The city of Los Angeles plans to develop and sign contracts for 1,280 megawatts of solar power generation by 2020, but critics question the cost of the plan.
The city-owned utility, Los Angeles Department of Water & Power, plans to install 130 MW of rooftop solar panels on city homes by 2016 and develop 400 MW of commercial and industrial rooftop solar generation by 2014, the city said. The 400-MW piece of the plan would cost $3 billion, but that amount could be reduced by as much as two-thirds if federal tax subsidies, accelerated depreciation and volume discounts are factored in, the city said.
The city hasn't released details for how much the larger plan would cost, or how it would be carried out, and details on the 400-MW component are slim, leading to criticism of the plan.
"Our members want to know how much this 400 megawatts will cost and how much the rate increases will be," said Gary Toebben, president and chief executive of the Los Angeles Chamber of Commerce. "None of this information is available."
As part of the plan, LADWP for the first time would allow so-called third- party ownership of rooftop solar installations, in which someone other than the utility or the customer owns a rooftop solar generator that send electricity to the grid.
The Chamber of Commerce and others approve this part of the proposal, but say they want to see more details.
"LADWP has to present a financial plan," said Sue Kateley, executive director of the California Solar Energy Industries Association. "They have a good idea here to increase solar. How we do that in a way that's helpful for rate payers and the state's overall goal of reducing carbon emissions – those are the details."
The solar industry group supports the plan, but is concerned about the $3 billion price tag for the 400-MW component, which should be much less, Kately said.
"We really want to help them identify ways to lower that cost so we're not catching the blame for a high-cost program," Kately said.
By contrast, the California Solar Initiative, a statewide program run by the state Public Utilities Commission, aims to install 3,000 MW of rooftop solar generation over 10 years for $3 billion.
The city is seeking voter approval for the 400 MW commercial rooftop segment of the plan, which has strong support from unions representing LADWP employees. The proposal includes a provision in which the solar panels would be installed by utility employees. The proposal will go before Los Angeles voters March 3.
LADWP also plans to sign power purchase agreements with developers of large- scale solar thermal plants in the sun-drenched Mojave Desert, with a goal of signing 500 MW by 2020. Contract terms would include a provision giving the utility the option to purchase the plants after about eight years, the city said.
The solar power buildout would allow the utility to boost the amount of renewable energy it uses, from 8% of its total power mix currently to 18% by 2020.
California's three large regulated utilities, owned by Edison International ( EIX), PG&E Corp. (PCG) and Sempra Energy (SRE), have been working to meet state requirements to use renewables for 20% of their power mix by 2010. LADWP isn't bound by those requirements. However, pending state legislation would require LADWP and all other California utilities to use renewables for 33% of the power they sell by 2020. The 33% target is a centerpiece of the state's climate change plan and a priority of Gov. Arnold Schwarzenegger's administration.
In contrast to LADWP, Edison unit Southern California Edison, which operates near LADWP's service territory, uses renewables for 16% of its retail power.