Many people go to Los Angeles seeking sun, power, and money. Now, they can get all three through a solar energy incentive program proposed by the local City Council. 

An estimated 3,000 Los Angeles-area residents have converted their homes to operate solely on solar power, at an installation cost that can run into the tens of thousands of dollars.  To date, the main benefit has been bringing a halt to steep monthly bills from the Department of Water and Power (DWP). But city officials are looking at offering more incentives, such as reimbursing homeowners who generate enough power to sell some back to the DWP grid.

Councilwoman Jan Perry, chair of the Council's Energy and Environment Committee, has proposed a pilot program that would generate 75 megawatts (MW) a year—enough to power about 1,000 homes. “This is the first brick in the foundation,” Perry said. “We need to find a way we can do this without placing a burden on our ratepayers.”

Currently, the state's California Solar Initiative,—also known as Go Solar, California—provides credit to customers who feed power back into the system. But that program will be phased out soon, so the city is looking to establish its own, permanent program.

A solar feed-In-tariff (FiT) project could eventually produce the equivalent power of building a new plant, but without the costs, said DWP General Manager Ron Nichols. Right now, Nichols said, the estimated 3,000 people in Los Angeles who rely on solar household power generate 27 MW of energy. At least two of them are current City Council members.

According to the Los Angeles Daily News, Councilman Greig Smith has been living off the grid since 2008, when he installed a solar system at his Granada Hills home. “We are basically producing enough power to sustain my home,” Smith said. “There isn't a lot of extra power being generated that we could sell.”

He said the system, which cost $80,000 to install, has operated with no power interruptions—and no DWP bills. Smith said the overall cost was reduced through rebates and tax breaks, but he recognizes how difficult it would be for most people to pay for such a system.

“I would like us to look at a system where we loan people the money to install a system and then put the costs on their property bills,” Smith said. “That way, we can stretch out the payment for 10 or 20 years.”

The Los Angeles Business Council  (LABC) has embraced a broad program that they are calling CLEAN LA. The CLEAN (Clean Local Energy Accessible Now) LA proposal would allow businesses and multifamily apartment buildings to install solar panels on their roofs and sell the power generated back to the local utility, creating the largest program of its kind in the United States. Known in policy circles as a FiT, the plan would create $500 million in local investment and create 900 high-paying jobs each year for the next five years, all with a minimal impact on ratepayers.

“Los Angeles ratepayers deserve to profit from the power that solar energy produces,” said LABC President Mary Leslie. “That’s why this unprecedented group of community leaders and industry stakeholders agree that renters and owners must be able to generate solar power and sell it back to the grid in LA.”

Leslie does not see the feed-in tariff as the most effective option for individual households.  “At this point, the feed-in tariff concept doesn't make much sense for homeowners,” Leslie said. “What they need is [an Internet] metering program that shows how much power they are using and what they are giving back.”

But, she said, studies conducted for the Business Council by UCLA and others show there is a huge market for solar panels on multifamily buildings. “Where it can have a tremendous impact [is] on multi-family, low-income properties,” Leslie said. “They can generate 1 gigawatt (GW) of power. What that means is no utility bill for tenants. They could spend that money on services they need.”

Also, Leslie said there is a huge potential market on commercial buildings. “It will be effective throughout the San Fernando Valley, the Alameda Corridor, and South Los Angeles,” Leslie said. “They will be able to generate a lot of the power we need.”

Nichols said California Gov. Jerry Brown recently signed AB 32, the Global Warming Solutions Act, which requires all utilities to generate 33 percent of their power from renewable sources by 2020.

City Council President Eric Garcetti also has been living off the grid and thinks it is worth it. Garcetti said he spent $10,000 for the solar panels on his house and he believes the costs will come down as more people install the panels.

“For the average homeowner, I think it is well worth it,” Garcetti said. “I think they will get the payback in two or three years and then they will be making money by supplying power to the grid.

“Solar experts estimate the cost of a system is about $5 a watt, so a 10 kilowatt system would cost roughly $50,000 to install. One website that allows people to determine the costs and benefits of a solar system is pvwatts.org.