I N · T H I S · I S S U E
This past July 21st, Governor Arnold Schwarzenegger signed AB 811 into law, a bill that amended the California Streets and Highways Code. It allows cities and counties to provide funds for voluntary property assessments for efficiency measures and renewable energy systems. What the heck does that mean?
It means any property owner - you or me - can get 100% of the cost of a solar system from our city - and repay the loan over time on our biannual or annual property taxes. Just as we are assessed for school districts, sidewalks, undergrounding power lines, etc., California cities can now lend their homeowners and commercial property owners money at preferential rates.
Is this a panacea? Probably not. But can it greatly stimulate investments? Yes. Why? It's a unique financing mechanism that will complement existing financing such as home equity loans. It creates a lien on the property, meaning that the assessment will be transferred to the next owner in the event of sale. And since it is tied to the property, and not its owner, a property owner needs only clear title to secure the loan.
Berkeley and Cisco DeVries got the action going in the City of Berkeley with its announcement of a solar financing district. After considerable program planning, Berkeley has lent $1.5 million to about 40 property owners in a pilot program for photovoltaic systems that was fully subscribed in nine minutes! Berkeley used a different platform as the basis for its program: using the Mello-Roos program that was established in the aftermath of California's Prop 13 that capped property taxes. By establishing Mello-Roos districts, cities can raise funds for fire and police stations, parks, etc. Berkeley extended this to solar systems that provide a public benefit for climate protection.
Enabling private investment was clearly not the intent of Mello-Roos, so Palm Desert-and notably Councilmember Jim Ferguson and then City Manager Carlos Ortega -- sought another route, and ultimately succeeded in amending the Streets and Highways Code to explicitly allow energy efficiency fixtures (that are affixed to the home) and renewable energy systems to be financed through the assessment mechanism.
In Palm Desert and on August 29th - just six weeks after AB 811 was signed into law -- 300 residents were lined up to take advantage of what the City named the "Energy Independence Program." EcoMotion, serving as program designer, worked with City officials as well as legal and financial experts to craft the program guidelines. (These are available on line for other cities.) So far, $7.5 million has been lent or reserved, half for solar, half for efficiency measures such as air conditioning system upgrades, with many more property owners in the queue.
EcoMotion has more recently served as a program design consultant to Sonoma County, resulting in the State's largest program. It was approved by the County Board of Supervisors in late March. The County Administrator and County Controller Rod Dole spearheaded the program initially promoted by the innovative Sonoma County Water Agency. The Energy Independence program in Sonoma will help attain the County's progressive carbon mitigation goals, 25% below 1990 levels by 2015. Sonoma County provides the first regional glimpse at AB 811, with nine incorporated cities, an aggregate population over 300,000, and an economy shaped by vineyards and rolling hills just an hour north of San Francisco.
Facing significant energy and environmental goals and largely unfunded mandates, dozens of California cities and counties are exploring AB 811, from San Diego to San Francisco. A statewide program is being developed for small cities. And a dozen other states, from Vermont to Arizona are exploring similar legislation for assessment financing.
On June 12th EcoMotion is hosting the Palm Desert AB 811 Conference, an intensive, all-day, no-frills conference to explore the potential of assessment financing, and to compare and contrast models for financing and implementation. Program architects from Palm Desert, Berkeley, and Sonoma County will provide lessons learned, counsel and financiers will share concerns and strategies to clarify legal pitfalls.
Please click HERE
for more details and to register for the conference.
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