News / How California Businesses Are Earning Money From Solar
solar panels on roof

Savvy Los Angeles business owners have long been aware of the myriad of benefits that solar energy offers. From reduced operational expenses to the marketable optics of supporting clean energy, solar helps these businesses put their rooftops, parking lots, and open spaces to work in order to boost their bottom line and benefit the planet. While some businesses opt for onsite “behind the meter” solar, others are taking advantage of a different opportunity offered by the Los Angeles Department of Water and Power (LADWP) known as the Feed-in Tariff (FiT) program.

Here we will explain how the LADWP FiT program works and why LA businesses should consider utilizing it to capitalize on unused roof space.

 

How LADWP’s FiT Program Works

LADWP’s FiT program allows building owners in its service area to receive a guaranteed, fixed revenue stream for up to 20 years by installing solar on their roof or parking lot and selling the power generated back to the grid at a guaranteed price per kilowatt-hour produced. To understand how FiT works in practice, it can be helpful to compare it to traditional net metering.

With net metering, a building’s solar array is developed with the building’s historical energy use in mind because the energy generated by the system is intended to offset the annual energy consumed by the building. On the other hand, systems designed under the feed-in tariff model are not intended to power the host building but are instead designed to send energy directly to the utility. 

This comparison highlights one of the most attractive elements of LADWP’s FiT program – building owners are not limited to developing solar systems that produce the same amount of energy that their building consumes. This allows building owners to maximize their available space – whether that is on a rooftop, a parking lot, or an open lot – and thereby maximize their profits. 

 

How LADWP’s FiT Program Benefits Businesses

One of the major benefits of LADWP’s FiT program is that you can start making money on day one, with no capital outlay. This is welcome news for business owners who have been interested in solar but have also been concerned about the upfront costs or figuring out financing. By partnering with a trusted solar developer like Pivot Energy that offers easy-to-understand leasing options, we will pay you to put solar on your unused roof space. Not only do we pay to build it, but we also pay to maintain it for the entirety of the 20-year lease.

Since the LADWP FiT program launched in 2013, it has proven to be a tremendous success for a number of LA-based businesses. A 1.2-megawatt (MW) FiT installation developed in 2016 for CRAFTED, a marketplace located at the Port of Los Angeles, is expected to gross $5.6 million over 20 years. A 134.4-kilowatt (KW) installation developed in 2013 on the Southern California Trophy Company building in downtown LA is expected to generate upwards of $670,000 in revenue over the 20-year contract.

By working with a qualified provider like Pivot Energy you too can turn your building into a host site for solar and unlock a new revenue stream for your business with $0 invested. Not only can you enjoy a new source of income from your under-utilized roof, but you can also take pride in the fact that you are supporting a more sustainable future with clean energy.

 

A FiT / NEM Hybrid Model

As we mentioned at the start of this article, FiT is one of several solar programs LADWP offers. Another popular option is Net Energy Metering (NEM). This is the model we touched on earlier in which a building’s solar array is designed to offset its electricity consumption with the energy it produces. Both FiT and NEM offer distinct advantages, and what’s great is that some businesses don’t have to decide between the two but can instead employ both.

An example of this hybrid model is the LA-based Forever 21 corporate headquarters. The 5.1-megawatt (MW) array uses net metering to zero out their own energy use and then sells the excess energy produced back to the grid at a fixed FiT rate. While utilizing both NEM and FiT is less common than using one or the other, the combination can maximize a business’s bottom line. By working with an experienced solar developer like Pivot Energy, you can find out if a FiT / NEM hybrid model makes sense for you.

 

Let Pivot Energy Help You Leverage LADWP’s FiT Program

If you are ready to turn your under-utilized rooftop, parking lot, or open space into a new revenue source with the LADWP FiT program, Pivot Energy is here to help. Our team of seasoned solar professionals will clearly lay out your options and show you how you can start earning long-term income and promote a more sustainable future by hosting a solar project.

Contact us today.

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