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San Diego Solar Power Financing
The one California city that has more rooftop solar panels than any other city in the state is San Diego. The city boasts almost 2,300 solar roofs that together have the potential to generate enough energy to power 12,000 homes. What’s more, the number is expected to rise in the coming months owing to the new projects floated by the Department of Energy or DOE.
No one denies the advantages of going solar in San Diego any more; the buck stops at the cost of installation. The up-front expense involved is estimated to be $25,000 to $60,000, depending on the size, even after all the federal tax credits and state rebates are accounted for. Coming on the heels of the recent recession that we are still not out of fully, it is not easy to shell out that kind of money.
Solar system financing options
Wide-scale solar financing options are being floated to help homeowners who have shied away due to the expense take the plunge. This includes the 40 new Solar America Cities Special Projects of the Department of Energy. $10 million have already been earmarked for 16 cities in California. The funds are routed from the American Recovery and Reinvestment Act, or ARRA, to help cities like San Diego to increase solar energy through innovative programs which the DOE will then replicate across the nation.
In San Diego, the solar financing model operates by linking it to the property tax bills of the house that has the solar energy system installed. The cost of solar power installation plus a nominal fixed-for-life interest amount is clubbed with the property tax bills and locked in for 20 years. Installments are to be paid each year by the current owner of the house.
For example, owner A installs solar system that costs $20,000. Across a 20-year period, the capital cost will come to $1,000 plus interest a year. If the house is sold, the new owner continues paying which is like buying the solar system through property taxes. Any renewable energy credits, or RECs, to be claimed go to the current resident of the house.
Municipalities were able to create loan programs for renewable energy systems via tax assessments owing to the California law AB811, passed on July 21, 2008. In San Diego, it is commonly referred to as the Solar Roof Program, a pilot that launched in July of 2009. The University of San Diego School of Law calls it the ‘single best road to long-term emissions reduction targets mandated in future Waxman-Markey-type legislation.’
Loans for solar power systems
The Solar Roof Program will give loans from $5,000 to $50,000, and be offered on a first-come, first-served basis, with various conditions applicable. Even so, the program provides for long-term solar financing to homeowners who could not have afforded it and helps the city finance it. According to Erik Caldwell, policy advisor to San Diego Mayor Jerry Sanders, this is the biggest benefit of the program since San Diego was never in a position financially to finance solar power installations.