FiT Facts
An Opportunity to Create New Jobs for LA While Meeting Our Energy Goals?
By Maureen McDonald, Vice President, PsomasFMG |
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Solar panels that could generate income for a business owner under a Feed-in Tariff policy
Designed to spur the development and increased use of renewable energy, a Feed-in Tariff (FiT) is a policy mechanism that enables public and private entities to generate power from wind, solar or other renewable sources and sell it back to their utility through the electrical grid. The success of a FiT program is closely tied to how compensation rates for renewable power are set. If investors cannot obtain a reasonable rate of return on renewable energy investments, they are unlikely to participate in the program.
Germany’s FiT program has served as model for others around the globe, demonstrating how the tariff can spur both the expansion of renewable energy generation and economic growth. Created as part of Germany’s Renewable Energy Sources Act of 2000, this program has shown that determining compensation rates on a generation-cost basis rather than on an avoided-cost basis is a key to prompting investors to participate.
In 2007, the German government released a report that estimated the Renewable Energy Sources Act produced an economic benefit of approximately $8.5 billion per year.Approximately 240,000 people in
Germany
were employed in the renewable energy sector in 2006, representing a 40% increase over 2004. Sixty percent of the new jobs created during this period were attributed to the Renewable Energy Sources Act.
Net metering programs provide another policy mechanism for encouraging onsite renewable energy generation. As opposed to FIT programs, which allow participants to sell renewable energy back to utilities through the grid, net metering programs provide incentives to ratepayers to offset some of their existing energy usage by generating renewable electricity onsite. At present,
California
’s renewable energy rebate program applies to net metered systems but not FiT systems.
FiT programs are in place in numerous jurisdictions around the world. The European Commission performed a detailed analysis of different policies to encourage renewable energy development and concluded that “well-adapted feed-in-tariff regimes are generally the most efficient and effective support schemes for promoting renewable electricity.”
There is no reason that
Los
Angeles
could not implement a successful FiT program. A well-designed FiT would lead to rapid investment in renewable energy, allowing the Mayor and the city to meet its renewable energy goals. Larger systems located outside of the city limits will take much longer to put in place. A generation-cost based FiT would allow
Los Angeles
to transform unused assets of many businesses – namely roofs and parking lots – into the site of renewable energy systems generating clean power for the city. At the same time, businesses would be able to make a reasonable return on their investment. UCLA is conducting a study, commissioned by the LABC, on the application of the FiT to
California
and
Los Angeles
. The results of this study will be available at this year’s Sustainability Summit on April 6th.
Los Angeles needs to invest in its future. A well-crafted FIT program would result in significant reductions in Green House Gas emissions, while expanding investment opportunities for businesses and creating jobs for many years to come.
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On
The Roof
Solar Panels on So. Cal Businesses
AEG’s Staples Center has installed 1,727 solar panels on its roof, creating a 345.6 kilowatt system that will eliminate over 10,000 tons of CO2, more than 27 tons of sulfur dioxide and over 33 tons of nitrous oxide over the next 25 years
Wal-Mart now has four Southern California stores equipped with solar panels that generating an estimated 30% of each of the facility’s energy needs.
MGM Tower, Century City, recently equipped the top deck of its parking structure with 1,408 solar panels, generating an estimated 570,095 kilowatt-hours annually. |
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The L.A. City Councilwoman On Green Building, Renewable Energy and Business Growth |
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The Honorable Jan Perry (center) cuts the ribbon on the new satellite City Hall on 43rd Street in South L.A.
The Honorable Jan Perry is the
Los
Angeles
City
Councilwoman for the 4th district, which covers parts of Downtown and
South L.A.
This is her third and final term on the Council. She chairs the Energy and Environment Committee, which was integral to the passage of the 2008
Green
Building
Ordinance. This ordinance calls for a 35% city-wide carbon footprint reduction by 2030 and requires new building projects greater than 50 units or 50,000 square feet to comply with LEED Certification.
You played a big role in bringing to fruition the Private Sector Green Building Ordinance sponsored by the LABC in April 2009. How do you see it as setting the precedent for green policy in the City of
L.A.
?
I think that it was a balanced ordinance in that it didn’t discourage new construction. It makes new construction more energy efficient, which will benefit property owners. The savings can be transmitted to the tenants. When we talk about strategies for creating sustainability, energy efficiency is something we do have in our control. It’s something you can embrace on a small level, like with CFLs [Compact Florescent Lights], which are low-tech. There are also higher-tech approaches, such as integrating renewables into your portfolio.
How do the green building features of the new satellite City Hall on
43rd street
relate to this vision?
City Hall is a Silver LEED building. It was built subject to a competitive bidding process with energy efficiencies with respect to lighting, water usage, and waste-water recycling. The cabinets are made from composite recycled materials. And, it’s the first LEED Certified building in South L.A.
One renewable option that the LABC has been exploring, through our UCLA study on Solar Power, is the Feed in Tariff. We recently presented some of our findings to you at City Hall. Do you see the FIT as a viable option in helping the city achieve job growth and their renewable goals?
I liked what I saw because it had a logical progression associated with it, like which parts of the market to plum with the proposal. I felt that [the study’s initial findings] provided a very clear path for a consumer to self-direct their energy efficiency. I’m looking forward to the second phase of the report and an information briefing.
Why should
L.A.
Businesses be concerned about renewable energy?
Because I think for a business, ultimately, the use of renewable energy would allow it to control and reduce its costs, and put those savings into physical and capital infrastructure, even if the savings are a reduction of tax liability or in the granting of tax credits. There are some programs at the federal level but that’s at its early stage of its evolution. I think there will eventually be renewable energy tax credits on the city level. That is something that the business tax advisory committee will tackle.
What are some recent business-stimulating initiatives you’ve supported in your district?
I’ve been involved with L.A. Live from the very beginning, working on entitlements, making sure that were granted and making sure they were able to hire locally. At the L.A. Live opening, a gentleman who was working the event also works in a graffiti removal project in my district. So that worked. I’ve also been working on more permanent, supportive housing. There’s the New Carver, a new grocery store with housing on top, the Paul Williams building at Jefferson and Central and, to return to the beginning of our discussion, the new City Hall at 43rd and central.
—Interview by Adam Jacobson |
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February
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Legislative
Meeting
Wednesday, February 10, 2010
12:00 - 1:30 p.m.
Latham and Watkins
Speaker: Bud Ovrom, General Manager,
Los Angeles Department of Building and Safety
Energy & Environment Committee Meeting
Tuesday, February 16, 2010
4:00 – 5:30 p.m.
Century Plaza Towers, Main Concourse Level,
Conference Rm A
LABC Board Meeting
Date: February 22, 2010
5:00 – 7:00 p.m.
Staples Center
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March
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Back to Business Breakfast Forum
The Future of Green Building and Development
March 2, 2010
7:30 – 9:30 a.m.
The Regency Club
Moderator: Gail Goldberg, Director, City of Los Angeles Planning Department
LABC @
Access Washington, D.C.
March 15-17, 2010
The Sofitel Washington DC Lafayette Square
Legislative Meeting
Wednesday, March 24, 2010
12:00 - 1:30 p.m.
Latham and Watkins
Special Topic:
State of California Comprehensive Water Package
Partner with BOMA and LA Chamber
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REGISTER NOW!
Building a Green Economy:
Connecting Sustainability to Business and Job Creation
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Tuesday, April 6, 2010 7:30am-2:30pm
Harold M. Williams Auditorium, The Getty
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Solar Study Starts
The first phase of the LABC/UCLA study of a potential feed-in tariff in Los Angeles is complete. Overseen by Dr. J.R. DeShazo at UCLA and underwritten by the LABC and several partners, the study will contribute to the discussion about the future of solar generation in Los
Angeles by assessing the potential of a comprehensive Feed-in Tariff in the county. The study estimates the likely future costs of rooftop solar energy development, projecting the likely rates of participation and generation capacity under various alternative Feed-in Tariff scenarios. Phase II of the study—to be released at this year’s LABC Sustainability Summit on April 6th—will present findings estimating the number of jobs and solar power that could be generated under a model FiT policy in Los Angeles.
LABC Going
to Washington
During March 15-17th , LABC will be returning to participate in the Access Washington D.C advocacy trip. Once again, the LABC will be co-chairing the Green Business and Climate Change Committee. As in years past, the LABC will provide supplementary programming including LABC member-only lunches and dinners with leading policymakers. Please contact Michelle Garakian for more details: Mgarakian@labusinesscouncil.org
Update from the Legislative Affairs
committee:
At the first LABC joint legislative affairs and
Housing committee meeting, Doug Guthrie, the new General Manager of the
L.A. Housing Department, presented his goals for 2010. Among them is the
need to manage core operations, revisit the
Affordable Housing Trustfund, coalescing the agendas of other city and county
housing programs for more unified results, tweaking the program to implement
NSP2 funds, looking at old yet innovative ideas for increasing the affordable
housing stock such as density bonuses, and finally focusing on innovative
opportunities to integrate green building practices in the LAHD
developments. The LABC looks forward to helping General Manager Guthrie in
exploring new ideas and opportunities in achieving these objectives.
The Legislative committee voted to send a letter to Ray LaHood,
Secretary, US Department of Transportation, requesting support and assistance
for the New Starts funding for preliminary engineering of the Westside
Extension of the Purple subway line and the Regional Connector light rail
projects . The LABC also
voted to support the Housing Commission's Rent Stabilization Ordinance
regulation for Lincoln Place .The LABC joined with the LA Chamber, LAEDC, Global
Green and others and sent a letter of
concern to PUC regarding state consideration of a reverse auction scenario in
lieu of the widely supported state FIT.
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One Week Left to Submit a Project!
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Submit nominations for the best architectural projects in LA by Friday, February 19th!
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Just Confirmed...
Keynote Speaker:
Henry N. Cobb,
FAIA
Founding Partner, Pei
Cobb Freed & Partners Architects LLP
Emcee:
Christopher
Hawthorne
Architecture Critic, LA Times
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The LABC is an Allied Association of the
Crocker Symposium
Tuesday, March 23, 2010
Hosts: LA County Bar Association and Ziman Center for Real Estate at UCLA
Location: LA Convention Center
*Special discount for LABC members
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2010 Marquee Events
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Building a Green Economy
Tuesday, April 6, 2010
The Getty |
June 29, 2010
JW Marriott Los Angeles
at L.A. Live
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Fall 2010
UCLA, Korn Auditorium
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