Thoughts on Solar by Run on Sun's Founder & CEO, Jim Jenal

Back in July we reported on LADWP’s draft Feed-in Tariff program (FiT) and we noted that there was still a great deal of clarification needed.  Today is the follow-on workshop (which we will be attending) and the preliminary presentation materials indicate some movement in the right direction with some issues still to be resolved.  This post will highlight the changes that we have noted and we will report later in greater detail following the workshop.

In contrast to the plan that was discussed two months ago, the initial “Demonstration” phase of the program has been expanded from a total of 5 MW to 6 MW with 1MW carved out for so-called “small” systems - those between 30 and 150kW.  (Overall the program is capped at systems < 1MW.)  This was hinted at before and makes sense since it is not really feasible for the smaller systems to compete on cost - DWP’s primary selection criteria - against systems many times larger.

Beyond the change in the Demonstration program size, DWP’s materials identify four areas where changes have been instituted based on feedback from the July workshop.  Specifically:

• Deposits & Fees - specifically, complaints were raised that the fee structure discriminated against smaller systems.  DWP has agreed to reduce the fee for the interconnection study (more below) for small systems and will return application fees to applicants who are rejected in the initial evaluation and ranking phase.
• Allocations for Smaller Systems - as noted above, a carve out of 1 MW total (850 kW in LA-basin and 150 kW in the Owens Valley) has been set aside for small systems between 30 and 150 kW.  It will be interesting to see if that 85% - 15% allocation ultimately makes sense.
• Pricing - in the competition for which projects get approved, small systems will only compete against other small systems on price while larger systems will compete with each other.
• Interconnection Costs - as we had noted before , interconnection costs were a real wild-card in the initial draft proposal.  DWP has responded by saying that it will provide an interconnection cost estimator (online?) to help developers anticipate costs.  Also, once the interconnection study has been completed, developers will have the option to withdraw their application if the proposed cost renders the project financially unappealing.

The timeline remains that DWP intends to seek City Council approval for the Demonstration Program during the 4th quarter of this year with program roll-out to commence in the first quarter of 2012.

If you are interested in attending today’s workshop (from 2-4 p.m. in downtown L.A.) you can read the details in our previous post.

We will keep you updated as the program evolves.