SOLAR INCENTIVE PROGRAM:

Board Briefing Program Modifications and Re-launch August 2, 2011

Solar PV Incentive Program Incentive Dollars

(All numbers are cumulative)

Program Suspension & Review

On April 8, 2011, LADWP suspended the program for at least 90 days, per Section 2.9 of SIP Guidelines.

Progress Report
Doubled funding levels to $66 Million for the next 3 years and financed as capital expenditure. Reduced backlog of applications & reservations requests from 800 to 0. Accelerated and reduced inspection backlog; streamlined internal process. Energized 3.6 MW, representing 555 new customer solar systems; 36 MW more are pending construction completion. Issued 550+ rebate checks totaling $24 Million.

Public Meeting Summary Four Public Presentations & workshops July 14, 9 am to 12 pm & 2 pm to 5 pm. July 15, 9 am to 12 pm & 2 pm to 5 pm. Approximately 430 total participants in attendance, 100 via phone. Comments were received through Wednesday, July 20th. Black & Veatch monitored the workshops and provided a final summary report on feedback.
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Public Meeting Summary

Positive Feedback
PowerClerk General excitement that implementation of PowerClerk will be a positive change for the SIP and will make application easier and more transparent for applicants. Increase Funding Levels Participants supported the increase in program funding and the use of bonds to finance the program expenditures, providing program stability. Government & School Systems Allowed 3 Years Participants viewed this as a very positive change for the program.
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Public Meeting Summary

Major Topics of Feedback & LADWPs Response

Proposal
LADBS Permit Required Prior to Application. 6 Month Program Disqualification for Repeat Deficiencies. Incentive Level Modification

Feedback
Some support. Complaints included project delays and additional cost. Uncertainty over what deficient meant. Also concern that the 6 month disqualification is too lengthy.

Response
Provide permit within 60 days of reservation confirmation with the ability to apply for an extension. Defined deficient as missing contract or energy efficiency requirements, missing or bounced deposit check & > 10 hrs. of unauthorized operation. Reduced disqualification time to 3 months.

Plan to monitor program and modify Many unsupportive, some supportive of lower incentives incentive levels if participation proves to resulting in more MW and better be too low. budget control. Some requested increasing level if undersubscribed. 5

LADWP vs. State Residential Incentive Levels

$5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 1 2 3 4 5 6 7 8 9 10

IncentiveLevel ($/Watt)

Step

ExistingIncentiveLevels

ProposedIncentiveLevels

StateIncentiveLevels

LADWP vs. State Commercial Incentive Levels

$4.00 $3.50

$3.00

$2.50

IncentiveLevel

($/Watt)

$2.00

$1.50

$1.00

$0.50

$0.00 1 2 3 4 5 6 7 8 9 10

Step

ExistingIncentiveLevels

ProposedIncentiveLevels

StateIncentiveLevels

LADWP vs. State Government Non-Profit/Incentive Levels

IncentiveLevel

($/Watt)

Step

ExistingIncentiveLevels

ProposedIncentiveLevels

StateIncentiveLevels

Public Meeting Summary

Major Topics of Feedback & LADWPs Response Cont.

Proposal
Increase Program Funding through Bond Financing.

Feedback
Strong support. Some questions on why we limit the budget at all.

Response
Will increase incentive payment budget to $60M/yr and provide program status on website to show remaining funding levels. Will provide running totals of annual reservation requests.

Annual reservation limit of $40M.

Some concern over boom & bust if suspended again. Concern over knowing when program will be suspended. Concern over equitable distribution of $40M.

Public Meeting Summary

Major Topics of Feedback & LADWPs Response Cont.

Proposal
All leases to be paid at commercial level.

Feedback
Some support, but some also felt proposal penalized leases and with combined incentive reduction would result in a large drop in leases.

Response
Currently, residential leases may take advantage of accelerated depreciation which other residential projects cannot. This gives a disadvantage to non-leases. Residential incentives are higher than commercial for this reason. Will eliminate incentive payment disqualification penalty. Will count inverter operation over 10 hours as deficient which will count towards contractor suspension.
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Incentive ineligibility for Mixed feedback regarding proposal. Many felt losing more than 10 hours of incentive was too harsh a operation. penalty.

Public Meeting Summary

Other Issues

Concern
Participants need more certainty form LADWP regarding solar inspection turnaround times going forward.

Response
Should the full solar inspection backlog exceed 2 weeks, LADWP will immediately implement the accelerated inspection procedure to enable installation of the solar net meter within 2 weeks. PowerClerk will provide process transparency and the LADWP website will be updated frequently with program metrics.

Participants want more program transparency for the entire process.

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Response to Commissioners Questions from July 6, 2011 Board Meeting

How does LADWPs residential solar payback compare to SCE and other SCPPA utilities?

With the proposed incentive levels, LADWPs residential solar payback is 14 15 years, compared to SCEs payback of 10 years. The reason for SCEs low payback is that their electric rates for high use customers are about double LADWPs rates. The payback for SCPPA utilities ranges from 13 15 years. The proposed Feed-in Tariff program will be the most appropriate option for multi-family housing.

What is LADWP doing to encourage the installation of solar on multi-family housing?

Adequate staffing levels will be maintained through exempt or Is the Solar Incentive civil service hires. Program sufficiently staffed to manage existing and anticipated application 12 levels?

Response to Commissioners Questions Cont.

How many jobs has the Solar Incentive Program produced? Based on the Sacramento Regional Research Institutes Stimulus Calculation Tool, the Solar Incentive Program has supported the creation of 1,560 job-years in the City of Los Angeles. Approximately 34 MegaWatts of customer owned solar is installed in Los Angeles, producing roughly 56,000 MegaWatt-hours a year. 36 additional MegaWatts are pending construction completion.

How much solar energy is being produced in the City of Los Angeles?

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SIP Next Steps

Early August, 2011 Seek Board approval & Council review of revised SIP Guidelines

September, 2011

Re-start program: new applications accepted

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