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Los Angeles should adopt solar feed-in tariffs

The Los Angeles Business Council has released a study on the cost-effectiveness of generating electricity through a solar feed-in tariff (FiT).

“In the search for clean energy solutions, new public policies are creating incentives for solar energy throughout California,” explains Designing an Effective Feed-in Tariff for Greater Los Angeles.

Governor Arnold Schwarzenegger has approved an executive order which mandates a 33% renewable energy standard by 2020; the California Solar Initiative provides incentives to producers of solar energy; while SB1 extended incentives to customers of public utilities. Last year, Los Angeles mayor Antonio Villaraigosa released a long-term comprehensive solar plan to meet the future clean energy needs of the city.

“As demonstrated in other cities throughout the world, feed-in tariffs can incentivise investment in solar infrastructure, stimulate local economies and create prevailing wage jobs,” it explains. “However, implementation in other jurisdictions has also demonstrated how FiTs can create market barriers that inhibit solar technology and its associated economic benefits.”

Last September, the LABC created a Solar Working Group of local leaders in the private, environmental and educational sectors, to investigate the promise of a local feed-in tariff programme. It commissioned the UCLA Luskin Center for Innovation to conduct the study, to offer guidelines for feed-in tariff design.

Follow-up study to provide details on solar feed-in tariff

The group will issue a follow-up study that evaluates alternative programme designs and solar feed-in tariff rate structures, estimating the participation rates and the amount of solar energy generated by different feed-in tariff programmes.

The final results will be designed for policymakers to design a solar feed-in tariff policy that “spurs lasting economic development and significantly increases the solar energy generated in Los Angeles to meet regional renewable energy goals.”

Success of feed-in tariffs in other jurisdictions should that benefits of an effectively-designed programme are:

  • Produces significant number of in-basin high-wage jobs;
  • Quickly generates energy to meet renewable energy goals;
  • Taps the unused solar generation capacity of homes, businesses and parking lots;
  • Reduces utilities’ out-of-basin transmission costs and peaking costs; and
  • Signals a commitment to developing a local green-technology sector.

“The solar power that it produces is an expensive type of renewable energy to generate,” the report explains. “So, in the many places around the US and world where feed-in tariff policies are adopted, policy makers place a priority on creating local high-wage jobs, supporting local green businesses and expeditiously meeting their renewable energy goals.”

Solar feed-in tariff has decades of experience

“FiT policies have several decades of history from which to draw lessons (and) Los Angeles can learn from implementation both in the US and abroad,” it concludes. Last year, 45 countries and 18 US states or Canadian provinces had feed-in tariff policies, and the group examined 6 jurisdictions to show how Los Angeles should plan its policy.

“FiTs are not blunt policy instruments,” it adds. “In order to achieve their stated goals, not only must they be informed by over arching policy goals, but also they must be carefully crafted through expert judgment and learned adaptation.”

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Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity