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Thursday, July 24, 2008

California's Assessment District Solar Finance law AB811



I got a call from Greentech Media about Local Power's view of AB811, signed yesterday by Gov. Schwarzenegger, a bill sponsored by Palm Desert officials to allow cities to provide their residents with low-cost loans for energy-efficient home improvements.

The bill has many leaders of the new movement of third-party-finance solar photovoltaic system marketers and installers taken aback, and some have verbally said they feel threatened by municipalities financing solar, because part of the Solar PPA industry's service is to finance solar, and by financing it, offer to sell people solar power rather than solar power equipment. Today, Solar PPAs constitute a disproportionate chunk of the huge new growth in solar PV sales in the United States.

I told Greentech Media that Solar PPA businesses who adapt their business models will beat out those who don't; and moreoever, that the municipal re-intervention in the energy business to address Climate Change in a big way is both inevitable and also represents the largest, indeed an exponential, step up in the growth of the photovoltaic market (and green DG, and energy efficiency) since the solar PPAs started up after San Francisco's 2001 solar bonds.

In fact the Solar assessment tax authority of Assembly Bill 811 is one of several new municipal interventions, next to Community Choice Aggregation and the use of H Bonds after San Francisco. AB811 allows cities to offer their residents low-cost loans for big-ticket energy efficient home improvements, such as high-efficiency air conditioners and solar photovoltaics with a long-term payback plan linked to property tax payments. This adds to the arsenals created by H Bonds and CCA to offer a third way: persuading homeowners to consent to a tax on their homes in order to secure (lower than Solar PPA cost) municipal financing of these green, energy related home and small business improvements.

More will come in coming years as cities fully take on the leading role in addressing Climate Change. They are already doing it politically, with the leadership of cities and counties in setting Greenhouse Gas reduction targets in the past decade and a half. As the U.S. and U.S. states follow California's lead in passing AB32 creating a compulsory GHG reduction schedule, the Solar PPA industry and indeed Big Energy will increasingly face a re-entry of municipalities into the energy business in the name not of economic warfare, but saving the world from the Climate Chaos and economic insecurity imposed by Dumb (Big) Energy.

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