TODAY’S STUDY: A SOLAR PLAN FOR A BIG SUNNY CITY (THE LOS ANGELES F-I-T)

Sharing Solar's Promise: Harnessing LA's FIT to Create Jobs and Build Social Equity April 2014 (USC Program for Environmental and Regional Equity and UCLA Luskin Center for Innovation)

Executive Summary

Los Angeles launched the nation’s largest Feed-in Tariff (FiT) In Basin Solar program in 2013, helping to catalyze an emerging market for multifamily housing, commercial, warehouse and industrial rooftop solar. While the program has met with some initial success, and has positioned Los Angeles to play a larger role in a burgeoning sector that has made California the nation’s leader in solar employment, there is more to be done to achieve the full promise of the program.

Part of the promise of a properly designed and well-implemented FiT is that it will drive economic growth, enhance environmental sustainability and create social equity in the workforce. After all, creating career ladder jobs through rooftop solar installations will expand the local economy and lead to a dynamic job market. The potential is clearly there: as evidenced in previous reports (and updated here), Los Angeles has numerous solar equity "hot spots," areas with rooftops waiting for conversion in disadvantaged areas in need of career ladder employment.

Developing a strong in-basin solar market is essential to the City’s efforts to increase solar production. Commercial projects are less expensive per kWh than residential projects, and are often located nearby socioeconomically disadvantaged populations that could, with training and attention to networking and placement, access solar employment.

According to the 2013 California Solar Jobs Census, California leads the nation in solar jobs, accounting for about one-third of the nation’s total solar industry employment. Within the state, solar job growth (8.1 percent in 2013) outpaced overall job growth (1.7 percent). And this solar job growth is resulting in new hires; nearly three-fourths (72.2 percent) of solar-related firms with job growth hired new workers in 2013. Assuming the new hire trend continues, this will create career ladder opportunities for disadvantaged and entry-level workers.

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Los Angeles should be leading the state in solar production and jobs, but instead is lagging. The Los Angeles Department of Water and Power (LADWP) has the capacity to deliver the largest rooftop solar program in California but falls behind other utilities in solar production per person, particularly in commercial rooftop solar development. Furthermore, Los Angeles has untapped rooftop potential in high-need neighborhoods. The FiT was designed to provide a pathway into the commercial solar rooftop market while also stimulating local job growth – and, if implemented well, could help secure Los Angeles’ future as a statewide and national leader in in-basin rooftop solar production.

The good news is that the FiT is finally starting to realize its potential. From the gleaming solar panels on the roof of the 86-year-old California Trophy Company to those atop Oxnard Plaza Apartments in North Hollywood, new solar projects are accelerating. Over 40 percent of the proposed FiT projects located in Los Angeles' solar equity "hot spots" are in neighborhoods with high solar rooftop potential and also are in high socioeconomic and environmental distress. Indeed, while the majority of proposed projects are located in the San Fernando Valley (which has more pockets of socioeconomic distress than many observers realize), there are also a notable number of small projects proposed in and around Downtown Los Angeles and a concentration of larger projects near the Port of Los Angeles. While not all projects are in low-income communities, the solar programs will create the opportunity for career ladder jobs that are easily accessible to potential workers residing in or near those areas.

Los Angeles is home to a ready workforce. When it comes to innovative solar workforce training programs, Los Angeles excels in the quality, quantity and geographic diversity of its programs. FiT solar projects are connecting local workers through several innovative partnerships between solar providers and organizations with workforce training programs in economically deprived communities. One example: PermaCity Solar’s 5.1 MW project in Lincoln Heights is recruiting workers locally and also hiring graduates of the East Los Angeles Skills Center’s (ELASC) Photovoltaic Installer Program while conducting outreach toother programs.

The FiT program has attracted new solar firms to Los Angeles, incentivized individuals to create new small businesses and provided a pathway for existing firms to expand their operations. All of these actions have created the foundation for a larger, in-basin solar industry. There are some key success stories that illustrate this potential, and many proposed projects are likely to achieve the solar equity future that is envisioned in this report. There is also spillover potential for manufacturing, particularly for niche and racking products: PermaCity has developed a solar racking technology that Orion Solar Racking, another local firm, will manufacture.

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While the future for the solar rooftop program is bright, three major challenges need to be addressed to ensure further progress and better connect the environmental, economic and equity issues. First, uncertainty about the future of the FiT’s scale and program design, which currently discourages solar providers and property owners from participating in the program. Second is the disconnect between the FiT and workforce development programs that serve disadvantaged communities and workers Third, limited awareness about the existing solar program despite LADWP and Los Angeles Business Council hosting over a dozen FiT technical workshops.

We have market uncertainty and lack of clarity on the program design, especially the fact that the costs of interconnecting to the grid are not always identified or quantified beforehand and that permitting for actual construction and local manufacturing can be difficult and unpredictable.

Connectivity is not just about hooking up solar to the grid –it is about creating direct links between the program and opportunity for the region’s unskilled workers. The FiT program needs clear goals and incentives for employment, including credits and/or identified benefits for creating career ladder jobs for the unskilled workforce. While getting that first job is important, firms and workforce developers do recognize that the pathway to the middle class means creating career ladder jobs which allow installers and first-time workers to develop skills which allow them to move up the to employment ladder.

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How should Los Angeles move ahead?

Our first recommendation is to scale up the FiT program significantly (from its current 100 MW to 600 MW), as this scale would add certainty as well as greater economic development potential.. We also discuss the need to maintain a mix of small and large projects in that growing portfolio as well as further refine the application process and lottery system.

To increase the job impacts of the program, new types of “solar equity” incentives should be added to the FiT. We specifically suggest that the program should encourage solar job creation in high-need areas, and that disadvantaged worker credits and local business preferences be built into the program.

We also suggest further streamlining of the permitting process. The Los Angeles Department of Building and Safety (LADBS) is changing its policies to more efficiently process and increase the impact of solar projects. Los Angeles Mayor Eric Garcetti recently announced that LADBS is creating online permit processing for small residential solar projects as a part of PermitLA. We recommend that LADBS adapt its online solar permit processing – which is in the process of rolling out – to include commercial, industrial, warehouse and multifamily residential projects as well.Online processing will mean an end to long wait times in the application process, which developers cite as a key challenge.

We also recommend that LADBS implement a Priority Plan Check for the DWP FiT carve-out projects (30kW to 150kW systems). This approach is similar to earlier incentive programs for “green” or LEED- certified buildings. This strategy would prioritize smaller FiT projects and put them first in line with the Plan Check engineer, ahead of other projects. As stated before, a notable number of small projects in and around downtown LA can be attributed to the LADWP carve out, which must continue in order for solar developers to be incentivized to continue working with small property owners.

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There is more at stake for Los Angeles and the region than just making the best use of the city’s abundant sunshine. Many people still think of Los Angeles as a land of suburban sprawl, wrenching inequality and environmental distress. But overthe last decade a new Los Angeles has been emerging: commitments to infill development and public transit, a rising concern for the working poor and a desire to be one of America’s greenest cities are pointing the way to a different future. Bridging the gap between the old and new are diverse coalitions and innovative policies. A scaled-up FiT could help pave the pathway to a Los Angeles that merges livability and inclusion, clean air and clean technology, and helps to unite diverse communities of Angelenos across the city.

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