January 18, 2011

Ron Nichols, General Manager

Los Angeles Department of Water & Power

Re: Solar Virtual Net-Metering for Multi-Tenant Buildings

Dear Mr. Nichols,

On behalf of the solar, environmental and community signatories of this letter, welcome to Los Angeles
and to a new chapter in clean energy for the City.

We would like to draw your attention to the enclosed December 28, 2009 letter from California
Attorney General Edmund Brown Jr. calling for “virtual net metering, or an equivalent concept, [for] all
multi-unit buildings, in order to facilitate the development of customer-generated solar power in
California.”

Under current Los Angeles Department of Water and Power tariff rules and structures, multi-tenant
buildings cannot benefit from installation of a single photovoltaic array to serve the electrical needs of
the entire building because the power generated may be credited only to a single meter.

The cost of physically rewiring a multi-tenant building to put in a master meter is estimated at $60,0001 -
an obstacle that the Attorney General cites as the “top barrier to full and effective customer-generated
solar development on multi-unit structures in the state.”

“Virtual net metering” allows electricity produced by a single solar array to be credited to the benefit of
individually metered tenants such that the electricity produced by the system is net-balanced against
total building electricity consumption as if the building had a single, or “virtual,” master meter.

The California Public Utilities Commission established virtual net metering for affordable multi-family
housing in a decision issued on October 20, 2008 (Decision Establishing Multifamily Affordable Solar
Housing Program Within the California Solar Initiative, D.08-10-036), noting “there is nothing limiting the
virtual net metering concept to the affordable housing context.”

In his letter Attorney General Brown applauds the development of virtual net metering for affordable
multifamily buildings, and calls for further action to allow virtual net metering for all multi-tenant
properties.

In a recent decision regarding the LADWP Solar Incentive Program, the Los Angeles City Council advised
LADWP to implement a 90-day solar rebate moratorium beginning Jan 1st, 2011 – and to use the
moratorium to determine a more equitable distribution of rebate funds. Virtual net metering addresses

1
Interstate Renewable Energy Council; Community Renewables: Expanding Opportunities for Customer
Investment in Solar Energy; September 21, 2010.
critical shortcomings of the current program and allows for a more equitable distribution of rebate
funds with the participation of multi-tenant properties in the Solar Incentive Program.

One year has now elapsed since the Attorney General’s call for action – and we urge you to make it a
priority to extend virtual net metering to all multi-unit buildings, in order to facilitate the development
of customer-generated solar power in Los Angeles.

Sincerely,

Alexandra Kravetz, the Vote Solar Initiative

Ben Higgins, Director of Government Affairs, Mainstream Energy Corporation/REC Solar, Inc.
James Brennan, Open Neighborhoods
Jim Stewart, PhD, Chair, Sierra Club Angeles Chapter Global Warming, Energy & Air Quality Committee
Dr. JR DeShazo, UCLA Luskin Center Director, Associate Professor for Public Policy
Mark Davidson, NRG Systems
Mary Leslie, President, Los Angeles Business Council
Mary Luévano, Policy and Legislative Affairs Director, Global Green USA
Sherri Akers, Community Environmental Activist

Cc:
California Governor Edmund Brown Jr.

The Honorable Mayor Antonio Villaraigosa

The Honorable Eric Garcetti, President, Los Angeles City Council

Councilmember Bernard Parks
Councilmember Bill Rosendahl
Councilmember Dennis Zine
Councilmember Ed Reyes
Councilmember Greig Smith
Councilmember Herb Wesson
Councilmember Jan Perry
Councilmember Janice Hahn
Councilmember Jose Huizar
Councilmember Paul Koretz
Councilmember Paul Krekorian
Councilmember Richard Alarcon
Councilmember Tom LaBonge
Councilmember Tony Cardenas

The Honorable Thomas Sayles, President of the Board, Water and Power Commissioners