Tag: "tranche"

04/07/14

  08:31:00 am, by Jim Jenal - Founder & CEO   , 994 words  
Categories: LADWP, GWP, Feed-in Tariff

Feed-in Tariff Update: Tale of Many Cities, One Success

There are multiple Feed-in Tariff (FiT) programs in the Run on Sun service area, although only one is actually doing anything. We decided it was time to check back in on these programs and to see if any of them are living up to their mandate to actually get solar installed in the L.A. Basin.

As of this writing, there are FiT programs hosted by four cities: Anaheim, Glendale, Los Angeles and Riverside.  In this post we will check-in with Los Angeles and revisit the status of the other three later in the week.

LADWP’s Feed-in Tariff Program

Los Angeles brags that it has the largest FiT program in the country and that assertion is true, as far as it goes.  We have written extensively about the LA FiT in the past, documenting how it came about and how it has recently survived challenges from the Rate Payer Advocate who insisted upon comparing energy costs from utility-scale projects with the “in-city” projects called for by the legislation that mandated the program.

LA’s program has a 100 MW capacity goal and it divides that total into five, 20 MW allocations, or tranches, each to be offered roughly six months apart.  The first tranche was to be offered at a base price for energy (BPE) of 17¢/kWh, with each subsequent tranche offered for a penny less than its predecessor. So far, three tranches have been made available, the latest just last month.  As we have reported on both of the earlier two tranches (first tranche here and second tranche here), we will focus this post on the third tranche and overall program status.

Third Tranche Results

The third tranche, after some delays due to City Council concerns, opened on March 17.  The LADWP FiT website provides a PDF file of their spreadsheet showing the results of the tranche lottery, but unfortunately the underlying spreadsheet is not provided.  This means that the PDF has to be converted back to a spreadsheet before any real work can commence, an unnecessary waste of effort. 

Hey, LADWP listen up: if you are going to publish data, publish the spreadsheet, not just a PDF. (Thanks, I feel better now.)

Does Timing Matter?

Up until now the sense was that in order to have a shot you needed to submit your application as early in the five-day window as possible but these results belie that notion.  While the window went up on March 17, none of the 45 applications submitted came in on the first day!  The earliest application came in on the 18th at 11:53 (and, despite landing lottery number 21, missed the allocation cut-off) whereas the last application came in on the 21st at 3:46.  Interestingly, the last twelve applications received all got that same time stamp, which means that despite their best efforts to the contrary, one quarter of all applications received were received at the last possible minute—and four of those twelve made the cut.  More on this in a minute.

Does Size Matter?

The 20 MW of capacity in the tranche are not just one big pool.  Rather, 4 MW are set aside for “small” projects (i.e., capacity between 30 and 150 kW) and the remaining 16 MW to “large” projects (150 kW to 3 MW).  So does size matter in terms of the likelihood of success?  It certainly does—all four small projects made the cut, whereas only 19 out of 41 large projects did.  Of the small category projects, two were right up against the size limit (145 and 149 kW, respectively), while the other two were much smaller: 79 and 37 kW.  Frankly, in light of the relatively low payment in this tranche—a situation that will only get worse as the BPE declines in subsequent tranches—it will become harder and harder for small projects to pencil out.  Given how badly the small category underperformed in this tranche—barely reaching 10% of the 4 MW capacity set aside—LADWP should re-think its approach here.  If it is serious about maintaining a small projects category, it needs to increase the BPE for such projects.  Otherwise it needs to revise its rules so that the excess allocation in the small category can be used by large projects that otherwise would not make the cut.

Players

The large category is particularly interesting from the sense of who is playing.  The 41 projects in the large category came from only 19 different sources, and the biggest player of all is none other than the City of Los Angeles itself!  Here’s the list:

Players in LADWP's FiT 3rd tranche

Twelve of the nineteen large project applicants submitted only one project, three submitted two projects, one submitted three, two submitted four—and then there’s LA’s Harbor Department which submitted 12 with an average size over 1 MW each!

So how did these players fare in terms of making the cut? Well, the City only got four of its twelve projects in under the wire so one might think that their success was no more likely than anyone else.  But here’s an interesting thing—remember those twelve applications that all received the same timestamp of 3:46 p.m.on the last day to apply?  You guessed it, all twelve of them came from the City of LA’s Harbor Department!  How curious.

The other successful players were Pasha Stevedoring (2 out of 3), OM Solar LLC (2 for 2), PLH LLC (2 of 4) and SunRay Power LLC (2 of 2).

Coming to a Zip Near You?

Finally, we wanted to see where all of this solar is going and, given the success of the LA Harbor Department, not surprisingly the big winner is San Pedro, home to the Port of LA.  Five projects will be located in San Pedro’s 90731 zip code for a total capacity of 4.6 MW, and one more nearby in Wilmington.  The Port is about to become something of a solar center in Los Angeles—a welcome departure from its past reputation as a toxic hot spot.  Here’s the map:

 More to Come

There’s more to say about the state of LA’s FiT, so we will save that for tomorrow, including a look at their new dashboard that seeks to provide greater transparency into how the overall program is doing.

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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