The recently approved feed-in tariff program in Los Angeles, voted on by the Los Angeles Department of Water and Power (LADWP) Board of Commissioners on January 11th, has sparked a good deal of coverage over both questions and concerns – mostly surrounding how well the program will perform. Those interested in the incentive won’t have to wait long for answers. The program is set to open the first of five 20-MW rounds on February 1st, and is already receiving early applications. Applications will be reviewed on a first-come, first-serve basis.
The pricing for the program, which begins at $0.17/kWh and will drop by one cent per kWh each round, does not have an escalator attached to it. For each 20 MW increment, 4 MW will be reserved for smaller projects between 30 and 150kW. The total capacity of small projects can exceed this limit, but the total capacity of projects in the 151 kW-3 MW range cannot exceed 16 MW for each 20-MW round.
If a round goes undersubscribed, the pricing will roll over but the capacity will not. For example, if contracts for only 8MW of the first 20 MW round are awarded at pricing of $0.17/kWh, the next round will still only award 20MW of contracts, but the first 12 MW will receive pricing of $0.17/kWh while the balance of the round will drop to $0.16/kWh. This policy is designed to prevent a spike in workload for the staff of the FIT program, avoiding delays and ensuring that the program can progress on schedule. If at the end of the program there is a significant amount of capacity left unsubscribed, it is possible that LADWP will consider releasing an additional program to fill it.
If the program is oversubscribed, LADWP will continue accepting applications but will not reserve allocations for systems in the queue. Once the full 20 MW of one round is awarded, applicants still on the wait list will be notified and must re-apply for the following round at the lower pricing. While LADWP does not expect the program to become oversubscribed initially, they do expect that within a round or two developers and installers will become familiar enough with the program to eventually fill it to capacity. However, launching the full program at a price lower than the average price for the pilot program, then decreasing it twice per year, may limit the number of successful projects built through this feed-in tariff.
Details on required application documents can be found in the packet of information released to the Board of Commissioners that is available here. The application process for this program is also very similar to the pilot program that preceded it, making it easy for developers to apply early.
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