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Los Angeles DWP to again offer solar rebates

The plan, suspended because money ran out, involves smaller rebates and higher rates. Customers who generate extra power could sell it to the utility. Commission and council approval are required.

July 15, 2011|By Ashlie Rodriguez, Los Angeles Times
  • Daniel Morabito works on a solar panel installation at a Los Angeles home in 2009. The DWP rebate program began in 1999.
Daniel Morabito works on a solar panel installation at a Los Angeles home… (Allen J. Schaben, Los Angeles…)

Los Angeles once again will pick up part of the tab for residents who want to go solar.

The Department of Water and Power announced at a public workshop Thursday the relaunch of its Solar Incentive Program, which offers rebates to businesses and homeowners who generate their own electricity.

The program, which began in 1999, was suspended in April because a flood of applications caused funding to run out. The DWP originally budgeted $30 million for the initiative, but about $112 million in rebate requests poured in from those keen to install solar panels in order to cut their power bills and help the environment.

During the program's three-month hiatus, the department formulated a plan to pay for $60 million in rebates over the next three years with future revenue collected from ratepayers, who can expect their monthly bills to go up $4.59 on average by 2016.

In addition to the solar incentive, the DWP on Thursday outlined another program, called the "feed-in tariff," that allows customers who do not use all the energy generated on their rooftops to sell it back to the utility. The feed-in tariff will work primarily for larger installations, such as commercial and warehouse rooftops.

"These two initiatives, if approved, will … contribute to our renewable energy goal of 33% by 2020," DWP Senior Assistant General Manager Aram Benyamin, told about 135 homeowners, solar system contractors, activists, government workers and business owners who showed up for the first of four planned workshops at the agency's downtown headquarters.

To stretch its funding through the end of the program and allow more ratepayers to participate, the DWP will reduce the size of the rebates. For an average $32,000 solar power installation, the program previously covered up to 50% of the costs for commercial customers and 45% for residential buildings. Officials said the new rebate levels would be determined on a case-by-case basis — taking into account variables such as how much time a building's roof is shaded — and did not specify reimbursement rates.

Trying to lessen the blow of lower rebate levels, officials pointed out that many solar companies currently allow homeowners to finance their systems over several years, thus eliminating hefty upfront costs.

And customers can receive credit on their monthly DWP bill for energy generated but not used. This "net metering" credit can be cashed in when customers consume more energy than their solar systems generate, such as during the hot summer months.

"One of the reasons solar incentive is so popular in Los Angeles is because it essentially pays your electric bill," said Evan Gillespie of the Sierra Club.

Another factor that should help conservation-minded consumers is a drop in the price of solar equipment.

"These prices mean that in a sunny region, solar power can be generated for $0.18 per kilowatt from large projects and $0.20 per kilowatt from retail rooftops," said Michael Liebreich, chief executive of Bloomberg New Energy Finance. "Compare that to daytime electricity prices in some markets equivalent to $0.20-$0.25, and you can see things are about to get really interesting."

More than 40% of the DWP's electricity currently comes from coal-fired power plants outside California, which are a major source of air pollution as well as greenhouse gases.

David Graham-Caso, a Sierra Club official for the L.A. Beyond Coal campaign, predicted Thursday that once the alternative-energy market takes off, solar technology prices will drop and eventually make rebates unnecessary.

"In the short term, the program requires investment," Graham-Caso said. "But over time it will save money, create jobs and move us away from coal."

Of the estimated 60,000 homes statewide with solar panels, fewer than 2,000 are in Los Angeles.

"I think this is going to be a much bigger program than anyone expects," Gillespie said. "And the bigger it gets, the more affordable it will be for everyone to participate."

Both the solar rebate and feed-in tariff proposals must be approved by the DWP's board of commissioners and the City Council.

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