AGS Co-Founder Michael Gottlieb recently interviewed James Brennan, founder and president of Open Neighborhoods on the Los Angeles Department of Water and Power’s launch of a new solar feed-in tariff program in advance of his recent talk for the Valley Green Team. The program allows large residential and commercial properties to sell back power generated by their solar power systems to the LADWP.
You can read the interview below.
SPEAKER SPOTLIGHT: JAMES BRENNAN FOUNDER AND PRESIDENT OF OPEN NEIGHBORHOODS
This month the Los Angeles Department of Water and Power began accepting applications for the new solar feed-in tariff program. The FiT program, which was approved last year, enables the LADWP to purchase energy generated by solar arrays on large rooftops, parking lots and other areas throughout the city and is expected to generate more than 4,500 jobs, $500 million in economic activity and offset 2.25 million tons of carbon dioxide emissions by 2016.
James Brennan, who was central to developing the largest group solar installation in Los Angeles to date, was an advocate for the program. Brennan is Founder and President of Open Neighborhoods, program administrator for the GoSolar.LA, regional portal to streamline and accelerate solar energy procurement in the greater Los Angeles region. A portfolio company of the LA Cleantech Incubator, Open Neighborhoods provides free solar evaluations, discounted solar installation programs and online project bidding services through a network of pre-qualified contractors.
Q&A with James Brennan
VGT: What was the biggest challenge to getting the FiT program started?
BRENNAN: Bringing together the collective circle of the City Council, Mayor’s Office, LADWP and community organizations to get them on the same page. Having a consensus is a major driver of change. The LA Business Council provided tremendous leadership to keep the process moving and engage a broad CLEAN LA coalition of stakeholders.
VGT: How would you define your role in this effort to launch the FiT program?
BRENNAN: Our experience working with group solar projects led us to advocate for less restrictive programs allowing more residents and businesses to participate and benefit directly from renewable energy. We view the FiT as a solution to barriers in the marketplace that previously limited access to solar energy. For example, some of the best rooftops in residential neighborhoods tend to be multifamily properties, but the LADWP’s traditional approach to solar did not support buildings with multiple tenants. We advocated for the FiT to help make rooftop solar an option for many of these properties – and also to provide a more reliable, cost-effective and cleaner source of energy for our neighborhoods.
VGT: You have completed several group solar programs and you are working on the largest, most affordable group solar program in the city’s history, so you were very well positioned for being involved in the launch of the FiT program.
BRENNAN: Yes. We are on the ground and in the trenches and we know where the practical limitations are. We also were able to help articulate the benefits of the FiT program to the existing power grid.
VGT: What do you see the biggest benefits of the FiT program to the city?
BRENNAN: A huge benefit to the city, and to rate payers, is reducing the cost of power distribution and in particular not to have to invest is as many electric power substations. A recent study found that more rooftop solar power could help Edison and California’s biggest utilities each save an average $30 million per year by not having to build new substations. Net savings to LADWP may be even greater. A single new neighborhood substation can cost from $25 million to 50 million.
VGT: Did you ever reach a point where you thought it wouldn’t advance?
BRENNAN: No. It did have a sense of inevitability about it since the FiT is mandated by state law (SB 32).
VGT: The application period opened on Feb. 1 for the first 20 megawatts of the program. In July, there will be a second offering. Do you have a sense of the initial interest?
BRENNAN: The first round has probably exceeded all expectations. In the first week of the program LADWP received enough applications to fill out all 100 megawatts, though only 20 megawatts were being offered. The large tier is now full, though I believe the small tier still has opportunities. There is a limited window of participation for this round, so now is the time to start preparing for the next 20 megawatt round in July.
VGT: Based on this response, what does this bode for the future of FiT?
BRENNAN: There has been tremendous pent up demand for commercial solar in LA. This July, there will be two solar power programs available, one will be the net metering program and the other the next round of the FiT program, which together will help address the pent up demand. There also is commercial solar water heating incentives available. While the 100 megawatt FiT program is the largest and most cost-effective of its kind in the country – it will need to be expanded to keep up with growing demand for more solar energy in sunny Los Angeles. Mayoral candidates Eric Garcetti and Wendy Greuel have endorsed expanding LADWP’s solar program to 1,200 megawatts.
VGT: What’s it going to take for this to be an ongoing program?
BRENNAN: The message to business is you need to start the process. You need to have your financing and contractors in place, which generally requires little to no upfront investment. You need to be ready for when the next window of opportunity is presented. Then you just have to have someone on your team who is ready to submit your application when the next opportunity comes. We also should start thinking bigger about the size of these programs proportional to LA’s rooftop capacity – and consider the financial benefits of putting local generators in our neighborhoods. The key is to realize the value that these systems provide to ratepayers more than offsets the price per unit of power generated.
VGT: What is the biggest thing you took away from being on the ground floor of this process that you applied to your business?
BRENNAN: There is overwhelming support for taking action to create green jobs and address climate change in this city. There are a lot of different points of view about how to do this, but locally there is very broad awareness and support for seeking solutions to our energy situation and taking action now. I think that is something we don’t always realize as local businesses.
Also there is a lot of excitement about this program because it is new. Every commercial business should realize that there are multiple programs available to them and the best solution for their business will vary. Depending on how a particular building is set up, a variety of options will determine what the best configuration of solar will be for their rooftop. Our goal with GoSolar.LA is to simplify and streamline the process by offering free rooftop evaluations and project bidding services.
VGT: Will the FiT program generate green jobs?
BRENNAN: Yes and the impact of those jobs are very broad based. These are all construction projects that will create a lot of new investments in our local neighborhoods. 100 megawatts of new solar construction will create an estimated $400 million of investment and capture more than $120 million in federal tax incentives. Solar power generates more than 7 times as many jobs per megawatt of power as either coal or natural gas. The 4,500 jobs the FiT program will generate along with energy asset creation all adds up as a definite boost to the economy.