Having aimed for Valentine’s Day and missed, those Cupid’s helpers over at LADWP have transmogrified themselves into lucky Leprechauns as they reset their sights onto everyone’s favorite feast day, Saint Patrick’s Day (aka, March 17 for the uninitiated).
Somewhat less tongue-in-cheek, DWP has announced that the third 20 MW tranche of solar project allocations under LA’s Feed-in Tariff (FiT) will open for applications on Monday, March 17. Under their guidelines, all applications received by Friday, March 21 will be assigned a sequence number and then a lottery will be held to allocate the 20 MW among the applicants. LADWP has some updated materials on their FiT website (access it here), but no key to what changes have been made (the proposed changes were very modest) and a promised Frequently Asked Questions section is still to come.
This third tranche has been delayed for weeks while DWP staff prepared their changes.
During the February 18 Board meeting to discuss changes to the program, Staff’s suggestion on how to move things along was to impose a 10-business day deadline to cure deficiencies in FiT application paperwork. Of course, that is the same amount of time that LADWP gives contractors to cure deficiencies in residential solar rebate applications—even though LADWP has taken five times as long to identify those “deficiencies." Given the far greater complexity with the FiT paperwork requirements, we can only hope that LADWP’s review of that paperwork is more insightful and the subsequent interactions more collaborative.
Happy St. Paddy’s Day!
Everyone in the solar industry is focused on soft costs—that is all the extra expenses that are rolled into the cost of installing a solar power system. Since prices for solar modules have dropped to below a dollar/Watt, the percentage of an overall system price consumed by soft costs continues to increase. But soft costs are really hard to reduce and we just had a painful example to help drive that point home.
One of the most pernicious of the soft costs are those associated with getting approvals from the Authorities Having Jurisdiction (AHJs) over the project. That includes both the utility that must approve any rebate application and interconnection agreement, as well as the local building and safety department which must issue the permit and inspect the project. The requirements for approving a solar power system vary considerably from jurisdiction to jurisdiction and that lack of standardization—combined with just plain arbitrariness that runs rampant in some places—means long, pointless delays in moving projects forward.
We are working on a medium-sized residential project in Los Angeles. If we were doing this in Pasadena, it would be installed by now, but as everyone knows, LA isn’t Pasadena. We submitted the requested materials for reserving the rebate on this project on December 3 of last year and then sat back while we waited to hear from them. Weeks went by without a peep—while we reassured our client that we would update them as soon as we heard something.
Then, finally, we did. On February 19th, seventy-eight days after we submitted the application, we got an email telling us that the application was “incomplete” and that:
If you fail to submit the requested documentation by the above date your incentive application will be subject to cancellation without further notice.
(It really was in red type.) How long did they give us to respond? Two weeks. In other words, we get less than one fifth of the time that LADWP took to, in its sole discretion, identify “deficiencies", to cure those deficiencies.
If that wasn’t bad enough, LADWP adds insult to injury by sending a copy of the “deficiency” email to the client! Pity the poor client—they have picked a contractor, signed a bunch of paperwork, and made a down payment, all months ago with nothing to show for it, and then they get an email that suggests for all the world that their contractor has botched things and their project is about to go south! How helpful.
So now the contractor has to spend time reassuring the client that despite the dire tone of the email, everything will be ok. Then you spend more time addressing the “deficiencies” that have caused all the ruckus in the first place.
I won’t bore you with the entire litany of nonsense that we were asked to cure, but my favorite one was this: when you submit information about the system online, you are supposed to show the cost of modules, the cost of the inverter(s) and the balance of system (BoS) costs. You are also required to submit a copy of your contract for the sale. This we did. But they complained that the contract price and the system price entered online did not agree. Now here’s the thing, once you submit the rebate application to LADWP you can no longer see those details, so the contractor has no way to know where this “error” came from. So, with no other options, you tell them that the contract is the controlling document as to the system cost so they should use that.
Instead, they send out yet another email, this time with the scary heading: “FINAL NOTICE” (yes, all in caps) with the following declaration:
The Los Angeles Department of Water and Power (LADWP) has received your Solar Incentive Program application, and it is still incomplete.
And yes, they send a copy of this email to your client as well.
Now if they had actually read the contract they would have understood that the discrepancy is due to the rebate amount itself. Online, the total cost reflects the price before rebate. But because we front the rebate for our client, the contract price is net of the rebate amount. (The contract itself spells that all out, of course, but then LADWP would have to actually read the contract.) We thought about explaining this before coming to our senses and realizing that was a lost cause. Instead, we created a letter requesting that they modify the online data to reduce the BoS amount by the rebate, and uploaded that to their system. Voila, just like that, they reserved the rebate.
By my count, it took eight emails to get this resolved.
Just about everything about this interaction is wrong. The delay in the initial contact is wrong. The tone of the email sent out is wrong. The absurd disparity between the timing LADWP allows itself versus that to the contractor is wrong. And the lack of understanding of what they are reviewing is infuriatingly wrong. It builds in delays and costs to deal with those delays. It is what makes soft costs so damn hard.
It needs to change.
Solar rebates are fleeting in many locations—now you see them, now you don’t. Case in point, Burbank Water and Power (as is the case with its cousin in Glendale) is notorious for offering, and then taking away solar rebates. We monitor BWP’s website for new developments, and we have now learned that they will be holding a lottery for possible rebate funds next July. No additional details were made available; presumably they will be posted sometime in June.
Given that development, we decided to update our overall rebate status. Here is how things stand generally in the Run on Sun service area as of this date:
|Utility||EPBB ($/Watt)||PBI (¢/kWh)|
|(Click to see website)||Residential||Commercial||Non-Profit||Residential||Commercial||Non-Profit|
|Anaheim||Unavailable until June, 2014||Unavailable until June, 2014|
|Azusa||Wait List||Wait List|
|Burbank (BWP)||Lottery in July, 2014||Lottery in July, 2014 (30 kW or less)|
|Glendale (GWP)||Unavailable until 7/1/2014||Unavailable until 7/1/2014|
|Los Angeles (LADWP)||$0.40||$0.70||$1.45||Not used|
|SoCal Edison (SCE)||$0.20||$0.25||$0.90||2.5¢||3.2¢||11.4¢|
Here are a couple of very important qualifications to what appears in that table:
This is a moving target; watch this space.
UPDATE - 2/10 - LADWP has now revealed the reasoning behind their delay in moving forward on the program “tweaks":
The FiT Set Pricing Program was deferred from the February 4th Board of Water and Power Commissioners (Board) meeting so the Rate Payer Advocate may review the proposed changes. The program modifications and enhancements are still expected to go before the Board for review and approval at the February 18th Board meeting.
Given that no change—that is, reduction—to the set-pricing offered under the FiT was made in the proposed changes, it is pretty clear how the RPA will come out in all this. It looks like we may be seeing a threat to the FiT’s viability come the meeting on the 18th. Interested parties should plan to attend.
On Monday we reported on an email that we had received announcing minor changes to LADWP’s Feed-in Tariff program and the anticipated launch of the third tranche of 20 MW on February 14. Now we have learned that the Resolution adopting these changes and authorizing the third tranche, which was to be considered at yesterday’s Board of Commissioners meeting, was pulled from the agenda and “deferred until further notice!”
Bottom line: the third tranche will not be offered as of February 14. Not sure what is going on with this, but here are our thoughts.
In reading the resolution that was to be adopted by the Board, we noted that there had been a presentation made regarding the status of the FiT by staff on December 3rd, but that the presentation was not online. (Thanks to the kind assistance of the staff, we now have the December 3rd presentation here.) As we suspected it must, the presentation reflected the slow progress in moving projects past the adoption of standardized contracts—a prerequisite for construction to begin.
As this chart from the presentation shows, the only projects “in service” actually date from the demonstration program, not the actual FiT. In fact, only a bare handful of projects are even under construction, with the bulk of the first tranche still pending execution of the standardized contract and some still in the interconnection study phase. Keep in mind the standardized contracts (SOPPA on the chart) are just that, standardized take-it-or-leave-it contracts, the form of which was available to participants before they ever submitted their initial applications! So what could be causing this delay? Surely the Board had some pointed questions for staff on this point
We decided to watch the video from that meeting to see if we could gain any insights into how the Board viewed this issue and to see if we could discern why consideration of this resolution was pulled without notice or explanation.
The video—you can watch it here jumping to agenda item 27A—really doesn’t go into much in the way of relevant discussion. (There is a long detour into problems that a SolarCity customer was having with a bill—post solar—that was higher than ever before, and the clear confusion on the part of Board member Barad regarding how net metering works. But that is a topic for another day.)
There was a question as to adequate staffing, but that was not cited as a reason for the delay.
Instead, staff responds by saying that some of the developers (actually, it would appear to be nearly all of the developers) had problems filling out the standard contract. However, the proposed tweaks did not include streamlining the contract so maybe that is why there is a concern about the proposed resolution?
We also hear in the video that the CleanLA/UCLA Luskin Center coalition, which was one of the driving agents behind the FiT, was supposed to be producing a report on the FiT so far—perhaps that report raised issues that caused the postponement? Alas, the report does not appear at the LADWP website, nor can we find it on the CleanLA website.
However, the last person to speak about the FiT is longtime FiT opponent, the Ratepayer Advocate, who once again complained about the cost of the FiT. Indeed he asked that the program switch from a set-price program to a competitive bid program. His complaints are no better grounded now than they were a year ago, but perhaps he has caught the ear of one of the new Board members who pulled the resolution because a change in pricing was not proposed?
For now, all we can do is speculate. But one thing is sadly certain—LADWP is playing Scrooge this Valentine’s Day as the third tranche remains on hold.
UPDATE: The postponement is “until further notice.” We have a more detailed report on the delay of the third tranche of LA’s FiT here.
UPDATE: LADWP has informed us that the meeting scheduled for tomorrow has been postponed. As soon as we learn more, we will update this post.
LADWP has announced that the third 20 MW tranche of its Feed-in Tariff program will launch on Friday, February 14, pending Commission approval.
Outgoing GM Ron Nichols signed off on the Board Packet, and the tweaks to the program suggested therein are set to be reviewed and approved on Tuesday, February 4 at 11:00 a.m.—that is, tomorrow morning—according to the email DWP sent out Friday afternoon. (Can you say, “Friday news dump,” anyone?)
Apparently DWP made an update presentation to the Board on December 3. We say apparently since it is referenced in the new materials, but we cannot find a copy of the report anywhere online. We wonder, for example, if the Board was informed about the surprisingly low number of contracts that have been executed under the FiT so far? As we reported back in early January (going just on published data and without access to the report to the Board), out of 109 projects that originally “won” in the First Tranche lottery, only 3—a 2.7% success rate—have signed contracts.
Hard to say whether any of the “tweaks” being proposed will do much to address that problem.
We observe with some dismay DWP’s observation that “numerous developers have been confused or inexperienced with designing solar for the California market, ” since that could have been avoided (or at least reduced) if the program had given preference to local developers. After all, one of the stated purposes of the FiT was to develop local jobs.
Seems like a missed opportunity and one that has delayed successful project implementation while the out-of-towners get educated on the mysteries and joys of doing solar in the City of the Angels.
Other tweaks include:
Beyond those changes, “staff will post updated sample forms and contracts, answers to frequently asked questions, and checklists on the FiT Website to provide guidance and transparency." A noble goal, to be sure, but it would be a start if they could post their own Board presentations in a consistent manner.
Assuming the Board approves these modifications, the window will open on the Third Tranche on February 14, with a base price for energy of 15¢/kWh. The window will stay open for five business days and all completed applications will enter a lottery to see who will be part of the 20 MW allocation. Happy Valentine’s Day, everyone - may your solar dreams come true.
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