The Los Angeles Department of Water and Power (DWP) recently began a pilot feed-in tariff (FiT) program, allowing commercial property owners to sell energy captured with solar panels back to the DWP. This is a second attempt based on an earlier net-metering program which included residential properties. The previous program frustrated customers and produced little return due to processing delays and poor customer service.

Commercial warehouses and multifamily buildings qualify for FiT if they have:

  • at least a 30-kilowatt capacity; and
  • an approved solar energy system.

The pilot program presently allows 30-50 participants, though the program is hoped to expand in the future.

Owners apply to the program and may sign a contract for up to 20 years with the DWP. The maximum amount the DWP will pay its participants is 30 cents per kilowatt hour. (It takes a 100-watt light bulb 10 hours to consume one kilowatt hour.)

FiT officials claim the program has the potential to create thousands of California jobs needed to install and service the solar systems. If successful, the program plans to expand over the next four years, creating 4,500 jobs by 2016.

first tuesday take

FiT offers a forward-looking glance to where commercial properties are headed.

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A tip: If a commercial property has vacancies, encourage the owner to install energy efficiency improvements now. Take the down time as an opportunity to make the property more financially attractive to users. The space will be more appealing to users since utilities bills will be less. Renovations and updates to an empty building do not interfere with possession, and will add rental value to the premises.

Government programs offer incentives in the form of subsidies for commercial and residential buildings to install solar panels.  Loan programs are available to finance solar projects, including Property Assessed Clean Energy (PACE), providing low-cost, 20-year property improvement loans paid annually with the property tax bill. Thus, if an owner sells the property before the loan terms are fulfilled, the loan may be taken over by the buyer as existing financing which does not need to be prepaid.

Commercial brokers and agents: To see if you or commercial property owners you represent qualify for this or other financing programs, visit the California Energy Commission’s website on solar initiatives.

Re: Solar power producers hesitate to embrace new DWP program from the Los Angeles Times