Palo Alto, Calif., is getting into the feed-in tariff (FiT) game with its newly launched CLEAN (Clean Local Energy Accessible Now) program. The program offers solar power producers up to 14 cents per kilowatt hour for power produced by their system.
Under the program, Palo Alto’s municipal utility will buy all of the power produced by the system under a power-purchase agreement. System owners can choose 20-year, 15-year or 10-year contracts. Twenty-year contracts have the highest payout rate of 14.003 cents per kilowatt hour. Ten-year contracts are paid at 12.360 cents per kilowatt hour.
The city instated the solar program in an attempt to boost the amount of renewable energy generated locally, according to Jon Abendschein, Palo Alto’s utilities resource planner.
“Our goal is to get to 33 percent by 2015. There are some conversations about expanding that,” he said.
The city also offers net-metering but hopes the FiT will help entice more to add in solar.
“So far we purchased that power from sources outside Palo Alto. We wanted to see if we could get some of that renewable energy from local sources,” he said.
The FiT amount is at a small premium to the price the city paid for external sources of renewable energy generation and is close to the retail rate that residents in the city currently pay for electricity.
Including distribution and service charges, residents pay about 12 cents per kilowatt hour, according to Abendschein. However, those that participate in the program need to be ready for a metering and administration fee of $34.73 per month, which means the site must generate at least 248 kilowatt hours before it starts paying off.
The FiT is not limited to individual project size, according to Abendschein.
The overall size of the initial pilot will be 4 megawatts’ worth of solar installations, but it could grow in future years.
“We’re going to take a look at what we learn from the pilot program over the next few months and go back to city council in the fall for a recommendation for future years,” he said.
The utility will start accepting applications on April 2, 2012 and will issue the first contracts in May.