AB 811 Pushes San Diego to the Front of the Solar Initiative

In July, San Diego will roll out a new program that will allow the average home owner to add solar power to their house under California’s new AB 811 initiative. 

California’s AB 811 program, which was approved last July, was designed to allow property owners to finance the installation of renewable energy systems and have the financing incorporated into their property tax payment.  The Solar Roof Program is the pilot program for a large range of renewable energy programs to be adopted within San Diego.

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San Diego is one of the first large U.S. cities to put AB 811 into effect.  There have been other cities, such as Palm Desert, with their Palm Desert Energy Independence Program, to put AB 811 in place, but the San Diego solar market is eight times larger than Palm Desert which means that San Diego will be taking a large step which will hopefully inspire other large cities to follow.

Essentially, the Solar Roof Program allows owners to install solar power systems on their homes and add the payment to their property tax payment with one of the big incentives being that the payment will be transferred to a new owner in the event the home is sold.  Right now, if a home owner wants to purchase a solar power system for their house, they have a few different options.  They can take out a home equity loan or a line of credit, use existing credit cards, or utilize their personal savings.  With a solar power system running anywhere from $25,000 to $50,000+, these options may be less than ideal, and all of these options do not allow the home owner to transfer the cost of the unit once the house is sold which leaves them paying for a unit they no longer own and from which they no longer benefit.  Of course, a solar system does increase the value of a home, so in the event of a sale the owner may be able to recoup some of the system costs.

With the cost of the solar power unit incorporated into the property tax payment, the owner is able to spread out the cost of the unit over 10 to 20 years while receiving the benefit of a lower utility bill and then transfer that savings to the new owner in the event of a sale of the property.  If the owner stays in the home past 10 to 20 years, he will have paid for the system and then be able to continue to reap the benefits of a lower energy bill.

The Solar Roof Program, according to Erik Caldwell, policy advisor to Mayor Jerry Sanders, eases “barriers to entry to those renewable energy markets.”
                                       
There are many benefits for putting a solar power system on your home.  The most noticeable and obvious benefit is a lower utility bill, both current and future.  Electric rates have made a significant jump since previous years and experts say that the rates will continue to increase in the future.  Solar power is significantly cheaper than electricity power especially when the cost is spread over a long period of time. 

On top of the savings benefits, a more macro benefit for switching to solar power is the environmental impact solar energy has.  Going solar will reduce ones consumption of fossil fuels and decrease emissions of greenhouse gases.  In other words, going solar will reduce your carbon footprint.

San Diego will see an economic benefit from the implementation of the Solar Roof Program.  Ultimately, the program will create more demand for solar power installation which will in turn create more jobs in the solar industry.  Currently, when energy is purchased off the grid, the energy and the jobs associated with that energy could come from other cities which are oftentimes hundreds of miles away.  The jobs created with the installation of solar power systems would create and keep jobs here in San Diego.

As far as the government’s involvement in this program, the program will allow San Diego to take a back-seat approach which will benefit the purchaser because it will open the market for consumer competition.  It is up to the home owner to decide what type of system they will install and who they will get to install it.  With this back-seat approach, then, the marketplace, not the city, will dictate the price. 

According to Caldwell, “when you’re dealing with a municipal utility you’re going to have a lot of regulations and additional costs associated with government.  That is one of the reasons that we would like to operate our program outside of city government.  There are greater efficiencies in the private sector than can be found in government.” 

The Solar Roof Program is just the initial stage in the ways San Diego plans to take advantage of AB 811 in order to implement a number of energy efficient programs.  The first cycle of the Solar Roof Program will start with a goal of 150 to 300 homes obtaining San Diego solar energy systems by the fall of 2009.  After about a year, the plans are to expand into other renewable energy markets, such as solar hot water heating, wind power, and fuel cell energy.  In the future, a home owner will have the option to choose which renewable energy source they would like to take advantage of under AB 811. 

“If you guys pull this off, you would have trumped the cities who stand as the most progressive on green issues, like Santa Monica and Davis.  That is a very smart move” said Vincent Battaglia, co-owner of Renova Energy Corp. of Palm Desert.

With San Diego as a renewable energy model, hopefully, more cities will follow in its footsteps and adopt similar energy efficient programs under the AB 811 initiative.  It is solar power today which will hopefully lead to an energy independent tomorrow.