The City Council approved a new program last week that will allow small businesses with solar panels to sell electricity directly to the city. The program, known by the vague and obscure name of "feed-in tariff," will enable businesses to sign 20-year contracts with the city to provide electricity at a fixed rate, according to Jon Abendschein, a resource planner in the Utilities Department.
The program creates a new avenue for the city in its quest to draw a third of its electricity from renewable sources by 2015. So far, the city has been tackling the challenge by issuing requests for proposal to established energy companies, soliciting bids, negotiating a price and signing long-term agreements. The new program takes a more grass-roots approach to going green. Just about any business with solar panels will be able to sign up and become the city's newest electricity vendor, according to a report from Abendschein.
"A FIT (feed-in tariff) program will reduce costs and provide local renewable project developers certainty because of the fixed long-term rate, the standard contract, and the fact that it is open to any developer rather than only those who are selected through an RFP (requests for proposal) process," he wrote.
At its Aug. 1 meeting, council members unanimously and enthusiastically approved the new program, characterizing it as a good way to promote both local electricity generation and green energy. Eligible technologies will include solar, wind and biogas-fueled generators, Abendschein wrote in the report.
Solar, however, remains the most promising option. The city had 420 residential customers and 27 non-residential customers with photovoltaic systems as of late June, according to Lindsay Joye, a marketing engineer in the Utilities Department. The new program would only apply to the commercial customers.
Abendschein told the council Monday that the new program will focus on "commercial rooftops."
"Owner of a building, or in partnership with a third party, could put solar panels on rooftops and receive a 20-year contract at a fixed rate to sell that power back to the city and participate in fulfilling our renewable portfolio standard," Abendschein told the council.
The council's Finance Committee and the city's Utilities Advisory Commission had vetted the proposed program earlier this year and endorsed the staff proposal. Last week, the full council happily gave the program its official approval.
Councilman Larry Klein said he was "very enthusiastic" about the program and proposed expanding it even after the city meets its renewable-energy goal. Councilwoman Nancy Shepherd said the program "keeps the progression of alternative energies in place" in Palo Alto, while Vice Mayor Yiaway Yeh praised it for potentially improving the reliability of the city's electricity network.
The city is currently projected to draw about 30.8 percent of its annual electric energy needs from renewable sources by 2015. Officials hope the new program will push that number to 33 percent.
Feed-in tariff programs are already in effect in dozens of nations worldwide and are particularly common in Europe. Councilman Pat Burt said Monday that more than half of the installed solar power in the world has been achieved through such programs. He called the new program a "win-win situation for a lot of different elements."
"This puts us in position of providing another opportunity for community entities who are choosing to do this to do something that's in their value structure and is of benefit to the city," Burt said.
The council did, however, find one flaw in the staff proposal — its name. Though nations have traditionally referred to such energy-purchasing programs as "feed-in tariffs," Klein called this "one of the world's worst names."
"'Feed-in tariff' doesn't in any way describe what's going on to the average person," Klein said.
Staff agreed to consider a more "accessible" name for the program as it unfolds in the coming months.