Los Angeles' abundant sunlight will soon be converted into energy and cash for millions of everyday Angelinos under a new solar feed-in tariff (FiT) program that allows electricity ratepayers, solar companies and even third parties to generate and sell solar energy back to the city's public utility.

Phase 1 of the FiT program, approved last week by the Los Angeles Board of Water and Power Commissioners, calls for individual proposals starting next month to provide up to 100 megawatts of solar power to the Los Angeles Department of Water and Power (LADWP) at a fixed rate of 17 cents per kilowatt-hour.

The Adelanto solar power plant, one of several new sources for Los Angeles' electricity. Photo courtesy of the Los Angeles Department of Water and Power.

According to the agency, LADWP will issue 20 MW requests for proposals at six-month intervals between early 2013 and the end of 2016. Eligible projects can range in size from 30 kilowatts -- an amount easily produced with residential rooftop solar panels -- to as much as 3 MW. Each request for proposals will require that a certain amount of the solar capacity come from small-scale producers of between 30 and 150 kW.

Los Angeles Mayor Antonio Villaraigosa, a strong proponent of distributed energy projects to help stimulate the city's economy, hailed the FiT program as "another major step forward in transitioning to a clean energy future for Los Angeles."

"I'm proud of the LADWP Board of Water and Power Commissioners for moving Los Angeles forward to become the largest city in the nation to offer a feed-in tariff solar program," Villaraigosa said in a statement. "The FiT program takes advantage of our abundant sunshine to spur new private sector investment that will create jobs and decrease our city's reliance on dirty fossil fuels."

Solar to help meet Calif. RPS

More than stimulating California's clean energy economy, the program should also help Los Angeles meet one of the country's most ambitious renewable portfolio standards. Under state law, utilities must meet a 25 percent renewable energy benchmark by 2016, followed by a 33 percent firm standard to take effect in 2020.

The California Air Resources Board has estimated that the state's RPS should cut annual greenhouse gas emissions by 12 million to 13 million metric tons of carbon dioxide equivalent by 2020. In Los Angeles alone, renewable energy projects either completed or in the development pipeline are expected to reduce carbon emissions by more than 1.1 million metric tons annually, an amount roughly equivalent to removing the emissions from 210,000 motor vehicles in this traffic-clogged city.

Ronald Nichols, LADWP's general manager, said officials carefully studied their options for meeting the renewable energy mandates and determined that a feed-in tariff program was the best solution for the utility, which provides power to 1.46 million customers in Los Angeles. The initial offering price of 17 cents per kWh, while higher than what is available for other renewable power purchases, was established as an incentive for people to participate in the program, Nichols said.

"We learned from working with the business community, environmental leaders and solar industry representatives, and based on lessons learned from other FiT programs in California, that we needed to price the program to be successful," he said. "If we did not buy solar locally through FiT, we would need to purchase other renewable energy from outside the city and bring it into Los Angeles."

Under the program, LADWP will sign 20-year power purchase contracts with approved providers at 17 cents per kWh until the first 20 MW are met. After that, the price will drop by 1 cent per kWh under a tiered schedule that ties the price to the amount of reserve capacity left in the program.

The incorporation of more solar and natural gas into Los Angeles' electricity mix, combined with energy efficiency measures, should help LADWP shift from one of the nation's most coal-dependent municipal utilities into a clean energy leader.

According to Nichols, the utility will replace more than 70 percent of its existing energy supply over the next 15 years, with most of the shift involving transitions away from polluting fossil fuels. "Local solar not only increases the level of renewable energy we provide to customers but also helps maintain power reliability as we transition away from coal power," he said.

Energy-hungry city bets on renewables

In fiscal 2010-11, LADWP's power customers consumed roughly 25.2 million megawatt-hours of electricity. More than half that output was consumed by businesses and other commercial customers, while residences used an estimated 7.23 million MWh of power.

All the agency's revenues are derived from the sale of power and water, and it receives no additional taxpayer support. In November, the Los Angeles City Council voted in favor of the utility board's plans to generate as much 460 MW of clean solar power.

In addition to the feed-in tariff solar power program, LADWP has invested heavily in utility-scale solar deployments. Two such projects, the Adelanto Solar Power Project and the Pine Tree Photovoltaic Project, are expected to produce a combined 940 gigawatt-hours of clean power over 25 years.

Another 250 MW solar plant has been proposed for utility-owned land in Kern County, and the city has negotiated power purchase contracts to bring renewable energy into Los Angeles from utility-scale arrays in neighboring Nevada.

LADWP also generates 150 kW of solar electricity at two sites at the Port of Los Angeles and has plans to install 490 kW of solar capacity atop its Ascot and Susana water tanks.