The Los Angeles Department of Water And Power (DWP), the nation's largest municipal utility, is making progress signing up participants in its pilot feed-in tariff (FIT) program for distributed solar power. Under the pilot program, DWP will set up FIT contracts with producers of up to 10 megawatts of urban solar power; as of last week, according to a participant in the program, the utility had found 7 megawatts' worth of participating generators -- about a tenth of one percent of the utility's power portfolio.
Under a feed-in tariff program, a utility enters into long-term contracts to buy power generated by its customers at a premium, standard price per kilowatt-hour. The intent of FITs is to promote investment in renewable energy. FITs for small-scale solar are the most common. FITs differ from "net metering" in that a FIT participant can sell more power to the utility than they consume, while a net metering program participant can merely run their electric meter back to zero.
The best-known FIT program is that run by Germany, which derived 20% of its 2011 energy consumption from renewables, 70% of which was covered under the country's FIT. As of June Germany had 28 gigawatts of solar PV hooked up to its grid, much of that capacity covered under the German FIT.
Clearly, DWP has a long way to go to catch up. A recent addition to the LADWP's feed-in tariff program, the green building contractor CSI, will be plugging 4,000 solar panels in Harbor City into DWP's distribution grid.
The utility plans to bump the FIT's cap to 150 megawatts in four years. DWP plans to pay larger participants up to 30 cents per kilowatt hour, and smaller generators between 13 and 20 cents -- a differential some critics have said provides insufficient incentives for residential rooftop solar installations, especially considering their higher installation cost per watt of capacity.