AB 811

By Scott Gordon

Vice President, Residential Sales, HelioPower

Recently I’ve been hearing a lot about San Diego’s Property Assessed Clean Energy (PACE) program both from customers and from solar companies advertising on KPBS. I find this curious as most of the important details (including exactly when this program will roll out, how much money will be available, and whether you’ll need to do extensive efficiency retrofits before qualifying for solar) are fuzzy at best, so before we delve into all that we don’t know, let’s cover the one thing we do know: we know that CCSE will administer the program. Otherwise, it’s anyone’s guess what’s really going on. A recent visit to CCSE’s website simply resulted in a 50,000 foot view of what PACE is and how CCSE will administer it. Search Google and most of the results herald back to the middle of 2009. As a result, all we are left with is rumor and innuendo. So this begs the question, Is PACE in San Diego worth waiting for?

An examination of other PACE (or AB 811 programs) sheds some light on what we can expect when and if PACE San Diego ever comes to fruition. While AB 811 has helped several cities speed the adoption of solar, most (with the exception of Sonoma) have experienced boom and bust cycles in financing. In many cities, allotted AB 811 money is gone within hours of the first application being submitted. The result is long waiting lists of people hoping that sooner or later additional funds will be available to fund their systems with demand always outstripping supply (of money) by an order of

Solar in San Diego installed by HelioPower

magnitude. For those forced to wait for the next round of financing, there are a real costs involved:  the cost of paying your electric bill, the cost of missing a rebate tier, and the cost of potentially delaying your tax credit by a year.

Let’s examine the positives of PACE financing. PACE requires no credit check or and has a liberal loan to value requirement (you must not owe more on your home than it’s worth). Thus, anyone who is current on their property taxes is eligible. If you have bad credit or have a high LTV, PACE can be a great vehicle for financing energy efficiency improvements. The PACE loan is secured against the property as a first position tax lien. Thus, the property owner repays the PACE loan bi-annually when he pays his property taxes. Interest rates on PACE loans average 7-8% simple interest, which isn’t so terrible if your credit is less than stellar or don’t qualify for alternative financing. Additionally, if you sell your home, the loan stays with the property and is assumed by the buyer.

Now let’s examine the negatives. First, if you are credit worthy, you can generally finance your solar system for 5-6% through a conventional bank or for as little as 3.1% through a PPA such as SunRun. Shaving 400 to 500 basis points off your loan can save you BIG money over the life of the system. Next, PACE money is used up quickly. In other words, if you’re not one of the first in line, chances are the program will exhaust its funds long before your application is reviewed. As a result, you’ll continue to pay high electricity rates while you wait for the next round of funding. Third, you have to pay the loan back as a tax assessment, so you’ll need to be prepared to write a larger check to the tax man bi-annually and budget appropriately.

While I believe that PACE financing in San Diego can be great for certain customers, customers with good credit and home equity are eligible for superior financing with far better terms and faster returns. If you’re considering solar for your home, you’d be well advised to examine all of your available finance options before assuming PACE is the best option for you. You should also consider the cost of waiting in your calculus. It’s possible other financing options will cost you less over the long run, help you be cash flow positive sooner, and provide you with smaller more manageable monthly (rather than bi-annually) payments. Either way you decide to go, HelioPower is here to help you secure the most beneficial financing for your solar project and can help you determine the best path for your unique situation.

Contact Scott Gordon at SGordon@HelioPower.com.

GreenTech Media reported yesterday that the Home Star Program is set to benefit the green construction industry in many ways, including those working in solar.  Creating more funds for solar financing, including the growing movement around PACE (Property Assessed Clean Energy) programs is part of Washington program initiatives. 

The article reported:
With President Obama asking Congress for $6 billion for the Home Star retrofit program and Vice President Joe Biden promoting PACE programs as a means to finance home retrofits and repairs, everyone is going to start getting into manual labor and household repairs.

There are the policies that have been, or soon may be, enacted to provide the needed cash to get the trucks rolling. At least fourteen states and 30 municipalities have enacted PACE programs that allow homeowners to finance retrofits through property tax supplements. Renewable Funding, whose president Cisco DeVries helped created PACE, received $12.2 million in funds from Draper Fisher Jurvetson and other VCs recently. Citibank and other large banks are currently setting up programs to funnel credit to PACE programs.

"With a federal loan guarantee (for PACE programs), it can grow from a hundreds-of-millions to a $400-to-$500 billion program," Jack Hidary, a PACE advocate, told us last year. "It can also help the 1.5 million people out of work in the construction industry."

By “Solar” Sarah Madsen
HelioPower Solar Energy Consultant

Want to go solar and don’t think you can quite afford it, still? Do you need a little more incentive than the

Residential Solar in Suisun installed by HelioPower

state and feds can give you (state rebate and federal tax credit)? How about looking into your local city and county programs? How about checking into Community Action of Napa Valley (CANV) and their “Napa Valley Solar Partnership” program?

The City of Napa, California has been looking for a way to take advantage of AB 811 and be one of the pioneers of citywide residential solar. Their sister county of Sonoma found a fabulous way to incent their green minded residents to go solar. It’s called “Solar Sonoma County.” Residents who go solar can receive a one- time loan for solar system purchase and pay it back over time through their property taxes. Sonoma County’s program kicked off fairly quickly and with great success due in part to the fact that their water district had funds available for the program. Unfortunately Napa City and County have not yet identified a funding pool for their own AB811 program.

In walks Jon Vaden, Director of CANV’s (Community Action Napa Valley) Napa Valley Solar Partnership Program. CANV applied for and received a federal grant to educate the residents of Napa Valley and get as many of them as possible to go solar before the end of 2010. The organization is trying to help all Napa County homeowners go solar, but also has a special emphasis on helping match low-income residents with available loan programs that can provide the upfront cost for solar.

With the grant in place Jon has set out on a trail of solar seminars around the valley called “Making Cents out of Solar” (with me, Solar Sarah, in attendance). He covers how solar works and how residents are connected with PG&E with their “net metering” agreement to buy AND sell energy back to the utility. He also goes over the programs and incentives available, as well as what to look for in a contractor. He explains to homeowners what to expect as it pertains to the process of bidding and installation – basically covering the ins and outs, from paperwork and permits to financing and commissioning your solar system. All of this is done from an educational standpoint with no pressure or steering to any one installation company. Of course I’m always ready, willing and able to schedule a site visit for those eager to get started!

CANV has a prescreened vendor list to assist Napa residents in choosing a qualified installer. Jon has vetted each company carefully, checking their contractor licenses and standing with the Better Business Bureau as well as the requirements of C-10 (Electrician), C-46 (Solar) and NABCEP certifications. The program requires that each company use screened employees and not sub-contractors or temporary workers, ensuring quality workmanship and professionalism from any company participating in the program.

HelioPower, Inc is proud to be a part of CANV’s Napa Valley Solar Partnership and I am privileged to attend every seminar and meeting. I’m Solar Sarah Madsen of the Napa Valley and you can find me at the weekly seminar spot, wherever that may be (find event listings on CANV’s website). I’m grateful to Jon Vaden for including us and believing in my commitment to service the Napa Valley and beyond. Everyone has worked together to create a successful program and it won’t work overnight, but your solar system doesn’t work overnight either  

Now let’s get going GREEN and GO SOLAR with SOLAR SARAH in the NAPA VALLEY!!

You can reach Sarah Madsen via email at solarsarah@heliopower.com.

Source:  Mercury News. 

SANTA CRUZ – What's likely to become the nation's largest solar loan program is in line for $16.5 million of stimulus funds, setting the stage for potentially hundreds of millions of dollars for small energy projects across California, including Santa Cruz County.

The grant, announced Thursday by the California Energy Commission, will fund the administration of a 14-county financing district where homeowners and businesses can pay for solar and other energy efficiency improvements through an assessment on their property taxes.

"We're taking away the (financial) barrier for people who want to do the right thing to protect their bottom line and help the environment," said Virginia Johnson, executive director of Santa Cruz-based Ecology Action, which is helping coordinate the state effort.

With the federal funding, the so-called CaliforniaFIRST program is poised to begin this summer with financing of up to $35,000 for homeowners and $75,000 for businesses, with interest rates between 7 and 8 percent. The financing term is 20 years, with debt staying with the home or business if the property sells.

Administrators say the program will go a long way toward curbing greenhouse gas emissions and staving off global warming as well as generate as many as 2,000 jobs in the emerging green economy.

"It's the economic impact and the environmental benefits that make this program," said Johnson.

Before CaliforniaFIRST took shape, with Sacramento County as the lead administrator, several cities and counties struggled to start their own solar financing programs. While some went forward in places like Berkeley and Sonoma County, many remained stymied by the high cost of startup and liability.

"It would have taken a lot longer to get this happening here (without the grant). Our county does not have a lot of discretionary revenue right now," said Santa Cruz County Supervisor John Leopold, who has long advocated for a local financing program.

The larger 14-county program, which goes as far south as San Diego and north to Yolo County, spreads the operating costs and will allow for lower interest rates, administrators say. Oakland-based Renewable Funding is handling the financing while the federal stimulus money will cover the administrative expense – with no tab for participating governments.

Within the two-year "pilot" period, at least $25 million will be loaned out and as much as $200 million, administrators say.

The financing will be available for a range of work from solar panel installation to upgrading heating, water systems and windows and doors, many of these projects expected to pay for themselves through energy savings.

In Santa Cruz County, where residents of all four cities and the unincorporated areas will be able to participate, local advocates say the loans will lure as much as $60 million in construction work and hundreds of new jobs.

The new funding for CaliforniaFIRST was part of a $110 million award through the American Recovery and Reinvestment Act, earmarked for retrofitting homes, businesses and municipal buildings.

The allocations announced Thursday need a final sign-off by the board of the California Energy Commission before the money, administered by the California Recovery Task Force, is handed down.

"California has always been and will continue to be the national leader in advanced energy efficiency efforts – efforts that continue to reduce energy use, greenhouse gas emissions and petroleum dependence," said Herb Schultz, director of the California Recovery Task Force, in a prepared statement.
Counties in Solar financing Program

Alameda County

Sacramento County

San Mateo County

Ventura County

Fresno County

San Benito County

Santa Clara County

Yolo County

Kern County

San Diego County

Santa Cruz County

Monterey County

San Luis Obispo County

Solano County

Palm Desert solar installation by HelioPower

The City of Palm Desert has announced the upcoming release of $6 million in new funding for its popular Energy Independence Program. Half of the new funds will be dedicated to loans for energy efficiency improvements with the other half reserved for loans for solar projects. The funding will be available to Palm Desert property owners who submit a completed loan application beginning Monday, February 8. 

The City’s Office of Energy Management, 73-510 Fred Waring Drive, will accept applications from Palm Desert property owners on a first-come, first-served basis. Property owners can apply in person by appointment only. Applications submitted by contractors on behalf of property owners will be accepted by appointment with a limit of one application per company each day.

Applications will be reviewed by Office of Energy Management staff, with written notification of approval provided to customers when their application is officially complete. Staff will schedule appointments with customers whose applications are complete to review and discuss the loan documents and processing. If an application is deemed incomplete, notification will be sent to the property owner that they must resubmit. Resubmissions will be accepted while funds are available on a first-come, first-served basis.

Since its creation by the Palm Desert City Council in August 2008, the Energy Independence Program has helped nearly 190 Palm Desert residents and businesses get more than $5 million in loans for solar panels, high efficiency air conditioning and heating systems, and other permanent energy efficiency improvements.

The program makes these energy saving measures more affordable by allowing the City to loan money to residents and businesses at competitive interest rates without the credit checks or appraisals associated with home equity and other types of personal loans. Borrowers can repay the loans over time as part of their property taxes. If the property is sold, the improvements and the outstanding loan balance can be transferred to the new owner.

The Energy Independence Program’s goal is to stimulate investment in energy efficiency and conservation, thereby decreasing energy demand, boosting power generation from renewable sources, and reducing energy costs. When combined with the City’s Set to Save program, it is part of a strategy to reduce energy consumption and demand in Palm Desert by 30 percent over five years.
 
Applications are available at the Office of Energy Management and online at  http://www.cityofpalmdesert.org/Index.aspx?page=484. To schedule an appointment and for more information, please call the Palm Desert Office of Energy Management at 760-837-0287.

For more than 18 months now, California cities and counties have been empowered to offer residents and

Riverside commercial solar installation for Monster Media assisted by city rebate program, installed by HelioPower

 businesses a cost-effective way to install solar panels and other energy-saving measures, yet so far only two cities in the Inland Empire have taken advantage of it – Palm Desert and Yucaipa.

If that’s because too few people understand the scope and power granted them by the signing of Assembly Bill 811, they will now have the opportunity to unravel the mysteries of this program and its potential for their city.  On Feb. 9, UC Riverside will host the AB-811 Symposium, featuring guest speakers from Inland Empire city and county governments, public utilities, solar and electrical contractors.

“The city of Riverside is committed to becoming a Clean and Green city,” said Mayor Ron Loveridge, an early advocate of AB-811 and the opening speaker at the symposium. “Our goal is to increase our renewable energy sources, such as geothermal, hydro, wind and solar.”

HelioPower's Scott Gordon, Vice President of Residential Sales will join the roster of industry experts. HelioPower has installed many projects in the Palm Desert and Inland Empire areas, including the design and installation of the first project under the Riverside Municipal commercial solar rebate program and currently works with other group buying programs. "The combination of AB811 and private enterprise promises to make the dream of solar possible for a much broader number of California property owners," said Gordon.

The AB-811 Symposium will be held at the UC Riverside’s Highlander Union Building from 8:30 a.m. to 2 p.m. on Tuesday, Feb. 9. The event cost of $35 includes lunch and parking.  Although the event is open the public, it’s specifically aimed at county supervisors, mayors and city council members, department heads, staff and private sector partners.

The major sponsor of  the symposium is Southern California Gas Co.; additional sponsors are the Inland Empire Labor Management Cooperation Committee, Viewpoint Green, and the Inland Empire chapter of the U.S. Green Building Council.

“AB-811 is a fantastic tool,” said Marvin Hudson of Viewpoint Green, a division of Viewpoint Financial in Redlands. “It aids local governments in the fight for economic development by putting people to work and circulating dollars.”

AB-811 grants California communities the ability to allow certain loans to residents, be repaid through assessments that appear on their property tax bills.

This idea, making solar more affordable, could result in cleaner energy, plus new jobs for solar installers.
The first step toward taking advantage of AB-811 is for a city or county to create an “contractual assessment district” within its borders. The symposium will answer such questions as: How do you create your own contractual assessment district? What components to include in your program? How to fund your program? How might you administer your program?

For more information or to register for AB-811 Symposium, contact the Inland Empire Labor Management Cooperation Committee  at (909) 307-3400.  USGBC members may attend at the discount price of $25.