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Los Angeles Commercial Property Owners: Your Parking lot might be your most lucrative asset, if you act quickly!
By Johnathan Snyder, Director, Direct Origination
If you own a commercial property with a parking space, you may view your parking lot just as a space for parking cars. But in some states, and sometimes in certain utilities, owning a parking space (garage or ground parking) can be very lucrative. Since the Inflation Reduction Act (IRA) of 2022, the largest renewable energy incentive in the U.S. history, solar and other sustainable initiatives, such as vehicle electrification, have gained more attention due to its lucrative incentives. This holds especially true in Los Angeles, CA where an incentive offered by the largest publicly owned utility company in the country, Los Angeles Department of Water and Power (LADWP), is making solar canopies more lucrative than ever before if coupled with electric vehicle charging infrastructure.
History of the LADWP’s Feed-in-Tariff Program
With more demand, and need of renewable energy into the grid systems, utilities have started to incentivize commercial property owners to install more solar and sell it back to the grid. In 2013, in an effort to accelerate renewable energy development within Los Angeles to meet the state-mandated 50% Renewable Portfolio Standard (RPS) by the end of 2030, the LADWP launched the 150 megawatt (MW) Feed-in-Tariff (FiT) program.
This initial program allowed the construction of solar installations on commercial, industrial, multi-family, warehouse, government, and non-profit rooftops, carports, and unbuilt land within the City of Los Angeles. These property owners could then sell the electricity generated by their array back to the utility at a fixed price for up to 20 years.
What is a feed-in-tariff?
A feed-in tariff (FIT) is a policy designed to support the development of renewable energy sources by offering energy producers (such as building owners) rates above the market average for the energy they supply to the grid. FiTs typically involve long-term contracts (about 15-20 years) and a guaranteed price per kilowatt-hour produced for the term of the agreement.
The popularity of the program soared and was at the brink of reaching its max capacity when in 2019, the FiT, which was already the largest FiT program in the US and had generated over $500 million in new investment for the city, expanded by 300MW. This brought the program total to 450 MW and included several important updates, including an increase in the single project capacity limit from 3 MW to 10 MW.
In May 2023, the FiT was updated once again with the approval of a new carport and canopy incentive of $1.20/watt to $1.70/watt, depending on the system size and whether or not the project is located within a Disadvantaged Community. In order to receive the rebate, the carport or canopy must also include Electric Vehicle Service Equipment (EVSE) for a certain percentage of spaces covered. This requirement is an opportunity for commercial property owners to attract and appreciate customers and employees. As one of the fastest growing markets in California, there were approximately 1,111,028 electric vehicles (EV) on the road in 2022, with nearly one quarter of those (282,343 to be exact) located in Los Angeles County. As the EV market continues to boom, it’s no surprise that the LADWP is offering rebates to foster EV charging infrastructure throughout the city. It also means all of those EV owners are looking for places where they can run errands while charging their vehicles at the same time. Solar canopies also protect cars from the elements (like that beating Southern California sun) – something both customers and employees can appreciate. As an added bonus, solar canopies show customers – 81% of whom feel strongly that companies have a responsibility to help improve the environment – that you’re considering more than just your bottom line in a highly visible and impressionable way.
How it works
If you lease your parking lot or structure to a third-party developer like DSD, we will customize and construct a solar carport or canopy suited for your unique space. We cover the entire project costs, including maintenance and operations. We manage the project, receive the LADWP FiT credits, and provide you with a guaranteed fixed annual lease payment for up to 20 years.
How to Qualify for the Rebate
- The project must be located within the LADWP Service Territory Map (see below).
- The project must provide Electric Vehicle Supply Equipment (EVSE) for 10% of the available spaces, and the EVSE must be separately metered from the FiT project.
- If your property is located in a disadvantage community, additional incentives can be applied.
Like most renewable energy incentives in California, this opportunity won’t last forever and is first come first serve. As of publication time (October 2023), there were 58.2 MW still available for new projects.
Let DSD Renewables Help You Leverage Your Parking Infrastructure and Add Value to Your Balance Sheet and Customers and Employees.
If you are ready to start adding a new revenue source by leveraging solar on your parking spaces, and giving your customers and employees EV charging stations, while simultaneously supporting clean energy in Los Angeles, DSD is here to help. We offer lease agreements that are simple to understand, and maximize the value of your parking space, so you can benefit financially as soon as your system starts producing energy.
At DSD, we have an in-house dedicated canopy and EV charging infrastructure team of experts with experience and knowledge needed to design through any parking configuration, meet aesthetic challenges and work with your team to understand what is important for your organization. All while optimizing energy production, so you get the best value for the project, without disrupting the parking operations of the site.
If you’re a property owner in Los Angeles and are ready to start generating income from your parking lot, let me know and we can start your process to leverage this limited, but very lucrative incentive.
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