Santa Cruz and the county approve energy efficiency pilot program
Santa Cruz is a step closer to lassoing the enigmatic power of the sun after the city and county’s coinciding decisions on May 12 to move forward on a program that will make “going solar” more accessible and affordable for property owners. Both the City Council and Board of Supervisors voted unanimously to advance the Energy Independence and Economic Stimulus Initiative, which will involve launching a pilot program sometime later this year.
The program, also known as the Santa Cruz Energy Efficiency Program, will create special finance districts in the City and County, respectively, that allow residential property owners to install solar panels and/or solar thermal systems and pay for it over a 20 year period as part of their property tax bill.
“The crux of [the special finance district] is that it is as if your house went out and got the loan and you didn’t, and that loan is repaid in your property taxes over 20 years,” explains Colin Clark, Program Specialist for Ecology Action’s Climate Group. The beauty of this, he adds, is that the costs won’t follow a homeowner who moves—the payments stick with the house, not the person.
Ecology Action, the local nonprofit with its hands in many of the region’s eco-progressive projects, helped spearhead the initiative, which was more than a year in the making and modeled after similar programs in places including Berkeley and Sonoma County. They partnered with the City and County, as well as local solar companies and the Santa Cruz Community Credit Union to hash out the two-phase plan. The Energy Efficiency Plan, and subsequent Solar Finance Districts, comprise Phase 2. Phase 1 is where the SCCCU comes in.
Bill Maxfield, spokesperson for Ecology Action, describes Phase 1 as a critical interim step to make widespread solar installation take off immediately.
“When you launch a special finance district, there is a lapse from the moment you decide to pursue it and the moment it is launched and available for people to participate in,” says Maxfield, adding that, in this case, that gap is likely to be a number of months. The coalition behind the initiative worried that this interval would prevent anyone who is currently interested in solarizing their homes from doing so, which would be counteractive to the plan’s economic stimulus goals.
“That would be a big problem,” says Maxfield. “So what has happened is that the Credit Union has stepped up in Phase 1 to provide their own project—a bridge loan program that says there is no reason to wait, there a program ready today.”
Dubbed The Green Loan Program, the Phase 1 loan is available now through SCCCU and operates like a normal loan would, unlike the special finance district that sticks the house with the payments. However, the initiative stipulates that anyone who receives the loan can choose to be grandfathered in to the pilot program once it is launched, effectively trading their SCCCU loan for participating in the special finance district program. As additional incentive to take the SCCCU loan now, interested Green Loan participants will be first in line for the City and County programs.
Currently, SCCCU is the only bank offering the loan, although effort leaders hope others will follow suit. Sheila Schat, of SCCCU, says that creating the Get Green Loan Program was in synch with the company’s social and environmental missions.
“This is a natural evolution of our position and ability to help community members reduce their carbon footprint,” she says. Whereas the Phase 2 districts are only for those wishing to install solar panels and solar thermal hot water heaters (at least for now), the Get Green Loan Program is available for a much wider range of energy efficient improvements, including rain water catchment systems, high efficiency HVAC, and other forms of energy-saving roof systems.
The environmental benefits of making Santa Cruz City and County more solar-operative are vast; Ecology Action estimates that if a little over 1,800 homes went solar, the county would easily meet its AB 32 goals, which require municipalities to return to 1990 levels of emissions by 2030.
The economic stimulation would also be significant. According to Clark, if all forms of energy efficiency improvements are accounted for, $2.32 would enter the local economy for every one dollar spent on energy efficient projects. If the pilot program evolves into a full-fledged, permanent program, as planners are hoping it will, job growth will also multiply as the local solar industry expands. “This is taking the green economy out of the theoretical and actually putting it into play,” says Maxfield.
And while the program will employ more people and inject money into the local economy, it will not be using any money from the city or county General Funds or taxing the governments or non-participating residents. The pooled tax monies from program participants will cover the city and county’s costs (in the current planning stages, pledges from Ecology Action and solar companies are doing so), making the entire effort cost neutral. Still, some, such as City Manager Dick Wilson, disapprove of the implementation of any programs in a time of such serious deficit.
Clark, however, believes that the aforementioned economic perks will make it worth the initial process. “Cost neutral is the goal, but I see the opportunity for this program to be cash flow positive,” he says.
The program will also prove cost positive for homeowners, according to Joel Kauffman, Director of Business Development for Independent Energy Systems, the company responsible for nearly 50 percent of the region’s solar installations. Not only would a household eventually be offsetting their carbon emissions and adding value to their home, but they could see their system pay-off in as little as five years, after which they’ll have no energy bills to worry about. “It becomes a no brainer [for people] at this point because there is no cost to them,” Kauffman says of enlisting in the program.
Of all the homeowners Kauffman consults on going solar, only 20 to 30 percent end up going through with the process. However, he says that 100 percent of the rest say they would, too, if it were more financially feasible —which it now is, thanks to the arrival of the Energy Independence and Economic Stimulus Initiative. The average cost of a system is $21,200, which is then lowered to $12,300 after state and federal tax rebates. Between these returns and “historically low prices” due to a disheartened economy and slow winter season, Kauffman says now is the best time to go solar, before the program gets rolling and solar prices go back up. “With Phase 1, people can get the low prices today and, a few months from now, roll their system into the [city or county] program,” he says. “Demand will skyrocket, which will push our prices up, so now is the prime time to go solar.”
And for those who can’t take a loan out now, there is always Phase 2 to look for around the corner, a program that Clark admits may not be the cure-all to environmental and economic woes, but is a good start at curbing them.
“This isn’t the silver bullet, but it is another tool in the box and it helps get to the population that can’t, for whatever reason, go to the credit union,” he says.