San Diego Feed-In Tariff

Helping San Diego get to 100% renewables by 2035

The Clean Coalition designed a Feed-In Tariff (FIT) with streamlined interconnection for San Diego.

A FIT leverages a standardized power purchase agreement (PPA) to bring clean local energy online far more quickly, reliably, and cheaply than any type of auction mechanism.

Download the San Diego Final Draft FIT Design Recommendations (PDF).

Download the San Diego FIT vs BAU economic analysis (Excel spreadsheet).

The importance of using a FIT

While California’s net energy metering (NEM) policy works well for residential solar, it is not well suited to commercial-scale solar for a number of reasons:

  • Commercial properties are often not occupied by their owners
  • Many of these properties have split meters
  • The electrical load of many commercial-scale sites, such as parking lots, is smaller than their generating capacity

A FIT removes all of these issues.

In addition, FITs are far more effective than auctions at bringing commercial-scale solar online. FITs are faster, cheaper, and more reliable because they are simpler for developers, property owners, utilities, and regulators. The standardized contracts and prices of FITs can be approved in a single decision — compared to the many rounds of proposals, evaluation, negotiation, and approvals that delay auctions — saving both time and money.

In sharp contrast, auction processes are expensive, slow, and risky, delayed by many rounds of proposals, evaluation, negotiation, and approvals. This raises costs for all parties, including ratepayers, and results in far fewer projects being built. Across California RPS solicitations, for example, fewer than 1 in 10 project bids were actually developed — which resulted in high administrative costs for the program and exorbitant risks and costs for renewable energy project development:

San Diego FIT details

The design for the San Diego FIT recommends the use of Market Responsive Pricing (MRP), which allows the price paid under the FIT for both solar and storage to adjust based on market response; this ensures that the load-serving entity pays the optimal price for clean local energy. Market Responsive Pricing is critical to successful procurement under the FIT, because it avoids these potential issues:

  • Prices set too high will ensure rapid development of local renewable energy capacity but will result in less clean energy produced for a given budget or cause unnecessary upward impact on electricity rates.
  • Prices set too low will not attract the market to develop the desired amount of local renewable energy capacity.
A FIT will simplify the process to build renewable energy projects and sell the power produced in the City of San Diego

The FIT also includes a Dispatchability Adder to make renewable energy available whenever needed instead of only when the sun is shining or wind is blowing.

The San Diego FIT design made these recommendations for project eligibility:

  • New resource: The generating resource should be new, meaning that it has not produced or delivered electric energy prior to the date in which the LSE receives its application.
  • Location: The project should be located entirely within the City of San Diego.
  • Technologies: All technologies that are compliant with California’s Renewables Portfolio Standard (RPS) requirements should be eligible to participate in the FIT.
  • Project sizing: The maximum recommended project size was set at 3 MW. This is slightly larger than the sizing in some FIT programs; however, the City of San Diego offers plenty of large project siting opportunities, and this larger size will enable lower pricing for clean local energy through increased economies of scale.

Download the San Diego Final Draft FIT Design Recommendations (PDF)

Learn more about Feed-In Tariffs

The only approach that has been proven to unleash wholesale distributed generation (WDG) in the United States.

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