Los Angeles Business Journal

DWP Establishes Solar Power Buy-Back Program for Building Owners

By Howard Fine Wednesday, April 4, 2012

In a boost to the local solar power industry, commercial property owners in Los Angeles will soon be able to sell solar power generated from their buildings back to the Los Angeles Department of Water & Power.

The program, approved by the City Council on Tuesday, could launch in an initial test phase later this year. It will allow owners of commercial properties and apartment buildings that install solar panels to sell the excess solar power onto the DWP grid. The precise sale rates would be worked out on a case-by-case basis through contract negotiations between the building owners and the DWP.

This resale program is expected to make solar power more attractive for commercial property owners and for solar panel installers.

Under the long-term lease option currently gaining popularity for financing solar panel installations, the solar panel installer fronts the cost for placing the panels on building roofs. The property owner then pays back that cost over the course of the lease, typically 10 to 20 years.

This resale program provides an additional revenue stream for property owners to help pay back the solar power installers.

“This is a smart, cost-effective method for businesses to create economic opportunity while weaning ourselves off the coal-fired plants that generate most of the city’s power,” said Brad Cox, senior managing director of Trammell Crow Co., a commercial property developer and management company.