Solar solutions

Solar solutions

Working to make solar panels more affordable in San Francisco

By Amanda Witherell

When Berkeley mayor Tom Bates recently announced a creative city plan to financially assist homeowners who want to dress their roofs in solar panels, people across the Bay wondered if San Francisco could come up with something similar.

It’s happening. Sup. Gerardo Sandoval is working with the City Attorney’s Office on legislation to make solar panels more affordable for property owners. “The idea with my proposal is the city would use its very high credit rating to borrow money at almost zero cost,” the District 11 supervisor said. That money would be turned over to citizens as low-interest loans to be paid back through a monthly assessment, similar to a property tax, with a very low interest rate. “It’s going to be a lot cheaper than what homeowners can do on their own.”

A photovoltaic array for a typical home can cost the owner as much as $40,000, though state and federal incentives can reduce the cost by about $10,000. Systems are typically guaranteed by the manufacturers for 20 to 25 years, and the cost is recouped over time in reduced energy bills.

But the initial investment is high enough to discourage many would-be solar users. “The main challenge for many homeowners is the substantial upfront cost. It could easily cost you up to $50,000 to upgrade your home,” Sandoval said of the bill for items like insulation, solar panels, and wind generators that can help modify a building to use less energy more efficiently.

Under this new financial program, the entire city would be declared a tax assessment district — similar to a Mello-Roos, or community benefit, district — with a resident opting in by deciding to buy solar panels. Both Berkeley and San Francisco are charter cities, which gives them the ability to tweak state laws, like the one that permits the creation of Mello-Roos districts, to meet local needs.

The plan to help private property owners has a number of public benefits. By generating most of their power on their roofs, homeowners will draw less juice from the grid, which is heavily dependent on fossil fuels (and is ultimately inefficient, as much energy is lost through transmission from distant power plants).

San Francisco is fast closing in on its 2012 deadline to reduce greenhouse gas emissions to 1990 levels, and a July Civil Grand Jury report found the city would have to triple its current reduction rate to meet that goal. Sandoval’s plan would help. According to a federal study, one kilowatt of solar electricity offsets about 217,000 pounds of carbon dioxide emissions per year. Additionally, the city is aiming to provide 31 megawatts of solar power capacity through Community Choice Aggregation, which Sandoval sees as part of his plan.

“Both programs are about organizing our city to get off the grid and get off fossil fuels,” he said, adding that he hopes this financing model will expand to all renewable-energy and efficiency upgrades to homes and businesses.

The plan is still in its nascent stages, and a few administrative and legal questions remain.

It’s unclear which city department would administer the program, although San Francisco Public Utilities Commission spokesperson Tony Winnicker said, “We already have a framework to administer something like this,” citing the management infrastructure of the city’s water and sewer systems. The Department of the Environment has also been suggested. Sandoval said, “There are a lot of different city agencies who see benefits of administering the program.” He was clear that it should remain in the public sector, with the possible assistance of community-based nonprofits that understand the local needs of their neighborhoods.

Sandoval also sees his proposed program as a way to foster the right kind of industry in San Francisco. The volume of solar business could bring more manufacturing companies, and City College of San Francisco and other educational programs could partner with manufacturers to train consultants and installers.

Barry Cinnamon, CEO of Akeena Solar, a Los Gatos PV installer, expressed enthusiasm and support for the plan. “It’s really commendable that cities like San Francisco and Berkeley are trying to find ways to do this.”

Sandoval hopes to see the program up and running within a year, and said, “If no one accuses me of conflict of interest, I’ll be among the first to sign up.”

Originally published November 14, 2007 in the San Francisco Bay Guardian