City may help with solar setup financing

[OKIsItJustMe]

http://www.contracostatimes.com/news/ci_7599335?nclick_check=1

City may help with solar setup financing

RICHMOND: Under proposed program, homeowners would pay back loans as an add-on to property taxes

By Katherine Tam

STAFF WRITER
Article Launched: 11/30/2007 03:07:02 AM PST

At $20,000 or more, solar panels are simply beyond the price range of many. But Richmond is trying to alleviate sticker shock and get more panels on roofs.

City officials are looking at footing the upfront cost for property owners, who then would pay the money back on their property tax bills over 20 years.

"Everybody is in favor of solar panels, but the issue is if it's not cheap enough, people won't do it on a widespread basis," Councilman Jim Rogers said.

Solar power has soared in popularity in recent years, particularly with the help of government incentives.

Richmond resident Nick Despota went solar last month after learning that state rebates would foot part of the bill. His system cost $20,000, but state and federal rebates and tax credits dropped the final price to about $14,000.

"People who are younger and just buying their house may not have the kind of money upfront to purchase it," said Despota, who considered solar power for two years before taking the plunge. "I think anything that enables people to manage the upfront cost is a good thing."

...

[phantom power]

1. Why is this different than a 20-year home equity loan?

[OKIsItJustMe]

2. My guess? - Interest rates

...

Some worry about how the city will finance such a venture.

Councilwoman Maria Viramontes said she supports solar power but added, "We don't even see how we're going to find the money to get us to enough police officers. And everyone here wants to do violence prevention. Long-term social services to the highest-risk population costs a lot of money. Somewhere, someone is going to have to have a realistic conversation about how we're going to pay for this."

Some financing options might not cost the city anything, Rogers said.

Mayor Gayle McLaughlin added that officials should talk to Earth Share, a national coalition of environmental groups with financial expertise and ideas on how such a program could be financed through the private sector.

Richmond could partner with Berkeley to seek private-sector financing or a bond issue, thereby getting more bang for the buck, Rogers said. Administrative costs for running a program could be shared.

If a house or business with solar panels is sold, the solar tax would pass to the next owner.

Think about it for a moment. If the city floats a municipal bond for example, how would that interest rate compare to the rate an individual would get on a home equity loan? Okay, now amortize that over 20 years http://ray.met.fsu.edu/cgi-bin/amortize ... even a few percentage points will make a big difference.

Now, let's go one step further. Let's pay the interest using everyone's taxes. The solar owner gets a "no interest loan." (Yes, their taxes will go up somewhat more.) Their neighbors get a small additional tax burden (think of it as a penalty for not getting solar panels.)

[phantom power]

4. I would prefer that my taxes get used to pay for more cost-effective energy.

residential PV is just about the most expensive kind of energy going. You'd have to work hard to get less energy for my taxes.

If you are going to tax me for energy, build wind or nuclear.

[OKIsItJustMe]

5. Sorry...

No room on your roof for a nuclear plant or a utility-sized wind turbine.

On the other hand, plenty of room on your roof (and the roofs of your neighbors) for solar panels or (relatively inefficient) domestic-sized turbines.

Just think of it as a power station distributed over all of the roofs in your neighborhood.

[phantom power]

6. True, but I'm not especially wedded to residential, distributed energy.

A power plant outside of town is just fine with me. If we're going to spend other people's money for them, I don't see how it's responsible to purchase energy at triple or quadruple the cost of wind or nuclear, just so we can say "look, we're using rooftops!"

If people just can't bear the idea of a nuclear reactor, at least build a wind farm. They'll get much more energy for their money.

[Kolesar]

7. Who pays for the distribution lines and transformers?

And the staff to manage it?

[phantom power]

8. I've always thought that should be publicly owned and operated.

I'm such a socialist.

However, to address what I assume your point is: all of that will be cheaper per unit energy delivered than installing millions of individual 2 kilowatt inverters, on residential homes. Economies of scale apply even to renewables.

[OKIsItJustMe]

9. Publicly owned utilities work well

That doesn't necessarily make you a socialist.

Now, when you talk about raising taxes to benefit the poor... or help them buy solar panels for their homes... then you'll be talking more like a socialist.


Economies of scale don't always work well.

[thecrow]

3. I'm a Virginian.... where do I sign up?