The County of San Diego will consider potential options to help homeowners finance renewable energy systems and energy efficiency devices.
A 5-0 San Diego County Board of Supervisors vote Sept. 23 directed the county’s Chief Administrative Officer Walt Ekard to explore the cost, benefits and feasibility of implementing two potential financing programs and to return to the supervisors with a recommendation.
The programs would be voluntary for property owners but would allow projects to be paid over time as additions to property tax assessments.
One option would be for the county to join the statewide California FIRST program. The other would involve the county contracting for a stand-alone program specific to San Diego County. The California FIRST program would have lower set-up and administrative costs while a stand-alone program would allow for greater flexibility.
“Partnership will be the name of the game when it comes down to deciding an eventual program,” said board Chair Dianne Jacob.
Renewable energy devices such as solar energy systems and other energy efficiency improvements such as new windows, roofing and insulation save an energy customer money over time but can be expensive to install. The State of California recently passed Assembly Bill 811, which allows municipalities to create financing programs to enable immediate installation of renewable energy or energy efficiency devices with repayment through property tax bills. While AB 811 did not provide a source of funding for those programs, the California Center for Sustainable Energy has worked with potential partners for external financing.
“The difficulty that we face in implementing this solution is money. It appears that the solution may have arrived,” said Supervisor Pam Slater-Price. “Payment for improvement is spread out over 20 years.”
The long-term repayment through property tax bills also addresses the deterrent that the initial homeowner might not stay in the home long enough to reap the return on investment for the energy-saving systems.
“The benefit of the improvement stays with the property as does the obligation to keep paying the bill,” Slater-Price said.
“The benefitting property serves as a security,” said Terry Clapham of the California Center for Sustainable Energy. “There’s little or no personal credit necessary.”
Personal credit history may affect the interest rate paid, which is expected to range between 7 percent and 10 percent.
The program includes an energy audit for property owners, since in some cases other energy-efficient devices may be more feasible than solar panels.
Clapham noted a survey in which 92 percent of property owners expressed medium, high or very high interest in such a financing program.
“They just need a financial vehicle for them to do it,” he said.
If the County of San Diego joined the California FIRST program, the expected one-time legal, marketing, and technology set-up cost would be $25,000. The one-time setup cost for a stand-alone program is estimated at $50,000.
California FIRST would allow some customization in the design of a program but involves some standardization in offerings, and local residents would be competing with individuals throughout the state for funding. The size of any bond issuance by an external financing partner along with the number of interested parties would be factors in the availability and timing of the benefits for local participants.
“I’m extremely eager to see which of the programs the staff thinks fits best,” Jacob said.