On April 28, 2020, the Los Angeles Department of Water and Power (LADWP) received a letter from California Solar and Storage Association (CalSSA) that expressed concerns over solar interconnection fees. The information contained in the CalSSA letter was based on incorrect information, resulting in a misunderstanding within the local solar community and other stakeholders—customers that we value very much.
Shortly after receiving the letter, LADWP staff clarified that there were no recent changes to any costs associated with going solar in LADWP’s service territory. For some stakeholders the confusion over charges has persisted, and LADWP would like to clarify its efforts to ensure adoption of solar continues as a priority within our service territory. Your successful efforts are one of the reasons that the City of Los Angeles (City) has been awarded the No. 1 Solar City three years in a row, and align with LADWP goals for a carbon free utility as well as the City’s Green New Deal efforts.
Periodically LADWP reviews its charges to ensure that LADWP fees are based on actual costs and cost causation. Equity is one of our basic tenets, and this process seeks to ensure that applicable solar costs are not unfairly allocated to those customers that cannot afford or cannot install solar because they do not own their homes—a very large segment of our customer base.
While we recognize any adjustments to fees can create concern and uncertainty, LADWP is doing its part to ensure costs remain reasonable. The LADWP has: a) reviewed our processes, b) reviewed fees at some of our peer utilities, and c) implemented a series of process improvements and streamlining efforts to reduce costs associated with going solar (see following FAQs). Following these important efforts, LADWP is now reviewing its prospective charges to ensure those efficiencies and cost reductions are properly reflected in our proposed fees. The LADWP expects to present these changes to its Board of Commissioners for consideration in August 2020.
Staff expects that LADWP’s proposed solar charges will be assessed prospectively and will be aligned with our peer utilities (currently ranges between $75 and $145), and in many cases will be reduced as a result of these process improvements. To ensure fairness for projects currently in the approval process, LADWP proposes to use the lower of the current charges assessed, or the proposed charges. For new projects after the effective date, the new charges will be applicable and consistently applied.
We appreciate the opportunity to respond and sincerely hope this will help clarify and resolve many of the concerns that exist today. Please see the following Frequently asked Questions to address additional details.
Frequently Asked Questions
“What are the current charges to LADWP customers to install solar?”
The costs for solar customers will vary based on the size of the proposed system, but the following reflect current practices:
- 20 kW and below, no upgrades required. There are no current charges assessed if your solar system is below 20 kW and your interconnection does not require LADWP to upgrade or modify your service. Approximately 90 percent of all solar projects currently have no charges applied.
- Above 20 kW up to and including 30 kW. $3,000
- Above 30 kW up to and including 100 kW. $3,500
- Above 100 kW up to 1 MW. $4,500
- 1 MW and above. Charges are based on specific project scope requirements.
- Any size, upgrades required. If your solar system requires system upgrades, regardless of size, LADWP will only charge customers for costs incurred by LADWP’s engineering, construction and inspection efforts. There are no fees in excess of the costs incurred by LADWP.
“What process improvements or streamlining efforts has LADWP implemented to keep my costs low?”
In 2018, LADWP established a process improvement working group with several solar developer stakeholders. This working group has resulted in significant improvements benefitting customers, LADWP and solar contractors. Some of those process improvements resulting in cost reductions to date include:
- Eliminated preconstruction assessment requirement. The LADWP eliminated the requirement for a preconstruction site assessment for systems30 kW and below, but still makes this option available as a free service to customers.
- Inspections via photos rather than onsite. The LADWP eliminated the requirement for onsite inspections for systems 30 kW and below, but still makes this option available as a free service to customers.
- Simplified paperwork. No interconnection agreement documents are required for solar systems 10 kW and below.
- Performance meters. For projects 30 kW and below, none are required.
- Disconnect switches. For projects 20 kW or below, served 480v single- phase, no utility disconnect switch is required, with some exceptions.
- Project coordination meetings weekly. Available to contractors upon request.
- Accelerated review. For projects that do require upgrades, LADWP reviews within 2 weeks, and completes technical engineering review by the next business day.
- Interconnection. Streamlined interconnection process to have solar connected to LADWP grid within 2 weeks of inspection release.
- Improved communication and escalation ladder. Engineers and inspectors are to respond within 24 hours. If there are communication issues, customers and contractors have the ability to escalate through links provided in every email signature.
“I want to install solar on my home, will I be charged?”
Costs incurred to the LADWP are recovered based on the size of the solar system, including engineering, inspection, administrative costs, and costs associated with installing a new solar-capable meter. As part of its review of charges, LADWP will propose a reduced fixed cost-recovery charge, and would expect that to be in line with other utilities in California, whose interconnection charges range from $75 to $145.
“I’m currently in the process of installing a solar system that requires upgrades. What will I be charged?”
LADWP is proposing to implement its proposed fee schedule prospectively – currently anticipated to be September 1st (subject to change). For any projects under construction or in the approval process at that time, charges will be assessed at the LOWER OF the existing or the proposed charges. For projects commenced after the effective date, the new solar fees will be applicable.
“I already have solar, will LADWP charge me a new fee?”
No. The re-assessment of charges will only apply prospectively to new solar systems not currently interconnected to LADWP’s system.
“What efforts has LADWP taken to increase the amount of solar in basin?”
The LADWP has long been a leader in local solar development, which has led to LADWP being consistently recognized as the No. 1 City in the United States for solar adoption.
- Solar Incentive Program (SIP). As of June 2020, LADWP has invested over $330 million in solar incentives paid to customers to help grow local solar, resulting in nearly 50,000 customers adopting solar totaling over 360 MW. LADWP’s investment in local solar began in 1999 and preceded state incentive mandates. LADWP’s Board of Commissioners (Board) also approved a continuation of the incentive program into 2018, again exceeding state mandates. To ensure SIP’s success, LADWP (a) provided incentives higher than the rest of the State to overcome the challenge LADWP’s low rates posed for solar adoption (b) provided funding carve outs for affordable housing (c) increased incentives in disadvantaged communities (DACs) and (d) partnered with schools to provide tens of millions in incentives to the Los Angeles Unified School District, community colleges, and other schools.
- Feed-in Tariff (FiT) Program. LADWP pioneered the largest FiT Program in the country in 2013 by approving a 150 MW program to help accelerate commercial and industrial adoption of local solar. In 2019, the LADWP Board and Los Angeles City Council approved a significant expansion of 300 MW, increasing the program total to 450 MW. As of June 2020, the FiT Program has resulted in 70 MW, with another 104 MW under development. These projects include some of the largest local solar installations in the world. Additionally, according to University of California, Los Angeles Luskin, a significant portion of the FiT Program has been developed in “solar equity hot-spots”.
- Solar Rooftops Program (SRP). In 2016, LADWP launched the SRP, as part of an effort to increase access to solar for all customers and improve solar equity. As of June, LADWP has installed 32 rooftop solar installations at no cost to customers with hundreds more potential projects in the pipeline.
- Shared Solar Program (SSP). In 2019, LADWP launched the SSP to provide solar access to customers residing in multifamily units by allowing customers to subscribe a portion of their bill to a fixed solar cost for 10 years, effectively hedging against future rising energy costs. As of June 2020, 423 customers have enrolled.
- What’s next? LADWP continues to lead in local solar on its path towards a 100 percent clean energy future and meeting the goals of LA’s Green New Deal. Currently under development is a Distributed Energy Resource (DER) solicitation that will encourage more local distributed resources, including solar, and will be advertised later this year. Staff is also working to launch a FiT update to include energy storage, expected to be presented to LADWP’s Board, also later this year. Additionally, staff is working with stakeholders to pilot a Virtual Net Energy Metering (VNEM) program that will further expand access to renters. All upcoming solar programs and pilots will include considerations to enhance equitable access to solar in Los Angeles.
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