California has long been the United States' leader for solar energy development. According to a New York Times list published a few months ago, California has 971 megawatts (MW) of installed solar capacity. Its next closest rival, New Jersey, has about 380 megawatts. Recently, Governor Jerry Brown unveiled an ambitious new plan to achieve the statewide goal of generating 12,000 MW of renewable energy - 33 percent of total usage within the power grid, by 2020. The additional capacity will come from local renewable energy projects. A significant portion of the new capacity will materialize through significant investments in solar energy power plants.
When it deregulated utility companies in 1998, the state authorized the California Energy Commission (CEC) to operate the Emerging Renewable Program (ERP). ERP provided rebates for grid-connected photovoltaic systems less than 30 kilowatts for residential properties. The program also promoted solar thermal electric projects.
In 2006, the California Solar Initiative (CSI) transferred the energy rebate program for consumers, covering solar and other renewable energy, from the Energy Commission to investor-owned utilities - Pacific Gas and Electric (PG&E), Southern California Edison (SCE), San Diego Gas & Electric (SDG&E). The California Public Utilities Commission supervises the program.
Property owners who are customers of these companies receive cash rebates for solar power plants smaller than one megawatt. The program applies to nonprofit, commercial, industrial, agricultural, and government buildings. So far, CSI has incentivized over 924 megawatts of solar for California; it plans to reach 1,940 MW by 2016. The program runs for a total of ten years and has a budget of $2.167 billion between 2007 and 2016.
The New Solar Homes Partnership, launched in January 2007 has a $400 million budget and a goal of 400 MW installed capacity by 2016. In addition, it has the objective of providing incentives to promote high efficiency on 50 percent of solar projects in the residential new construction sector. The program applies to homes located in areas serviced by public utility companies.
In 2007, the state Senate replaced the solar component of the Emerging Renewable Program with the “Go Solar California, which promotes dual programs -- California Public Utilities Commission's California Solar Initiative and the Energy Commission's New Solar Homes Partnership, designed to increase the state's solar installed capacity. It also includes multiple solar initiatives by various public utility companies. This program has a budget of $3.35 billion and expects to create three gigawatts of additional solar capacity.
The CLEAN LA Solar Plan represents the latest initiative to come out of California to help move the state toward its goal of 12,000 renewable energy MW by the beginning of the next decade.
As California's largest city, with nearly 3.8 million people, and the second largest city in the U.S., Los Angeles (LA) has embarked on twointroduced two initiatives designed to increase the prevalence of solar energy in the city. The plan is for the city's municipal utility, Los Angeles Department of Water & Power (LADWP)to move from its coal-fired plant to meeting 40 percent of its energy needs from renewable and sustainable fuel sources, including solar energy.
The city acknowledges the FIT policies, which have fueled solar development in Germany and Spain over the last few years, have helped to formulate the local FIT policy. The Los Angeles Business Council worked with the University of California Los Angeles (UCLA) and University of Southern California (USC) to produce multiple studies on FITs and the Los Angeles market. According to the report “Designing an Effective Feed-in Tariff for Greater Los Angeles,” LA faces many of the same land constraint issues common in older urban areas of the country.
This “competing land use” makes larger solar project unfeasible. Therefore, Los Angeles's plan focuses on smaller projects including rooftops, uncovered parking lots and land around transportation facilities. The plan states that solar-energy development may be the highest and best use for this space. This closely models the same approach took by Germany, which has made the country the undisputed global leader when it comes to photovoltaic rooftop installations.
Although plenty of land exists outside the Los Angeles area for larger solar projects, the challenge with “importing” solar energy is the competition for available high-voltage transmission with other renewable energy projects. In addition, large-scale developments require more time to plan, negotiate the permit process, and develop transmission capacity. These issues limit the amount of solar energy the city can reasonably import.
In contrast, “A typical 4 kilo-watt system on a single family home in Los Angeles can produce about 5,400 kilo-watt hours per year. This is enough electricity to offset most of the annual requirements of this typical residence,” researchers stated.
Residents and property owners will earn a set price for the power produced by the rooftop PV systems building owners. In year one, residential users will pay an average of $0.18 per month. By year six, the cost escalates to $0.57 per month. Studies have demonstrated that 60 percent of utility ratepayers would agree to pay as much as $1 per month for a viable solar rooftop solar panel plan.
CLEAN LA Benefits
The CLEAN LA initiative generates enough energy to power 137,000 average-size California residences. In addition, because most of the space for rooftop installation lies within the low-income areas of the city, the residents living in these areas will receive several benefits from the program, including:
• Produce 600 megawatts of locally generated rooftop solar power
• Provide job training
• Create employment opportunities for local residents
• Subsidize utility costs for apartment dwellers
CLEAN LA could create 18,000 jobs- years. A “job- year” refers to an investment that provides full time employment for an individual for an entire year. Research also shows the plan could attract $2 billion from private investors.
The program calculates it will receive as much as $300 million in the federal tax credits to help offset installation costs for business owners by financing up to 30 percent of equipment and installation. The federal tax credit expires on December 31, 2016.
Based on figures just released, the proposal generates cost-savings for the utility consumers over the 30-year life.