Critics Question Financial Aspect of L.A.’s Solar Plan

December 2, 2008

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Last week, Los Angeles Mayor Antonio Villaraigosa announced plans for 10 percent of L.A.’s electricity to come from solar power by 2020. The city plans to develop and sign contracts for 1,280 megawatts of solar power, but critics question the financial aspect of the plan, CNNMoney.com reports.

The city hasn’t released details on how much the plan would cost, or how it would be carried out. But as part of the plan, the city-owned utility, Los Angeles Department of Water & Power, for the first time would allow third-party ownership of rooftop solar installations.

Sue Kateley, executive director of the California Solar Energy Industries Association told CNNMoney.com that “LADWP has to present a financial plan.” She says the utility has the right idea but wants more details on, “how do we do that in a way that’s helpful for rate payers and the state’s overall goal of reducing carbon emissions.”

Jack Humphreville, a neighborhood council member told LA Times that, “there is one huge assumption here –that [LADWP] will get these huge tax credits, volume discounts and economies of scale.” Humphreville who has been pressing the utility to appoint a ratepayer advocate says, “I have serious questions about whether [the assumption] is pie-in-the-sky or not.”

In response, the utility’s general manager and chief executive, H.David Nahai, told LA Times that his agency will spend the next 90 days developing a financial analysis of the solar plan and its effect on ratepayers.

Southern California Edison has plans to install 250 megawatts of solar panels on 65 million square feet of roofs – that’s two square miles – of Southern California commercial buildings at a cost of $875 million.

Duke Energy has decided to cut its $100 million distributed solar rooftop program in half after the company was criticized by companies such has Wal-Mart as being “unfair.”

Duke Energy’s new program will spend $50 million to install 10 megawatts of solar panels in North Carolina. Under the new program, customers will pay on average an extra 8 cents per month as opposed to an extra 34 cents under the original plan.

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