Berkeley and Palm Desert may be poles apart when it comes to politics. But the two cities are pioneering a new path to solar energy.
Pushed by these unlikely municipal bedfellows, California on Monday enacted a law that allows cities and counties to make low-interest loans to homeowners and businesses to install solar panels, high-efficiency air conditioners and other energy-saving improvements.
Participants can pay back the loans over decades through property taxes. And if a property owner sells his home or business, the loan balance is transferred to the next owner, along with the improvements.
The innovative financing scheme, if widely adopted by local governments, could give a hefty jolt to the installation of solar panels to generate electricity. Solar systems can cost $15,000 to $30,000 -- more than many homeowners can afford to pay upfront, although state rebates cover part of the cost.
The financing strategy was originally hatched in the office of Berkeley Mayor Tom Bates as part of the city’s plan to reduce its carbon footprint. It attracted inquiries from across the country after it was described at a national global warming summit for mayors in Seattle last year.
Berkeley’s City Council last fall proposed incorporating the financing plan into its ongoing climate initiative and is now working on a pilot project. Meanwhile, Palm Desert, a city with an aging population and high air-conditioning costs, jumped on the bandwagon, vowing to reduce its energy consumption by 30% and to become the first city to fully implement a solar loan program.
But the two cities found they had no statutory authority for the strategy and approached Assemblyman Lloyd Levine (D-Van Nuys), who sponsored AB 811, the new law. “Homeowners and businesses can have solar energy, install dual-pane windows and insulation, and they’ll save more on energy bills than they’ll pay on the interest on their loans,” Levine said.
California requires investor-owned utilities to get 20% of their electricity from renewable sources by 2010 and 33% by 2020. Public utilities are also setting green goals: L.A.'s Department of Water and Power has pledged to achieve 20% renewable energy by 2017.
A massive investment in renewable sources will be needed if California is to meet its goal of reducing greenhouse gas emissions by 30% over projected levels, as required by the state’s 1996 Global Warming Solutions Act.
Utilities are seeking to build huge solar electric plants and wind farms to meet those goals. But the plants, many of which would be in fragile deserts and require high-voltage transmission lines, are attracting opposition. Subsidizing individual solar systems may be more palatable, politically and environmentally.
So far, however, private utilities are resisting reforms that consumer groups advocate, such as allowing ratepayers to oversize their rooftop solar systems and sell the extra power back to utilities at favorable rates.