Los Angeles Kicks Off Nation’s Largest Rooftop Solar FIT Program

Los Angeles, California has launched the largest rooftop solar Feed-in Tariff (FiT) program in the nation, under which the Los Angeles Department of Water and Power (LADWP) will purchase solar power from hundreds of building owners with rooftop solar installations.

LA Mayor Antonio Villaraigosa flips on Clean LA Solar FIT project

LA Mayor Antonio Villaraigosa flips on Clean LA Solar FIT project (photo – Mayor’s Office)

The LADWP FIT aims to generate 150 MW of renewable and clean solar energy – enough to power more than 43,000 homes and reduce Co2 emissions by 147 metric tons. This is the equivalent of taking 28,300 cars off the road.

This FIT program was initially proposed by the CLEAN LA Solar Coalition and the Los Angeles Business Council.

LADWP ran a 10 MW project FIT program last year as a pilot to determine market pricing and how the program needs to be structured.

LADWP got 26 applications, of which 14 were deemed to be eligible projects that the LADWP could sign a power purchase contract for.

The first FIT project completed under this demonstration program was the rooftop solar installation of Oxnard Plaza Apartments in North Hollywood.

Los Angeles Mayor Antonio Villaraigosa flipped a switch, and the building started sending to the LADWP what will amount to 142,000 kilowatt-hours of solar energy per year.

LADWP is now accepting applications for a second round of 20 MW allocation under the program starting July 8, 2013. A lottery process will select from among eligible project applications submitted in between July 8-12, 2013.

The first 20 MW round was put out earlier this year in February, and received 104 applications from within the City of Los Angeles. Of these, 60 have been selected and LADWP will sign contracts with them this summer.

LADWP General Manager Ronald O. Nichols said this was just the beginning of what they expect to be a long and beneficial public-private partnership. He said Angelenos can expect to see thousands of solar panels on rooftops throughout the city over the next few years.

Los Angeles has already started realizing the economic development benefits of this program. Solar Provider Group, which was responsible for the Oxnard Plaza installation, decided to set up their U.S. headquarters in Los Angeles. As the program develops, the company plans to create jobs for everything from solar installations to project management, finance and business development.

A University of California, Los Angeles study commissioned by the LA Business Council Institute estimated that the Clean LA Solar program would create 4,500 installation, construction, administration, design engineering and maintenance jobs in the first five years.

The UCLA study also said the program would be able to leverage $300 million in federal tax credits for businesses in Los Angeles and generate more than $500 million in private investments.

California Approves Economic Development Reforms Bill

On June 27, 2013, the California State Assembly approved an economic development reform bill (AB-93) which moves $750 million worth of business incentives from California’s Enterprise Zones to statewide incentive programs.

CA Enterprise Zone reform

CA Enterprise Zone reform (photo –

AB-93 was amended and approved by the California State Senate on a 30-9 vote a couple of days ago, so it went straight to the Governor’s desk for his signature after the amended version was passed by the Assembly on a 54-16 vote.

After the bill’s passage, CA Governor Edmund G. Brown Jr. issued a statement in which he said it was a big and bipartisan win for working people and businesses in California. He said AB 93 would create good manufacturing jobs and help grow the economy.

Kish Rajan, director of GO-Biz, the Governor’s Office of Business and Economic Development, said that the California economy had been coming back strong during the past year. He said the AB 93 vote adds to that momentum and would put their foot on the accelerator for economic development in California.

The bill had backing from labor groups, while others, such as the League of California Cities, opposed the bill, claiming it would decrease local tax revenues and place additional burdens on struggling communities.

AB 93 moves Enterprise Zone incentives to three new programs, as outlined below:-

The existing sales tax credit for Enterprise Zone businesses is now a statewide sales and use tax (SUT) exemption on manufacturing and bio-tech equipment purchase for manufacturing companies and those engaged in biotech R&D.

A Hiring Credit of 35 percent of wages that fall in between 1.5-3.5 times the minimum wage will be available for five years in specific geographic areas to companies hiring long-time unemployed workers, veterans, ex-offenders and those receiving federal earned income tax credit.

The California Competes Credit, to be administered by GO-Biz, will help the Golden State attract new business activity and retain existing ones by offering tax credits as an incentive based on the number and quality of jobs created.

Read more about the reforms approved under AB 93 in this updated briefing put out by Go-Biz. 

Pennymac Adds 200 Mortgage Jobs in Sacramento

PennyMac Mortgage Investment Trust (NYSE: PMT) is adding 200 jobs at a new office space it has leased in a business park in Sacramento County, California.

PennyMac Mortgage Investment Trust

Photo –

The announcement was made by the Sacramento Area Commerce and Trade Organization (SACTO), which says the company has leased 26,384 square feet at PS Business Park.

The Moorpark, CA-based company has already hired 40 employees and plans to increase the workforce at this facility to 200 jobs.

PennyMac deals mostly with residential mortgage loans and mortgage related assets. They try to raise the value of distressed mortgage loans by acquiring them through loan modification programs. With the value of real estate on its way up, many home owners are now more interested in saving their homes through programs such as the U.S. HUD’s HAMP and HARP programs.

The PennyMac expansion will add mortgage professionals to help the company originate and process loans from all over the country associated with HARP (Home Affordable Refinance Program), which helps homeowners whose mortgages are underwater.

Sacramento was chosen because it will help the Southern California-based company expand into Northern California, while at the same time being able to tap into the skilled workforce and training resources in the region.

PennyMac Managing Director Patrick Benton said they see tremendous opportunity in the Sacramento market, and added that they were looking forward to a long and successful tenure.

As far as Sacramento is concerned, the regional economic impact of the project is estimated to exceed $133 million. Since the company already has an office in Natomas under an Enterprise Zone, PennyMac is eligible for state income tax credits that are provided for creating new jobs.

SACTO named Sacramento County and the California Governor’s Office of Business and Economic Development (GO-Biz) for their help in securing the project, in addition to the California Employment Training Panel and the Sacramento Employment and Training Agency.

SACTO Board of Directors Chairman David Parkes said they were pleased to welcome PennyMac, and added that the company’s decision to select Sacramento was another sign of the long-anticipated housing market recovery and the overall economic health of the region.

Volvo Announces DME-Powered Heavy-Duty Truck Production Project

Executives from Volvo Trucks, Oberon Fuels and grocery store chain Safeway Inc. came together at the steps of the State Capitol in Sacramento, California to talk about an alternative fuel powered heavy-duty truck the three companies have managed to commercialize.

DME-powered Volvo Trucks event

DME-powered Volvo Trucks event (photo –

The blue truck in the backdrop represents the latest addition to Volvo’s “Blue Power” alternative fuel strategy.

This is the first heavy-duty commercial vehicle model powered by dimethyl ether (DME) that will be actually produced for sale in North America.

DME has all the positive performance qualities associated with diesel, and has the additional advantage of being a clean fuel that produces no soot when it burns.

The elimination of the diesel particulate filter (DPF) further reduces the weight and complexity of DME tanks, which are already lighter than LNG and CNG tanks.

The kicker is that DME can be made from both biogas and natural gas, so there’s no shortage of natural resources required to produce the fuel at scale. When produced from biogas, use of DME in vehicles reduces CO2 emissions by 95 percent as compared to diesel.

Oberon Fuels CEO Neil Senturia said their production process enables previously wasted resources (food, agricultural and animal waste) to be converted into clean-burning DME.

Volvo plans to start limited production of these vehicles in 2015, adapting the Volvo D13 engine to run on DME. Volvo will make the trucks, Oberon Fuels will supply the DME, and Safeway will be the first customer using two of these trucks for their commercial operations in the San Joaquin Valley region.

The project has already secured $500,000 in funding from the San Joaquin Valley Air Pollution Control District (SJVAPCD).

Seyed Sadredin, executive director of the SJVAPCD, said they chose to fund this project because air quality was a major challenge in the San Joaquin Valley, and new technologies such as DME-powered commercial vehicles are badly needed.

Kish Rajan, director of the California Governor’s Office of Business and Economic Development, was also present at the event and said that GO-Biz looks forward to helping Volvo and Oberon in maximizing the benefits of DME used as a commercial transportation fuel.

Tom Nartker, vice president of transportation at Safeway, said they decided to participate in the project because the company already has Volvo trucks in its fleet and the DME technology would be a natural fit for their sustainability strategy.

Göran Nyberg, president of Volvo Trucks North American Sales and Marketing, said it was clear that DME technology had great potential for North America, and would allow the company to further its commitment towards both the environment and its customers.

Gothenburg, Sweden-based Volvo Group has 115,000 employees with production facilities in 19 countries. Last year, the company generated sales worth $45 billion in 190 markets. Volvo trucks sold in the U.S. are currently made at the 300-acre Volvo manufacturing plant in Dublin, Virginia.

Citi-EIU Report – Benchmarking the Future Competitiveness of Cities

A report from the Economist Intelligence Unit (EIU) that was commissioned by Citi says that New York City remains the most competitive city in the world, and will continue to retain the title until at least 2025.

Hot spots 2025 infographic (click to expand)

Hot spots 2025 (infographic – Citigroup/

The report, titled “Hot Spots 2025: Benchmarking the Future Competitiveness of Cities,” ranks the competitiveness of 120 major cities around the world based on the ability to attract business, talent, capital and tourists.

Here’s the top ten list of the most competitive cities in 2025, in the order of their ranking – New York, London, Singapore, Hong Kong, Tokyo, Sydney, Paris, Stockholm, Chicago and Toronto.

Apart from New York and Chicago, the United States has four other cities in the top 20 list. Washington, D.C. secured 14th place, while California secured two spots for Los Angeles and San Francisco in the 17th and 18th places respectively. Boston is ranked 19th on the list.

Citi CEO Michael Corbat said that cities around the world are evolving as centers of innovation and economic growth engines. He said the EIU research Citi commissioned enhances an understanding of the factors that drive urban competitiveness and sheds light on how the top performers create their competitive advantage.

The report says New York’s top ranking is because of its financial maturity, institutional character and economic strength.

NYC Mayor Michael R. Bloomberg said that EIU’s recognition of the City’s place at the global economy’s forefront was a testament to the ingenuity of hard-working New Yorkers and efforts the administration has made to diversify New York’s economy.

The report also says a city’s size doesn’t have that much impact on how competitive it is. Environmental governance and sustainable policies do make an impact, with Tokyo scoring high for its ability to deal with natural disasters.

Among U.S. cities, Chicago, Illinois gets the highest score for environmental governance. Chicago Mayor Rahm Emanuel said that decisions made as a city over the next few years will help determine Chicago’s future for decades to come, and added that he was extremely optimistic about the City’s future.

As per the report, some of the biggest factors that impact competitiveness are the quality of the institutions and maritime access.

Nine of the top 10 fastest rising cities on the list are either seaports or have easy maritime access. The reverse also holds true, since most of the cities that are rapidly losing competitiveness are either landlocked or have allowed their seaports to become less accessible.

Read the full Hot Spots 2025 report – Download (pdf)

Go-Biz Explains California’s Proposed Revision of ED Incentives

Go-Biz, the California Governor’s Office of Business and Economic Development, has issued a briefing explaining the components of the state’s proposed revision of economic development incentives.

Go-Biz deputy director explains proposed California incentives

Go-Biz deputy director explains proposed California incentives

The proposal called “NEW TOOLS FOR A NEW ECONOMY” was a part of the May Budget, and redirects around $750 million from the Enterprise Zone program to statewide incentives.

It includes proposals such as a manufacturing equipment sales tax exemption, a hiring credit, and investment incentives called the California Competes Incentive Credit which gives Go-Biz more flexibility for negotiations.

Leslie McBride, deputy director for Business Investment Services for GO-Biz, pointed out that two of the three proposed incentives will be available statewide, which she said makes all of California an Enterprise Zone.

The existing sales tax credit offered by California is limited to basic manufacturing equipment for companies in an Enterprise Zone, and excludes R&D spending. The new sales tax exemption will be available to companies located anywhere in the state and includes R&D equipment purchases by manufacturing and biotech industries.

Starting Jan 2014, qualified companies will be exempted from state sales tax for their first $200 million worth of equipment purchases. California estimates that it will need to provide exemptions worth around $400 million annually under the new system.

Under the existing system, companies can only claim the sales tax exemption in their annual income tax return. Under the proposed system, they are not required to pay the tax when they purchase equipment.

The second proposed incentive is a Hiring Credit, available to businesses located in areas with the 25 percent highest share of poverty and unemployment in the state. This five year credit offers 35 percent of annual wages (five year total of 175 percent) between 1.5 to 3.5 times the minimum wage, and is available for hiring unemployed workers and veterans, and people who are eligible for the federal earned income tax credit.

The Hiring Credit is not available for replacing existing employees, and is only valid for new jobs created. Small businesses must get at least 25 percent of the allotted credits. The state expects to have to provide at least $100 million per year in hiring credits.

The third proposed incentive is the California Competes Credit, to be administered by Go-Biz and approved by an impartial committee in order to secure economic development projects involving job creation and new capital investments.

The California Competes Credit will be available for statewide projects, with 25 percent going to small businesses. The state expects to provide between $100 million to $200 million of these credits per year.

Read the full Go-Biz briefing on California’s proposed new business incentives – Download (pdf)

2013 Gold and Silver Shovel Awards for Economic Development

Area Development magazine announced the winners of its 2013 Gold and Silver Shovel Awards. Four states – Alabama, Georgia, Kansas and Texas, won Gold Shovels for economic development projects they undertook in 2012.

AD Gold and Silver Shovel Awards

Photo – Area Development Online

The $304 million Apple, Inc. project in Austin, Texas which created 3,635 jobs was named as the best project of the year.

AD magazine cited Alabama’s success in luring companies making planes, ships and cars. They mention the 2,000 jobs created by the Airbus and Austal USA projects in Mobile, along with another 900 Hyundai jobs.

Alabama Governor Robert Bentley said it was rewarding to see their work in making Alabama the best place for doing business recognized by Area Development.

AD magazine annually asks all 50 states to submit their top 10 projects in terms of job creation and investment. Only projects which began to materialize in the past year are considered.

The Shovel Award winners are those states which get the highest weighted scores based on factors including industry diversity, jobs added per capita, investment amounts and new facilities added.

Geraldine Gambale, editor of Area Development, said that the states receiving Shovel Awards this year deserved the special recognition for their efforts in attracting new businesses and helping existing corporate citizens expand.

The Silver Shovel winners are divided into four categories based on their size. Among states with a population of 10 million or more, the three winners were California, Florida and Pennsylvania.

Florida Governor Rick Scott said the award highlights the work they have done in making Florida’s business climate the best in the nation.

Florida Secretary of Commerce Gray Swoope, who serves as president and CEO of Enterprise Florida, added that the award speaks to the EFI business development team’s dedication and their relentless pursuit of competitive projects.

Kish Rajan, director of GO-Biz – the California Governor’s Office of Business and Economic Development, said that the award demonstrated California’s on-going ability to create quality jobs in a wide array of industries.

The $300 million Samsung Semiconductor expansion in San Jose, CA which created 2,000 jobs was recognized by AD magazine as the second best project last year. Other cited projects in the Golden State include Amazon, Caterpillar and Sutter health.

GO-Biz Deputy Director for Business Investment Services Leslie McBride said that these projects were prime examples of public-private partnerships between GO-Biz, its regional partners and the private sector to bring new jobs to California.

See the full list of 2013 Area Development Gold and Silver Shovel Award winners.

San Francisco Transit Delays Cause Economic Loss of $50M

The Municipal Transportation Agency of San Francisco, California released a report about the performance and needs of the city’s transit system.

San Francisco cable cars

San Francisco cable cars (photo – Jon Sullivan/wikimedia)

The report shows that peak-hour Muni delays caused economic losses of $4.2 million for the month of April 2013, which the SFMTA rounds out as $50 million in annual lost economic impact for the city.

Highlights from the report:-

- Customers experienced 151,263 hours of delay last month due to maintenance, and another 20,932 hours due to operational reasons;

- Delays added commute time of 1.5 percent for San Franciscans; and

- Caused annual economic loss of $50 million due to lower competitiveness and higher costs. This does not include the impact of off-peak delays or reduced shopping access.

SFMTA says it faces a $320 million annual structural budget deficit, including $70 million for unfunded operating needs, of which $50 million is for transit alone.

The agency has $12.35 billion worth of assets, out of which $6.69 billion are assets that directly impact transit services. They say they need another $260 million per year to keep these assets in a “state of good repair.” However, a total of $680 million required for such repairs has been deferred, as of 2010.

The report says that with a $50 million recurring annual investment, the SFMTA could:-

Replace 10 trains per year; or

Increase service by eight percent; or

Rehabilitate 170 buses per year; or

Replace 64 buses per year.

The resulting economic benefits from the improved service and reduced delays would more than make up for the infrastructure investment costs.

The report suggests initiatives that will improve performance, including all-door boarding, adding transit-only lanes, setup of a line management center, and more frequent demand-based adjustments of schedules.

They also suggest performance could be improved through communications and customer outreach, including real-time contact with customers through Twitter and NextBus, and a new website and audio system.

Muni is one of the oldest transit systems in California and carries more than 200 million customers each year, and operates everything from cable cars to light rail, diesel buses, electric buses and trolley coaches.

No Time To Whine for Wineries in Economic Downturn

It is common knowledge that in an economic downturn, alcohol and cigarettes are perceived to be virtually recession proof. And as wine making in America has significantly increased from 440 local wineries and vineyards in 1970 to a current 7,000 across the nation, one would expect that the business of wine making and selling is indeed resistant to the outcomes of a recession or drop in the United States economy. However, while the business of a vineyard may seem impervious and ever-growing, let’s take a hard look at what a recession would mean for the American wine industry.

Positive Facts

The American wine industry is the fourth largest producer of wine in the world and 34% of US citizen alcohol expenditures are defined as wine sales. Every state in the nation has at least one winery producing quality American wines but the Southern California Wine Country with regions of Napa and Temecula share over 90% of the U.S wine producing markets. With California’s widely known financial situation, housing over 90% of the vineyard market would imply that local wineries are indeed recession proof, but while these positive facts may be inspiring for local winery owners but they do not mean that the industry as a whole is unfazed by America’s most recent economic struggles.

A Change in Purchasing Habits

When we have economic struggles, we often see a change in purchasing habits. Retail stores see fewer customers during conventionally busy seasons and American residents cut back on the items they feel they don’t need to survive.
California resident and wine expert, Dr. James Lapsley of the University of California said it best in an interview where he discussed the changes in purchasing habits of wine drinkers, “What happened during 2008 to 2011 was that people who were fairly rich and who had seen their portfolios decline suddenly tightened their belts and said, ‘I’m no longer buying $60 Cabernets, I’m buying $30 Cabernets.’ And people who were buying $15 wines said, ‘I’m now buying $7 wines.  If you were a winery producing inexpensive wine – which meant you were a very large winery because this is where you really need to have economies of scale both in production and distribution – you did really well.”

Large vs Small Wineries

The wineries in Temecula, CA are considered larger wineries not unlike those mentioned by Lapsley in his interview. However, the recession and a possible downturn today would not bode well for small wineries who may have been counting on selling their bottles at $60 to stay in business. This can mean distressed sales in locally produced wine but with a simple adjustment to pricing, our small local vineyards can last through a downturn to see the light at the end of the tunnel when the economy begins to move back into the black.

Affect on Local Wineries

While the business of a vineyard may seem impervious and ever-growing, it is obvious that just like millions of other small businesses across the nation; small local vineyards may have difficulty remaining in business. However with an adjustment to pricing and production, we can expect to see the business of a local winery make it though a down economy or recession.

Guest Author Bio

Stacey Waldron is the Internet Marketing Director for Bel Vino Winery located in Temecula California. She enjoys gardening and playing with her two dogs, Banjo and Karly on hot summer days and always makes time for a good bottle of red wine shared amongst friends.

UC Berkeley Report – California Green Jobs and Workforce Impact of Proposition 39

The Donald Vial Center on Employment in the Green Economy at the University of California, Berkeley has released a report which provides a detailed analysis of the jobs and workforce impact of Proposition 39, which California voters approved in Nov 2012.

UC Berkeley report on Proposition 39 green jobs

Proposition 39 green jobs report (photo –

Proposition 39, aka the California Clean Energy Jobs Act, allows the state to impose income tax on multistate corporations based on a percentage of their sales in California.

It increases the state’s revenue by a billion dollars annually, and half of the new revenue collected over the next five years will be allocated for energy efficiency projects in California’s public schools, community colleges and universities.

The stated aim for the use of funds is that it should create good-paying clean energy and energy efficiency green jobs in the state. As such, some of the funds will be used for workforce training and helping youth and veterans gain employment doing these jobs.

Based on the assumption that $550 million will be provided by California in grants for energy efficiency retrofits, it will result in the creation of 3,410 direct person-year jobs and 7,843 total person-year jobs annually.

A person-year job is a full-time job for one year. Out of the total number of direct jobs, around 2,273 will be skilled construction jobs.

If a revolving loan fund is created to pool $50 million of the Proposition 39 funding each year for the next five years, it could be leveraged into a total of $700 million in investments, leading to the creation of 4,340 direct jobs. If a $100 million revolving loan fund is set up, it would result in an investment of $850 million and would create 5,270 direct jobs.

The idea for creating a revolving loan fund using a part of Proposition 39 funds was explored in a study released last month by the UCLA Luskin Center for Innovation and commissioned by the Los Angeles Business Council Institute (LABC).

LABC President Mary Leslie said that Proposition 39 had opened up an opportunity to fulfill two of the state’s priorities at the same time – increasing commitment to environmental sustainability while adding thousands of green jobs.

Leslie added that the revolving loan fund would support innovative projects in public-private partnerships and maximize the benefits of Proposition 39 funds for the environment and the economy, and for California workers.

Read the full UCLA and the UC Berkeley reports on Proposition 39.

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