By Aaron Blevins, 2/28/2013
Solar energy continues to be more and more viable for homeowners in Los Angeles, as technological advances continue to drive costs down. However, the use of solar panels remains contingent on incentive programs and tax credits.
According to the Los Angeles Department of Water and Power (DWP), approximately 6,000 to 7,000 customers have added solar to their homes since 1999, with the utility adding 50 to 100 new customers to its incentive programs each week. Yet, the renewable energy source still needs fine-tuning.
“It’s really a customer decision that needs to be made,” said William Glauz, DWP’s resource planning and solar energy development manager. “Typically, still today, if you install solar, it’s not going to be significantly cheaper [for utility customers]. You’re doing it because you want to be green and environmentally conscious. Probably not in the too distant future, we’re probably going to see that it will be very cost-effective for customers to do their own solar.”
He said the benefits of solar energy still depend on incentives and other factors. The DWP has two incentives — the Solar Photovoltaic Incentive Program primarily for residences and the Feed-in Tariff (FiT) program, which is geared toward commercial entities.
The solar incentive program provides a lump sum to DWP customers who purchase or lease solar systems. When a customer’s system produces more energy than what the customer uses, the ratepayer receives a credit.
Glauz said the incentive is mainly based on the expected production. He said several factors can affect the system’s output; for example, a system facing north or east will not likely generate the energy that a south- or west-facing system will. The utility does offer a website calculator to determine potential savings, and solar companies frequently offer a ballpark estimate.
“It will vary depending on how good a system you design,” Glauz said, adding that the program has been helped by federal tax credits, such as the Solar Investment Tax Credit, which offers a 30 percent credit on income taxes. “We’ve essentially doubled [the number of customers involved] every year for the past three years.”
Robert Romanin, the owner of California Solar Energy, which serves the greater Los Angeles area, said the cost-effectiveness of a solar power system can often depend on customers’ electricity provider. Other factors, such as exposure and the size of the module, can also affect a system’s viability, he said.
“It doesn’t work for every homeowner or business because of shading issues,” Romanin said.
The Eagle Rock-area business provides several solar systems, including solar thermal (hot water), solar PV (electricity) and solar pool products. Often, electricity projects depend on roof space, Romanin said.
“You can’t utilize the whole roof space because of the fire code,” he added.
However, modules continue to get more efficient, with systems seeing a 1 percent energy efficiency increase per year, Romanin said. He said the cost of manufacturing solar panels has reduced by almost one-third over the last several years.
Rebates, meanwhile, have reduced as the costs have done down, Romanin said. He said the average system now has a net cost of about $8,000 to $10,000.
DWP’s FiT program benefits renewable energy projects within the utility’s service area. The state-required program allows customers to sell the energy generated from the system — up to three megawatts, the equivalent of powering approximately 850 homes — to the DWP at a fixed price for up to 20 years. Glauz said DWP is looking to expand the program to 150 megawatts-worth of projects sometime this year.
“It’s becoming more feasible, primarily because the price of solar equipment has come down quite a bit over the last couple years,” he added.
The programs are a part of DWP’s commitment to help the state reach its goal of using 33 percent renewable energy by 2020, Glauz said. Currently, 20 percent of DWP’s energy comes from “renewables,” but the majority of that figure is wind energy, he said. Energy from coal provides approximately 40 percent of the utility’s energy now.
“In the next 15 years, it will be zero,” Glauz said.
With the cost of solar energy going down, DWP has opted to pursue the renewable resource. Though solar is less than 1 percent of the utility’s current sources, it could jump to 10 percent by 2020, Glauz said.
“It’ll be growing,” he added.
It also helps the utility distribution system. Customers using solar power reduce the burden on DWP’s existing circuits, which could delay the utility revamping or upgrading its infrastructure, Glauz said.
“You’d provide the electricity right where it’s needed,” he said.
Kristin Eberhard, the legal director of western energy and climate for the Natural Resources Defense Council (NRDC), referenced the state’s renewable energy goals, and said that solar is a part of the solution.
“Every solar panel helps us get to that goal,” she said. “It’s an important part, but it’s not the whole solution.”
Eberhard also said that costs for solar have dropped, and she expects that to continue. She said it is important that utilities plan for additional solar energy customers and come up with ways to bring in more.
“As those costs come down, more and more people are going to be putting them up,” Eberhard said.
She said prices are not competitive right now, so utility programs are vital. Eberhard praised the two DWP programs, saying that they’ve been “very successful.”
She said the NRDC looks at the nation’s entire clean energy portfolio, and the organization is still seeking a large-scale renewable energy resource. Eberhard said NRDC views energy efficiency as a source of power.
“Energy efficiency has the same impact getting us off dirty power that putting a solar panel on your roof has,” she said, adding that it is the fastest growing source of power.
For information, visit www.DWP.com/solar.