One of the largest solar installations in the world is the result of a program sponsored by the city of Los Angeles that incentivizes commercial property owners in the nation’s second largest city to install solar panels on the roofs of their buildings.
PermaCity, an LA-based solar energy design and installation company, has completed about a half dozen projects included under the purview of the city’s Feed-in Tariff (FiT) program. Permacity recently completed the Westmont Solar Energy Project in San Pedro, which is one of the largest solar installations worldwide, the installation spans several distribution warehouse rooftops and totals over 50 acres in size.
The Westmont installation is dwarfed in size only by the solar installation on the Apple campus in Cupertino. But Herb Mendelsohn, a senior salesperson and project development officer with PermaCity said the Westmont project will ultimately produce more power than the Apple campus's solar installation.
The city’s FiT program, which was launched as a pilot program with city council approval in 2012, creates incentives for commercial property owners to install solar installations on the roofs of their buildings and then sell the power generated from those installations to the LA Department of Water and Power at a fixed rate of 14.5 cents per kilowatt hour for a 20-year period.
William Zhang, an electrical engineering associate said the majority of the program’s property owners lease their roof space to a third party company that’s then responsible for the up-front costs associated with the solar panel installation and maintenance, and they also reap the income benefits of energy sales to the public utility. More rarely, he said, a commercial property owner will hire a company like PermaCity and pay for the installation themselves.
Both city officials and Mendelsohn said the generous price the city pays for solar-generated power coupled with a federal solar tax credit -- dubbed the investment tax credit -- that allows businesses to deduct 30 percent of the cost of installing a solar energy systems from their taxes makes the program a win-win for private entities and the public utility.
The FiT program is a small component of an overall strategy to reach a goal of generating a third of LA’s power from renewable sources by 2020, and over 50 percent by 2030, said Yamen Nanne, solar programs manager for the LADWP. He said the mayor and city council have taken state-mandated renewable benchmarks a step further to require that 65 percent of the city’s energy come from renewables, including solar, wind and hydropower, by 2036.
To date, 71 distinct commercial entities have applied for projects through the FiT program, Zhang said. That figure includes both solar projects in development and ones that have been completed.
Once the pilot program reaches its 150 megawatt limit and all projects are online, the total energy generated would be enough to power roughly 45,000 households in LA, Nanne said.
The Los Angeles Business Council (LABC) has studied the FiT program extensively and was part of a coalition of environmental groups, scholars and labor unions that urged the city council to approve the program five years ago, according to LABC president Mary Leslie. The LABC, a business advocacy organization focused on energy, environmental and economic sustainability, has in the years since served as a facilitator for the program between businesses and the LADWP, Leslie said.
In addition to business owners, the program has also benefited workers in the solar industry, Leslie said. “We like this program because we thought it created jobs in the clean energy sector for people who had already been trained here,” Leslie said. “We knew we had the capacity.”
Michael Zarabi, co-owner of Felina Lingerie, said he hired PermaCity to install approximately 1.5 megawatts of solar on the roof of one of the company’s buildings in the San Fernando Valley. For the past two years he’s sold the energy the installation generates back to LADWP through the FiT program. He said he plans to install more panels under the purview of the city's FiT program on the company's other buildings.
“I could help the environment by having solar panels, I saw that as a huge plus. At the same time, I was able to basically rent out space that I wasn’t using on the building to make some extra income,” he said.
The money generated isn’t a vast sum, he said, but the installation “basically pays for itself.”
While projects like Westmont are huge accomplishments and drive awareness for the program, Nanne said the intent of FiT is to encourage production of renewable energy through a series of smaller scale projects scattered across the city.
“Our intent is to have this program accessible to multiple commercial customers,” he said. “Ideally, we’d like projects all over the city of LA.”
More projects are currently in the FiT pipeline, including planned solar installations for 15 to 20 warehouse buildings located in the Port of Los Angeles, according to Nanne. He said those projects are currently in the design and engineering phase.