Harnessing the sun, with help from the cities
By New York Times
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Mr. McNicol says he will use the savings for his racing hobby.
Bronzed and deeply lined from decades of life in the desert sun, Mr. Clark is not one to worry about global warming. He suspects that if the planet’s climate is getting hotter, it is part of a natural cycle and will probably correct itself. “Experts have been wrong before,” he said.
But late last year, Mr. Clark decided to install a $62,000 solar power system because of a new municipal financing program that lent him the money and allows him to pay it back with interest over 20 years as part of his property taxes. In so doing, he joined the vanguard of a social experiment that is blossoming in California and a dozen other states.
The goal behind municipal financing is to eliminate perhaps the largest disincentive to installing solar power systems: the enormous initial cost. Although private financing is available through solar companies, homeowners often balk because they worry that they will not stay in the house long enough to have the investment — which runs about $48,000 for an average home and tens of thousands of dollars more for a larger home in a hot climate — pay off.
But cities like Palm Desert lobbied to change state laws so that solar power systems could be financed like gas lines or water lines, covered by a loan from the city and secured by property taxes. The advantage of this system over private borrowing is that any local homeowners are eligible (not just those with good credit), and the obligation to pay the loan attaches to the house and would pass to any future buyers.
The idea of public financing for home solar systems began two years ago in Berkeley. While it took months to untangle the legislative knots at the state level and get banks lined up to back the project, the concept took on a life of it own.
Cisco DeVries, who developed the program for Berkeley but has since moved on to a company that administers and finances similar programs for many towns, said: “I’ve never been part of something like this where the power of an idea has grabbed so many people so quickly. It is viral.”
In California, about a half-dozen cities including San Francisco and San Diego are already committed to their own solar programs. And outside of California, at least a half-dozen states, including Arizona, Texas and Virginia, have introduced bills to allow municipal financing. Colorado has already passed a version of the law, and the City of Boulder is on the verge of beginning a program.
Municipal financing comes on top of other government supports. California residents receive a straight rebate for about 20 percent of the cost of a solar power system. In addition, a federal income tax credit for 30 percent of the cost of installing solar panels was extended to participants in the municipal loan programs as part of the economic stimulus bill passed by Congress. And there are efforts to change the federal tax code further so that cities can borrow the money to lend tax free.
But public financing of solar power also has critics, who say government is essentially subsidizing and encouraging a form of energy production that would otherwise not be cost effective. Severin Borenstein, director of the University of California Energy Institute in Berkeley, who is concerned about the proliferation of the programs, said, “It would be better for local governments to do energy efficiency and skip the solar panels.
“If you count the full-interest cost without the tax subsidy, residential solar panels never pay for themselves,” he said. “We shouldn’t be making it a major public priority.”
However, cities, which are charging 7 percent for the guaranteed loans, do not have the same financial risk as the consumers. And for cities like those in California that are required by state laws to reduce their carbon emissions, officials have to make calculations other than costs and are going ahead anyway.
No city is as far along as Palm Desert.
Instead of waiting to get financing through third parties as other cities have done, Palm Desert tapped into $7.5 million of its own reserves to run a pilot program. In what is widely seen as a measure of public demand, the program was almost immediately fully subscribed. Already, nearly 100 households have been approved for solar panels, and about half of those have already installed them and have a system up and running, according to Patrick Conlon, director of the city office of energy management.
From its arid climate to its conservative politics, Palm Desert could not be more different from Berkeley. But with 350 days of sun, the city is making a calculation that has nothing to do with saving the Earth.
“We live in a severe climate,” Mr. Conlon said. “To cool our buildings, we have to be energy gluttons. So renewable energy is important here as an economic choice. It’s bigger than politics.”
For Mr. Clark, that is certainly the case. His monthly energy bill for a 3,400-square-foot home and a guest house routinely surpassed $1,400 in summer months when the air conditioning ran all the time. Now his solar panels are producing more than enough energy in the daytime to power his home. The additional power is sent back to the grid and is credited on his utility bill against night and summer hours, when he might consume more power than he produces.
Mr. Clark estimates that at the rate he is going, his power bill will be at most $500 for this year. The savings will be great enough that, taking into account his investment, he will still save $3,000 a year or more.
The blue panels above his garage and his meter — which also tells him how much of the heat-trapping gas carbon dioxide he has avoided creating since the panels were installed (over 2,200 pounds) — have in fact had a kind of viral marketing effect in his upper-middle-class neighborhood. Homes here run well above $1 million, yet solar power was a rarity until the city program started.
“It can seem like a large and intimidating task,” said Valerie Van Winkle, a bank manager and a friend of Mr. Clark, who persuaded him and three other neighbors to take the solar plunge.
Ms. Van Winkle said the environmental cachet has also been fun. “I don’t even know anybody who voted for Obama,” she said.
Still she has become a proselytizer for solar power. “It just makes so much sense,” she said. “And, you know, I am happy it’s also good for the environment.”
Down the street, Debbie and Chris McNicol have a different take. Mr. McNicol used to be part of a professional drag racing crew and still races as a hobby on weekends. Their garage houses its own set of speed mobiles, including a 24-foot-long purple-and-yellow gas-guzzling dragster that goes up to 180 miles an hour. After installing solar panels, their first monthly energy bill dropped to $1.89.
Mr. McNicol is elated: “We can use the money we’ve saved to race new toys.”
