The Los Angeles Department of Water and Power (DWP) announced Tuesday that it was assessing 26 bids for solar power production under the utility's fledgling Feed-In Tariff (FIT) program. Winning bidders will be able to sell their solar electricity to DWP, at the agreed-upon price, for up to 20 years.
FITs, which provide a strong incentive for small-scale installations of rooftop solar and other renewables, are largely credited for the explosion in solar power capacity in Germany, Spain, Australia, and other countries. "This is a significant step toward enhancing the amount of solar energy produced in Los Angeles," General Manager Ronald O. Nichols said in a DWP press release. "We are very encouraged by the strong showing of well-priced proposed projects in the first round of bidding. "
RelatedBecome an Expert: Watts and Watt-Hours, Kilo and Mega
What Are? PACE Loans, Feed-In Tariffs and Net Metering
In the current demonstration phase of the project, DWP will award FIT contracts for no more than 10 megawatts of solar. The utility plans to embark on its full FIT program later this year. "We are starting small to make sure we get it right," said Nichols.
He isn't kidding. The full 150 megawatts planned for FITs by 2016 is only about a fortieth of the utility's peak demand (generally around 6,100 megawatts), and an even smaller proportion of DWP's 7,200 megawatt generating capacity. DWP customers used about 10 million megawatt-hours of coal-fired power in 2010, and a full 150 megawatt FIT would provide no more than three percent of that amount of power over the course of a year -- likely less. Three percent is also the proportion of Los Angeles' available rooftop acreage suitable for solar that the 150 megawatt FIT could harness, according to a Los Angeles Business Council study released earlier this year.
But journeys start with small steps. LADWP already plans to increase its FIT to 600 megawatts by 2020, four times its target for 2016. Depending on the eventual price per kilowatt-hour, DWP's program could provide something between a modest and substantial push for Los Angeles' rooftop solar industry.