What is CLEAN LA SOLAR?
(What is the Feed-in-Tariff?)
Clean LA Solar is a Los Angeles Dept of Water and Power (LADWP) program based on a Feed-in Tariff (FiT) model. It gives LA property owners the right to build solar systems on their property and interconnect to the LADWP electrical grid. The amount of electricity that “feeds-in” to the grid is recorded, and the LADWP pays the owner for it. Payment is made under a long-term, fixed-rate Power Purchase Agreement (PPA), typically 20 years.
Why Build a Solar System with ASI under CLEAN LA SOLAR?
Here are the benefits of CLEAN LA SOLAR:
- Earn revenues from an unused asset – an empty roof or land;
- Earn yields of 9% to 25% IRR, by investing in the system; OR
- Earn a lease payment without investment; Absolutely Solar obtains investors who want to own and operate the system while earning a return;
- Earn revenue from the Feed-in Tariff whether the building is leased or vacant;
- Earn substantial tax incentives – 30% federal tax credit, state and federal accelerated depreciation;
- Be protected by a roof maintenance contract for roof area under the solar system;
- ASI can provide portfolio-wide solar investment analysis for buildings throughout CA.
Definition of a “Feed-in Tariff”
In Los Angeles, a Feed-in Tariff is a fixed price paid by LADWP for each kilowatt hour produced by a solar energy system. Just like customers pay a price per kwh for electricity on their electricity bills, the utility (LADWP) will pay a producer for the power they produce.
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More About the Feed-in tariff
A Feed-in tariff (FIT, standard offer contract) is a policy mechanism designed to accelerate investment technologies. It achieves this by offering long-term contracts to renewable energy producers, typically based on the cost of generation of each technology.
50 Countries have enacted Feed-in Tariff programs. The German Feed-in Tariff policy has proved to be the world’s most effective policy framework at accelerating renewable energy deployment and has yielded substantial returns for system owners. It’s net effect has been to lower the retail cost of power during peak hours of solar energy production.
Example Past Projects
$105,000 annual lease payments
Sunland Storage Facility
$26,000 annual lease payments
HOW IS CLEAN LA SOLAR (FEED-IN TARIFF) DIFFERENT FROM OTHER SOLAR PROGRAMS?
Many solar systems in California are “Net-Metered”. This means that the power generated by the system feeds the building’s electrical load and is used onsite. CLEAN LA Solar is different because it feeds the distribution grid. It provides power to all the LADWP customers nearby. A “Net-Metered” system only earns credit on the user’s bill, and the Feed-in Tariff earns cash.
There are many Feed-in Tariff programs in the US, but Los Angeles is the first major city in the US to enact a Feed-in Tariff and it is the largest program in the country.