San Jose Gets Creative to Help Homeowners Pay for Solar
by Amy Westervelt - Jun 24th, 2009
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By this time next year, thousands of San Jose rooftops could be covered with solar panels — with the homeowners paying little upfront cash thanks to some creative solar financing.
City officials announced at a City Council meeting yesterday that they were drawing up plans for San Jose to become one of the first major cities to take advantage of the new CaliforniaFIRST statewide assessment district.
The district will sell energy bonds to fund loans to residential and commercial property owners, not only for solar installations but also for energy efficiency improvements such as new insulation or replacing water-hungry fixtures with low-flow models (because water equals energy, but you know that already).
It's an example of one of today’s more successful solar financing strategies — property tax financing, which allows property owners to pay for their solar panels over 20 years via a line-item addition on their property tax bills. If the owner sells the house, the solar tax assessment shifts to the new owner, eliminating two stumbling blocks at once: the upfront cost of a $10,000-plus solar installation and concerns about the investment paying off.
We spoke with Nanci Klein, manager of corporate outreach for the City of San Jose’s economic development office, who was excited about the city’s proposed involvement with CaliforniaFIRST.
“We’re hoping for a few thousand people to participate in the first round, and it will keep going as long as people are interested," Klein says.
The statewide assessment district was developed by California Statewide Communities Development Authority (CSCDA) and allows cities and counties that express official interest in the program to access statewide bond financing. CSCDA sells bonds on behalf of the CaliforniaFIRST participants, thus lifting the financial responsibility off of individual cities and allowing them to tap into the economies of scale provided by a statewide taxable bond sale.
This type of financing is beginning to take off across California. Berkeley became the first to attempt it earlier this year, and its Berkeley First pilot program, which financed 35 solar roof installations, has become the blueprint for followers. The application process for that program is now closed, however, and the city is evaluating whether to continue it.
Though largely credited with starting the property tax financing trend, Berkeley did so before AB 811 passed and thus had to take responsibility for funding the program itself. Now that there are other options available, the city may well opt to join either CaliforniaFIRST or a regional assessment district that the Association of Bay Area Governments (ABAG) is putting together.
In the meantime, larger cities are talking about following in Berkeley's footsteps.
San Diego is set to launch a similar program next month, and San Jose hopes to launch its program by the end of the year. San Francisco also plans launch a version this year; it currently offers GoSolar incentives of $4,000 to residential property owners and $10,000 to commercial property owners for solar installations.
Why California?
While some municipalities outside California have tried municipal solar financing — Boulder, Colo., offered a first round of financing in April, for one — the majority of the progress has been in the Golden State, thanks to its passage last year of AB 811. The bill allowed for the creation of loan assessment districts that are authorized to sell bonds in order to secure loans for renewable energy installations and energy efficiency upgrades.
With both statewide assessment districts like CaliforniaFIRST and more localized assessment districts that operate either in single cities or in larger counties or regions (the Association of Bay Area Governments plans to have a district comprised of the nine Bay Area counties it represents by later this year), California residents will eventually be able to take their pick of programs.
If there are differences between them, residents are free to go with whichever loan suits them best.
“You’ll see a whole cottage industry I think for solar financing and energy efficiency financing, and it will bring with it jobs,” Klein says. “We’re focusing training dollars that have come to us through regular and stimulus money towards getting people ready for solar and energy efficiency-related jobs.”
Though California was the first state to authorize such districts, Louisiana is following closely with the proposal of Senate Bill 224. The state’s Senate unanimously passed the bill on June 10, and it is awaiting a vote from the House. If it passes, it will go into effect by August.
See also:
Start-Ups Rise to Push Solar on College Campuses
2 Utilities to Rent Rooftops as Mini Solar Power Plants
LA Community College System Heads for Energy Independence
Amy Westervelt is the managing editor of Earth Island Journal and writes about clean tech and environmental policy for a variety of print and web publications including Earth2Tech, Consumers Digest, and Sustainable Industries. She recently co-authored a report on sustainable cities for the Living Cities Foundation.
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Democracy in Action
Government organized and sanctioned, for the peons benefit! Socialist and communal in nature! Just what the doctor ordered for a beaten exhausted, over-exploited broken society! A chance for the peons to congregate under communal protection against the unregulated, pariah, vulture capitalists and the "American" dream" corporate propagandist's push for more sales, and get back something, communally as mankind and the democratic constitutionalist will recognize as the true American Way! Finally an" Avenue of Good," accommodation for a beleaguered American citizen, now ready to collapse under the social pressures on his family unit, and crying out for a break! Electric cars, less "extremely exploitive" commuting expenses, and better food home grown with good proven GMO's from Monsanto and the like, available at Wall marts for a fair price! Death to the McMansion! We need "Earth Arks" and reasonably priced and sized survival shelters built with the now suppressed super insulations that make home heating and cooling dramatically cheaper, revealed by a government able to by-pass patent laws, and the shysters, for the common good! Goddamn! America get up on your hind legs, wipe the smoodge off your cheeks a petition your power that be for the same! You are still free to form groups and sign petitions and make things happen! Exercise this right, or you will lose it! Go to your computer right now! email folks! see what happens! find common ground! Seek out larger groups, try at churches and social clubs! use the net for more than porn! change the whole goddammit country, one petition at a time, a district here and there, and then get bigger as you go along! Don't be shy! Speak your mind! Be polite, don't spread hatred, just stick to the facts and organize!
Leading by example
This is a great idea. San Jose receives plenty of sunshine year round. It gets pretty hot there in the summertime too. Hopefully if this works, other cities will follow suit.
Efficiency First!
What gets downplayed here is how important it is to do Efficiency First. Everybody talks about solar - even this story leads with solar - but efficiency is even more important. To reduce a ton of carbon would cost you $30 with solar, but with efficiency you'd actually save $40 by reducing that ton. Concentrating on building efficiency is 12x as effective at reducing carbon as putting up solar.
Increasing home performance is the most cost-effective way to save homeowners money right from the start and create lots of local green jobs, while reducing energy consumption and climate pollution.
But retrofitting 10 million homes a year is a big job. Organizations like Efficiency First, New Leaf America, ACEEE and others are beginning this important work. The time to get started is now!
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