N Y Times

Environment Space & Cosmos Harnessing the Sun, With Help From Cities

By LESLIE KAUFMAN
Published: March 14, 2009
PALM DESERT, Calif. — Rick Clark’s garage is loaded with fast toys for playing in the sun. He has a buggy for racing on sand dunes, two sleek power boats for pulling water skiers, and a new favorite: 48 solar panels that send his energy meter whirring backward.


J. Emilio Flores for The New York Times
Debbie and Chris McNicol have had solar panels installed on top of their home in Palm Desert, Calif.

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Times Topics: Solar Energy


J. Emilio Flores for The New York Times
Mr. McNicol says he will use the savings for his racing hobby.
Bronzed and deeply lined from decades of life in the desert sun, Mr. Clark is not one to worry about global warming. He suspects that if the planet’s climate is getting hotter, it is part of a natural cycle and will probably correct itself. “Experts have been wrong before,” he said.

But late last year, Mr. Clark decided to install a $62,000 solar power system because of a new municipal financing program that lent him the money and allows him to pay it back with interest over 20 years as part of his property taxes. In so doing, he joined the vanguard of a social experiment that is blossoming in California and a dozen other states.

The goal behind municipal financing is to eliminate perhaps the largest disincentive to installing solar power systems: the enormous initial cost. Although private financing is available through solar companies, homeowners often balk because they worry that they will not stay in the house long enough to have the investment — which runs about $48,000 for an average home and tens of thousands of dollars more for a larger home in a hot climate — pay off.

But cities like Palm Desert lobbied to change state laws so that solar power systems could be financed like gas lines or water lines, covered by a loan from the city and secured by property taxes. The advantage of this system over private borrowing is that any local homeowners are eligible (not just those with good credit), and the obligation to pay the loan attaches to the house and would pass to any future buyers.

The idea of public financing for home solar systems began two years ago in Berkeley. While it took months to untangle the legislative knots at the state level and get banks lined up to back the project, the concept took on a life of it own.

Cisco DeVries, who developed the program for Berkeley but has since moved on to a company that administers and finances similar programs for many towns, said: “I’ve never been part of something like this where the power of an idea has grabbed so many people so quickly. It is viral.”

In California, about a half-dozen cities including San Francisco and San Diego are already committed to their own solar programs. And outside of California, at least a half-dozen states, including Arizona, Texas and Virginia, have introduced bills to allow municipal financing. Colorado has already passed a version of the law, and the City of Boulder is on the verge of beginning a program.

Municipal financing comes on top of other government supports. California residents receive a straight rebate for about 20 percent of the cost of a solar power system. In addition, a federal income tax credit for 30 percent of the cost of installing solar panels was extended to participants in the municipal loan programs as part of the economic stimulus bill passed by Congress. And there are efforts to change the federal tax code further so that cities can borrow the money to lend tax free.

But public financing of solar power also has critics, who say government is essentially subsidizing and encouraging a form of energy production that would otherwise not be cost effective. Severin Borenstein, director of the University of California Energy Institute in Berkeley, who is concerned about the proliferation of the programs, said, “It would be better for local governments to do energy efficiency and skip the solar panels.

“If you count the full-interest cost without the tax subsidy, residential solar panels never pay for themselves,” he said. “We shouldn’t be making it a major public priority.”

However, cities, which are charging 7 percent for the guaranteed loans, do not have the same financial risk as the consumers. And for cities like those in California that are required by state laws to reduce their carbon emissions, officials have to make calculations other than costs and are going ahead anyway.

No city is as far along as Palm Desert.