a new solar system.  The Solar Feed-in Tariff Program, which allows owners of large-scale on-grid solar systems to sell back unused energy, is currently in the works.

This Solar Incentive Program was created to help meet the aim of Senate Bill 1, which is essentially an extension of the California Solar Initiative (CSI) and the Energy Commission’s New Solar Homes Partnership (NSHP).  Basically, the goal of this program is to promote solar for LADWP customers to help California reach its energy goals.  By providing a financial incentive to homeowners who install on-grid photovoltaic systems, LADWP hopes to encourage homeowners to invest in solar energy.
LADWP customers who have photovoltaic systems installed can receive a lump sum payment upfront based on the anticipated performance of their new system. To calculate an estimate of the Expected Performance Based Buydown (EPBB), LADWP’s website has an online calculator. This provides an idea of the energy production, annual kWh, CEC-AC rating, Design Factor, CSI rating, and incentive amount.  With this information, LADWP is able to figure out how much money to pay the customer upfront.
There are benefits that go beyond this one-time payment.  According to the LADWP website:

“Customers who qualify and complete an installation are provided with a ‘net meter’.  When a customer’s solar system produces more energy than they use, the excess energy is calculated as a credit on their bill, and their meter will run backwards.”

This means that when an LADWP customer’s solar system is producing excess energy, it goes back into the grid.  The meter runs backwards and LADWP is then able to credit their customers with energy towards their electricity bill.
Conversely, LADWP is presently developing another system to promote the use of solar technology through the Solar Feed-in Tariff Program, also known as the CLEAN LA Program.  Though Solar Incentive Program customers are not qualified for the CLEAN LA Program, this particular program is designed primarily for larger-scale commercial use.
Through this Feed-in Tariff system, customers who produce 30kW and higher, can enter a contract to sell 100% of the energy produced at their facility to LADWP at a fixed rate for up to twenty years.

Here’s a brief run-down of how the preliminary stages function:

application process: To qualify for this program, applicants must go through a six-week application process.  Applicants provide the base price for the energy, proof of site control, and complete facility and one-line diagrams.  They must also provide a 24 hour by 12 months expected energy profile, provide necessary documentation, and pay an application fee depending on the scale of their project. For small systems, of 30kW-150kW, the application fee is $500. For large-scale projects between for 151kW and 999kW, the application fee is $1,000.

interconnection process:  After the prospective seller has completed the application process, they enter an interconnection agreement, which includes an interconnection study fee of $750 for small projects or $1500 for large projects.

moving forward with agreements: Applicants then submit a development deposit of $50 per kW, a 10% interconnection cost deposit, insurance forms, and LA city business compliance forms.  This is when the applicant signs the standard offer PPA.  LADWP then sets the fixed rate contract that matches the price that was previously offered by the applicant.  Both the interconnection agreement and the standard offer PPA are executed at this point.

Moving forward, it is now the seller’s responsibility to acquire the requisite permits and follow through with construction of their project.

monthly payments: Once the project is completed, a reliable revenue meter is provided, with which LADWP can calculate the monthly payments for the seller. The seller receives an invoice of the energy monthly payments from LADWP based on the amount of energy sent through the revenue meter. These payments are based on the sum of Facility Energy collected by the hour, which is determined by multiplying each hour by the base price of the energy and the time-of-delivery.  This means that sellers will receive more money for energy produced during peak hours of the day.

It is important to note that a separate metering system is installed to account for the energy used at the seller’s facility.  The power needed to run the facility is taken from the grid itself, rather than from the power that is produced on-site because 100% is sold to LADWP.

It is the seller’s responsibility to maintain their own facility according to the contract and provide LADWP with an inspection report every two years.

One thing that’s great about both the Solar Incentive Program and the Feed-in Tariff is that they both promote the development of clean, local energy.

Whether you’re thinking about installing a solar system for your home to take advantage of the SIP or you are planning a large-scale operation for the Feed-in Tariff Program, we are here to help you.

If you have any questions, feel free to give us a call at (866) 798-4435.

If you’re living in Los Angeles and you’re thinking about getting started with solar energy, be sure to go to

Original Article on Go Green Solar

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1 Comment

  1. The FIT or Feed-in-Tariff scheme is a highly successful model, nowadays, utilized in various parts of the world, where solar installations are showing high levels of acceptance among homeowners and commercial installers. LA’s Department of Water and Power has developed a Solar Incentive Program (SIP), which is similar to the “Clean Energy Cashback” program introduced by the Labour Government, in the United Kingdom, back in 2010. I believe, beside the LADWP initiative, the CLEAN LA Program is also promising, especially for large-scale commercial installers. I too agree with you that both LADWP program and CLEAN LA initiative will promote the development of clean, local energy. Thanks for this informative post.

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