We have reviewed the data coming from LADWP for the results of the second tranche lottery - here is our analysis.
Our first observation is that for some inexplicable reason, LADWP chose to present the data in Adobe pdf format instead of the Excel spreadsheets used previously. This made the process of analyzing the data far more tedious than it should have been. Heads up, DWP, please provide data in a data format. We have nothing against pdf files but that is not the way to publish this type of data.
Second, there was no Owens Valley data here. We cannot tell if there were no projects submitted from Owens Valley (there were in the first tranche) but none of these projects come from outside the Los Angeles Basin.
Third, one of these proposed projects was for biogas and not solar! That proposed project, submitted by MM Lopez Energy LLC, was for a 2.95 MW biogas system in Lake View Terrace. Unfortunately, the tranche was already oversubscribed by 572 kW by the time their lottery number turned up. This is a first for the FiT (which theoretically is technology neutral) - all of the proposed projects in the first tranche were for solar.
Collectively, the data released documents a total of 112 proposed solar projects, 63 in the large category (>150 kW) and 49 in the small category (30-150 kW).
While there were a total of 64 projects in the large category, it only took 19 to fully subscribe the 16 MW capacity cap available to large projects, and the last project to make the cut will have to downsize by 263 kW (from its proposed 800 kW) to stay within the cap. Here are the companies that were successful in the lottery along with the number of successful projects and the total capacity they are authorized to install:
Only three companies ended up with more than one project: OM Solar LLC (3 projects), Oakdale Ventures LLC (2) and SunStarter Solar LLC (2). The largest project appears destined for a warehouse building owned by Forever 21 coming in at just under the program limit of 3 MW.
One non-commercial entity made the list, LA’s Metropolitan Transit District will be installing 350 kW for its Division 13 bus operations center.
Far more numerous, however, were the losing proposals - here they are:
One of the first things that jumps out here is the amount of overlap. Each of the companies with multiple unsuccessful project proposals also had at least one project that made the cut. In particular, OM Solar LLC lost on 9 but was successful on 3, SunStarter Solar LLC lost on 8 but succeeded on 2, Haizenberg Solar LLC lost on 3, succeeded on 1, PLH LLC lost on 2, succeeded on 1, and SunRay Power LLC lost on 2 but succeeded on 1.
On average, the successful projects were somewhat smaller than the ones that missed the cut. Successful projects averaged 856 kW in size whereas projects that missed the cut were 1,113 kW.
Total proposed capacity was 66.38 MW, or 415% of the available 16 MW. Interestingly, this compares to 44.3 MW that were proposed in the first tranche - despite a lower energy price, the number of proposed projects increased!
Overall, the average proposed system size was 964 kW.
There were fewer participants in the small category, with a total of 49 projects of which 47 came within the 4 MW capacity cutoff (although the last project to make the cut will have to trim down by 3.3 kW from its proposed 38.7 kW). Average system size for a successful small project was right in the middle of the allowed range at 85 kW. The two projects that missed the cut were for 41 and 108 kW.
Here are the winners:
SunStarter Solar LLC was the big winner here with 10 successful proposals. Broadstreet, which finished right behind with 9 selected projects was also the bidder on the two that didn’t make the cut. Interestingly, the average system size for SunStarter was more than twice that from Broadstreet.
As before, the successful projects are scattered about the Basin. Here’s a listing by city:
Not surprisingly, LA itself is the big winner with thirty projects in the city proper reaching nearly 8 MW of installed capacity. Seventeen other neighborhoods are also participating overall, with North Hollywood capturing the second greatest number of projects (8) while Sunland comes in second for amount of capacity to be installed (3 MW).
Breaking the same data down by zip code shows that the top 10 zip codes account for 28 of the 68 projects (41%) but 15.7 MW of total capacity (77%).
Here is the breakdown by top ten zip codes:
Greatest capacity is set to occur in 91040 (Sunland) with three projects totaling exactly 3 MW, whereas 91605 (North Hollywood) has the greatest number of projects at seven worth a total capacity of 1.1 MW.
Once again we turned to the folks at batchgeo.com to give this data some visual perspective. We mapped all of the approved projects by zip code including the size of the project, the project name and the company responsible. The result is the following map where the different color pins represent the size of the projects accumulated in that zip code. (Unfortunately they do not allow you to represent size by a larger dot on the map - but hey, its a free system!)
As with the first tranche, there are a great many specially created entities in the list of company names which makes it harder to know who is actually scheduled to do the work. For example, there are numerous proposed projects from companies with names like 17000 Ventura, LLC or Luxe Apartments, LLC - not a lot of insight provided there. Frankly, since the LADWP FiT requirements call for the experience of the installation team as a basis for possible rejection, the published data should identify the installer and not just the project developer.
Here are the top ten companies by capacity of winning proposals:
Once again, as in the first tranche, OM Solar is the big winner (they had seven projects worth 5.2 MW back then). OM Solar is headquartered in Torrance. SunStarter and Broadstreet Energy were also big players in the first tranche: SunStarter had 6 projects worth 3 MW then and Broadstreet had 4 for 1.3 MW. Broadstreet is headquartered in Stevenson Ranch. SunStarter Solar has a residential installation group in LA, but the company behind these projects is Solar Provider Group, headquartered in Toronto. PLH LLC appears to be a property management company out of Oregon. Oakdale Ventures LLC is listed as a foreign (i.e., out-of-state) entity with offices in Chatsworth. Lazben Investments is headquartered in Van Nuys. Heizenberg Solar LLC filed as a business in California on June 7 and appears to be a Delaware corporation headquartered in Denver. No information could be found about Central Plaza. SunRay Power LLC appears linked to something called Lakewood Six Solar LLC in New York City.
A few take-aways from this second tranche:
We said after the first tranche data was released that it appeared that the program was off to a good start and the results for this second tranche appear to confirm that assessment. Now we need to see the success rate of these projects actually being developed.
The second 20 MW tranche of LADWP's Feed-in Tariff (FiT) program went up for grabs on July 8 and all applications received by July 12 were included in the auction that took place on July 19. The lottery results were posted on Friday (annoyingly as a pdf file - thanks a bunch!) and we will be analyzing them for a detailed post soon.
But here's the key take-away: it is, once again, over subscribed!
We will tell you who won big and who got shut out as well as where this is all going to go in our upcoming analysis. Stay tuned!
UPDATE - We just learned that the Board hearing to discuss changes to the Solar Incentive Program has been rescheduled to Wednesday, June 19th at 9:00 a.m. (Still at DWP HQ on Hope Street in downtown LA.) We will not be able to attend due to a prior commitment with the USC Solar Decathlon team. Anyone who does attend, feel free to pass on our thoughts below to the Board.
Solar is a great fit for non-profit organizations - environmental awareness and good stewardship of resources go hand-in-hand with the mission of churches and schools. But because non-profits are unable to take advantage of tax incentives, their sole sweetener for going solar are utility rebates - and in the City of the Angels, those rebates are about to drop dramatically before they go away entirely.
LADWP’s Solar Incentive Program (SIP) has been divided into two pieces: Residential and Non-Residential, the latter of which was further divided between Commercial (applicable to taxable entities) and Non-Profit/Government (i.e., tax exempt organizations). The Non-Residential program is being phased out in favor of the Feed-in Tariff program (about which we have written extensively). The thing is - the price paid for energy under the Feed-in Tariff program is just too small to pencil out for entities that cannot avail themselves of the 30% federal Investment Tax Credit and depreciation - and unlike under the existing SIP which offers higher rebate rates for non-profits, the FiT only provides a single payment level regardless of the tax status of the entity.
Most non-profits are looking for modest-sized solar systems in the 30 to 150kW range. That is too small to attract lots of financing options and the boards of many non-profits are reluctant to commit to long-term leases for a depreciating asset.
Bottom line - without the help of a generous rebate, many - if not most non-profits - will be left on the sidelines of solar.
Which makes the news coming out of LADWP all the more troubling. We have learned this week that when DWP goes before its Board on June 18th, it will seek a final re-authorization of the Non-Residential SIP with a requested budget of $15 million and rebate rates of $0.70/Watt for Commercial and just $1.45/Watt for Non-Profits. As bad as that reduction is, when that $15 million is gone, that is it - no further funding of the SIP is planned.
How big is the shortfall caused by the lowered rebates? Assume two neighboring entities, one commercial the other non-profit, that want to install a 100 kW solar power system on their respective buildings. If we assume that the install cost comes in at $4.50/Watt, they are looking at an initial outlay of $450,000. The commercial entity will get a rebate of $70,000 and a federal ITC of $135,000 leaving an out-of-pocket amount of $245,000 - and that is before figuring in depreciation. The non-profit qualifies for a larger rebate, $145,000 under the proposed rates, but that’s it - leaving them with an out-of-pocket expense of $305,000 - $60,000 more than their for profit neighbor.
This is curious and troubling since the LADWP website has indicated - at the same time that we were being given this information - that when the SIP program resumed in July it would offer non-profit rebates of $2.25/Watt - a rate which would actually make our hypothetical non-profit come out ahead. A more modest rate of $2.05/Watt would allow non-profits, at least at this level of project size, to break even.
Rebates are intended to serve a number of purposes but one of those is to help make solar commonplace - to insure that systems are installed where they will be seen and understood to be reliable components of our future. Given that, where should limited rebate dollars be spent: assisting cash-strapped schools and churches to install solar where congregants and students can learn the lessons of sustainability - or simply to aid some company in lowering its operating costs and boosting its profits? (Don’t misunderstand - we are all for commercial rebates, but if it comes down to a choice, surely the non-profits are in greater need of the support.)
On June 18th DWP staff will present this proposal to their Board and perhaps these rates can be adjusted to give more help to non-profits. That would be a welcome outcome, but even more welcome would be an acknowledgement by DWP that as their program plans presently exist, there will soon be no way forward at all for non-profits to adopt solar.
Surely that cannot be the desired outcome.
Drive the freeways, ride the train from San Diego to Union Station, or fly into LAX and you cannot miss the obvious - Los Angeles has tremendous, untapped potential for solar growth. Now a new report from Michelle Kinman at the Environment California Research & Policy Center, seeks to layout the case for Solar in the Southland: The Benefits of Achieving 20 Percent Local Solar Power in Los Angeles by 2020. Here’s our take.
It is beyond dispute that there is a huge gap between the amount of solar that could be supported in the Southland versus the amount that is actually, presently installed. As Ms.Kinman’s report makes clear, even in the City of Los Angeles alone, that gap is enormous, as illustrated by this graph:
Citing a study by UCLA’s Luskin Center for Innovation, Kinman reports that the rooftops just in LA alone could support some 5,500 MW of solar power - of which a paltry 68 MW is installed today. That is a lot of potential. But Kinman’s report doesn’t focus on adding all of that - rather she has documented dramatic benefits that would follow from just reaching the goal of 1,200 MW by 2020.
In addition to supporting some 32,000 job-years of employment (thank you!), Kinman shows that installing that much solar would also have these benefits:
Kinman insists that this is an achievable goal, but one that would take “clear, strong and consistent direction and support” from the Mayor and the City Council to LADWP. Some specific policy prescriptions include:
If we have one criticism of the report it is that it fails to identify funding sources - other than anticipated savings - to spur this growth. For example, providing additional incentives for residential solar or expanding the FiT will come with a price tag. Who is going to put up that money? At a time when solar is under attack from investor-owned utilities for unduly shifting costs onto non-solar customers, the report misses an opportunity by failing to outline a mechanism to pay for its important goals.
Still, the report provides valuable documentation of the as yet unrealized benefits of tapping into LA’s solar potential; and in that it makes an important contribution to the ongoing policy debate.
No entity did more to bring about LA’s Feed-in Tariff (FiT) program than the Los Angeles Business Council. Now they have released a cool video (h/t KB Racking) that highlights the program and speaks eloquently as to it future potential.
Here’s the video:
We are heading toward the opening of the Second Tranche of the FiT program where a total of 20MW of production capacity will be available (4MW set aside for “small” projects between 30 and 150 kW) at a base price for energy of $0.16/kWh.
There is a fairly lengthy application process so folks who are interested in submitting for the Second Tranche are encouraged to contact us now.
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