During the debate on LA’s new solar feed-in tariff (FiT) program, we reported on the comments from LA’s so-called Ratepayer Advocate (RPA) who complained that at 17¢/kWh, DWP was paying to much for energy under the FiT. Instead, the price should be just 11¢ he said - a statement that had us scratching our collective heads. Well now comes an article from Bloomberg that puts this into a very different perspective, and so we ask: just what is the cost of new energy generation?
The Bloomberg piece, First Solar May Sell Cheapest Solar Power, Less Than Coal, notes that a 50 MW project owned by thin-film solar manufacturer, First Solar, had just signed a power purchase agreement with El Paso Electric Co. for just 5.79¢/kWh, which makes it “’the lowest solar power purchase agreement price we have ever seen,’ [according to] Aaron Chew, an analyst at Maxim Group LLC in New York.” Now that is indeed amazing - but of course while thin-film panels are cheaper than crystalline panels they are also significantly less efficient - meaning that they are generally not suited to constrained footprints (like commercial building rooftops) which are the targets for the FiT. And, of course, the economies of scale present in a 50MW project are simply not available for a 50kW project - again, the target size for the FiT.
But what really struck us in the article was this, referring to the incredibly low price being paid for the solar energy coming from this new solar plant:
That’s less than half the 12.8 cents per kilowatt-hour average price for new coal plants, according to data compiled by Bloomberg. Thin-film photovoltaic power typically sells for 16.3 cents a kilowatt-hour, according to Bloomberg New Energy Finance.
Wow - according to Bloomberg, new coal-power plants are selling energy for more than the RPA was willing to price energy under the FiT! Moreover, even the significantly cheaper thin-film plants are averaging just under the price for energy set by DWP staff for the FiT - a rate the RPA ridiculed as a give-away.
As the FiT kicks off today amidst substantial speculation as to its viability, even at the 17¢ figure, this Bloomberg piece is yet another reminder that perhaps we need to look more closely at the pronouncements coming from LA’s newly minted RPA - at least some sources seem to call his numbers into question.
In what promises to be the public’s last chance to learn about the process before the opening of LADWP’s Feed-in Tariff (FiT) application period, the Los Angeles Business Council is hosting a FiT workshop on Tuesday, January 29 from 10-Noon.
The LABC has been one of the lead proponents in the fight to bring a true FiT to Los Angeles, and this workshop - co-hosted with LADWP - has something of the feel of a victory lap as well as an exercise in public education. All of which seems appropriate, under the circumstances.
We will, of course, be attending and will report back on anything new that we learn.
Here are the specifics:
LABC/LADWP FiT Workshop:
Tuesday, January 29, 10 a.m. - Noon
Century Plaza Towers
Basement Conference Rooms A & B
2029 Century Park East
Los Angeles, CA 90067
RSVP Required: Please Click Here to Visit Registration Site
We are informed that a $10 parking voucher will be provided to attendees.
LADWP has put out a press release announcing that in light of yesterday’s successful vote in the City Council, applications for the first 20 MW tranche of the LA Feed-in Tariff (FiT) program will begin being accepted on February 1, 2013. Projects funded under that first tranche will receive a Base Price for Energy (BPE) of $0.17/kWh.
Eager to avoid a stampede that day, LADWP has also announced that all applications received during the first five business days will be rank ordered according to a lottery. Applications received after February 7 will be date stamped and processed in the order received.
Smaller projects - those between 30 and 150 kW (AC) - will have 4 MW expressly set aside for them. The remaining 16 MW will be allocated toward projects from 150 kW to 3 MW (the limit of the FiT program). However, if small projects exceed the 4 MW set aside, they will be able to draw from the remaining 16 MW. If the first tranche is not fully subscribed during the six month application window, the excess capacity will expire - that is, it will not roll-over into the next tranche.
The second 20 MW tranche will follow six months later - on August 1, 2013 - at which time the BPE will be $0.16/kWh.
As the application process is complicated, potential applicants would do well to get the process begun immediately. Please give us a call to get started now.
After two hours of a sometimes feisty debate, the LA City Council today voted 12-1 to move forward with DWP's recently approved 100 MW Feed-in Tariff (FiT) program. The need for all this drama arose with Councilmember Jan Perry who voiced concerns over the cost of the program, echoing the complaint of the Ratepayer Advocate (RPA), Dr. Pickel. The Council's vote cleared away the last obstacle to a FiT roll-out, most likely sometime in February. As promised, we attended and spoke at the Council meeting (for all of 60 seconds); here is our report.
Although Perry is widely seen as a supporter of solar in general and the FiT in particular, rumor among City Hall insiders was that today' motion was an attempt by Mayoral candidate Perry to inoculate herself against campaign charges that she was ignoring the concerns of the RPA, even though those concerns were based on a host of faulty assumptions. (Curiously, Perry's other Councilmember opponent in the Mayoral contest - Eric Garcetti - was absent from today's debate, but he did manage to vote.)
Given that motion of this type - under Section 245 in the City Charter - require a 2/3 vote of the total membership, Perry walked in the door needing at least 10 of the 13 Councilmembers who attended to vote for the motion.
Any hearing in LA City Hall comes complete with a colorful array of gadflies and this meeting was no different - the most startling being the guy wearing a cone hat, made from a very large dog head cone, that included a plastic pink flamingo entwined in the cone's cords. (The Councilmembers, who often appear completely disinterested in much of the proceedings, acted as if his appearance were a daily occurrence, which it undoubtedly is.)
While City Hall rules allow for up to six minutes for a member of the public to speak on an issue, in general the rule is two minutes. Today - as was the case the last time I spoke to the Council - the rule was one minute. Not a lot of time to give to people who are taking hours away from running their business to speak, but so it goes.
A substantial number of groups spoke in favor of moving the FiT forward without further delay: Homeboy Industries (Thaddeus Skiles), Kyocera (which has been about the only solar manufacturer consistently showing up for FiT hearings), the Clean LA Solar Coalition, Communities for a Better Environment (my old organization, represented by Bahram Fazeli), the Sierra Club, various City residents and the LA Chamber of Commerce.
Not much by way of opposition - again the gadfly types who seem to oppose everything (and who all seemed to agree that this was a "power grab", get it?) and a guy named Jack Humphreville representing an entity called the Greater Wilshire Neighborhood Council who termed the entire FiT program a "pet project" of the DWP.
It has been often said that there are two things the weak of stomach should avoid observing - the making of sausage and legislation. Today was a painful lesson as to the latter. (Do you really need one for the former?) A number of Councilmembers demonstrated both an understanding of the issues and a powerful commitment to the benefits of rooftop solar in the LA basin, particularly Councilmembers Krekorian and Koretz. Paul Koretz sounded as if he had read our last post prior to the meeting (and maybe he had) as he quoted from President Obama's Second Inaugural Address and noted that we are years behind in implementing solar. "LA is famous for its smog," he said, "It is time that it became famous for its solar!"
Not to be outdone, Paul Krekorian noted that the FiT was both good energy policy and good economic policy. While small businesses in LA could not really participate in lots of other renewable energy projects - geothermal out in the desert, wind in Northern California, etc. - they can install in-Basin solar. He concluded, "Some city in America will be the solar capital of America for the next century; I believe it should be Los Angeles and the way we make it into Los Angeles is by starting now."
The writing on the wall, Jan Perry defended her motion against charges that it was politically motivated. Nevertheless, Perry agreed to modify it to allow her 245 motion to be "Noted and Filed" meaning that she would be on record as having brought this motion, even though no actual vote on the merits would be held. The Council went along, and the vote for Perry's 245 motion to be Noted and Filed was approved 12-1. (Two odd points based on the official vote tally - Garcetti apparently entered the chambers during the debate (I did not see him) and voted for the Note and File. The other oddity is that the official tally shows Perry voting Yes on the Note & File (i.e., against her own motion) and the only No vote was from Parks. Very odd indeed.) Thus the tempest ended, not with a bang, but a whimper.
So now the stage is set for the FiT to actually get underway! Once again it needs to be said that DWP General Manager Ron Nichols demonstrated himself to be very quick on his feet and quite possibly the smartest guy in the room. His calm but firm push back on the RPA's nonsense - without ever expressly calling it nonsense - was very helpful today.
Of equal importance were all of the folks who took the time to send emails or make phone calls to Councilmembers. Together we helped convince the Council of the overwhelming popular support for this program - which helped to overcome the faux populism expressed by the RPA. Put most simply - we would not have carried the day without you.
Contact us today so that we can get started and make sure you can get an application on file to secure a place in the first 20 MW tranche which offers the Base Price of Energy of 17¢/kWh.
Today during his Second Inaugural Address, President Obama committed the Country to respond to the Threat of Climate Change and emphasized the need to make rapid progress on sustainable energy sources - watch:
Which makes us wonder - were you listening, members of the Los Angeles City Council?
Tomorrow you will be taking a vote on your long-time-coming Feed-in Tariff program. Will you take our President’s admonition to heart? Or will you vote for yet more delay and uncertainty in a program that has already been delayed for far too long?
The country is watching you. Please follow the President’s lead and clear the way for this program to go into effect, Now!
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