ENCINITAS: City contemplates residential solar power program

North County Times

December 25, 2008-- Shifting to solar power can be a costly proposition, but the city of Encinitas is considering a way to make those start-up costs less onerous.

Under a proposal that the City Council asked staff to review earlier this month, homeowners could pay off new solar installation expenses through 20-year loans. The loans would appear on their yearly property tax bills.

"The beauty is in the simplicity," local solar company owner Marty Reed said in a telephone interview.

Reed, who is helping the city put together the program, said the loan option is available thanks to the passage in June of Assembly Bill 811. That legislation allows cities to create private financing agreements if those programs encourage the installation of solar panels and other energy-saving equipment.

The cities don't have to put up the money ---- they are allowed to contract with private financing companies, Reed said.

Meanwhile, the homeowners benefit because they don't have to pay their solar installation expenses all at once, he said. Instead, a loan is attached to the property. If the owner sells the home before the debt is paid off, the new owner is required to continue making the payments.

It's much like the assessment districts that cities establish in new developments to pay for roadwork improvements or other neighborhood projects in a given area, Reed said.

Encinitas isn't the first town in California to try out such a program.

That honor goes to the city of Berkeley, which began seeking solar loan applications from residents in early November. Within minutes of opening its online registration, it had 40 applicants --- the total number that it planned to allow to participate in the first phase of the program, the city of Berkeley's Web site indicates.

"By the .... close of the application period, the number of applications reached 77," the Web site states.

The city of Palm Desert also has begun a solar loan program, while the city of San Diego is in the process of establishing one.

Palm Desert's program initially will loan out $2.5 million and the loans will have interest rates that do not exceed 7 percent, a Palm Desert city staff report indicates.

There are limitations on the size of the loan that homeowners can obtain, the staff report continues. The minimum loan amount is $5,000 and any loans over $60,000 must have special permission from the city manager.

Reed said people who live on the coast can spend upwards of $25,000 for a solar system that can take care of their heating and cooling needs. Inland folks who are heavy air conditioner users will need a system that costs roughly double that, he said.

Andrew McAllister of the San Diego-based Center for Sustainable Development told the City Council earlier this month that the new state legislation aims to speed the pace of solar panel installation statewide. He said Encinitas has roughly 25,000 dwellings and about 1.5 to 2 of them each month install solar equipment.

Unless that rate increases, it will take decades to get to a good solar penetration rate, he said.

City Council members said the loan program sounded like a great proposal to them. Councilman Jerome Stocks called it "a concept we need to run with," while Councilman James Bond wanted to know how much money someone like him would save by going solar.

McAllister responded that the folks who stood to gain the most are those who currently have heavy power usage, especially people with swimming pools and hot tubs.

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