Solar Energy Stuck
When Will Your City Start Solar Savings for You?
by Andrew Morales
July 22, 2010



Sure going green, saving the environment is all well and good, but how much is it going to cost? Do you want a $50 monthly electric bill or a $500 bill? That’s a no-brainer.

There is a great solar program…but it’s only available in Palm Desert. At least it was until two weeks ago.
A new twist occurred when a federal agency shut down a popular local solar energy plan prompting a protest lawsuit filed against the agency by California Attorney General Jerry Brown on July 14. Why?

On June 8th, Palm Desert’s $5 million solar energy plan was suspended by the Federal Housing Finance Agency leaving $1.2 million in limbo. This doesn’t make sense. Why suspend a state program creating green jobs and saving money? Defendants in the lawsuit, Fannie Mae and Freddie Mac, objected the Palm Desert program was unfair saying mortgage payments are more important than energy savings and jobs.

Although details of terminating the program might be seeded in jealousy, greed and secrecy, Palm Desert’s uniquely designed plan was simply the first of its kind in the state.

California legislators passed assembly bill 811 in 2008 enabling all California homeowners to “finance the installation of energy efficiency improvements and distributed generation.”

While some cities never responded to our survey, other cities spoke encouragingly of the plan but indicated little or no action was taking place.

Palm Springs was the only city attempting to jump on the AB 811 bandwagon. Michelle Mician, Palm Springs City Manager of Sustainability, said the Palm Springs program was “in the infancy stages” and she wanted the city to “ensure energy efficiency to the highest degree” before going forward with their plan.

Since Palm Desert was one sponsor of this bill, they got a head start for solar energy savings - targeting some of the wealthiest homeowners in the area. Unfortunately, no other desert homeowners have ever been eligible. How much do you think you’d benefit from this? Let’s take me for example.

Dave Mourhess, Regional Manager for SunTrek Industries’ Coachella Valley branch, helped calculate how much it costs to put solar panels on my house.

I live in a normal sized home in Palm Springs. My electric bill averages $235 a month. In energy terms, this translates into 1,000 Kilowatts per month. Calculating my annual consumption of Kilowatts (which is what solar energy and electric companies do) it equals 12,000 Kilowatts needing 30 solar panels. What’s this cost?

$45,000. In check or cash, up front. That’s a lot of money in tough economic times.

Installation of solar panels raises the value of your home, but that increases your taxes. By law in California homeowners installing solar panel take advantage of tax credits. Basically, you add value to your house and the state government doesn’t consider it a liability to tax you on.

You also qualify for a 30% federal income tax credit for solar installation. This means the $45,000 paid up front is reduced down to $30,000. Once installed your electric company gives you a rebate of $9,000 with monthly electric bills cut by as much as 80%.

With installation costs cut in half, there’s $20,000 left. Even though the electric bill from now on will be cut by as much as 80%, and you received thousands of dollars on rebates, you still won’t break even. This fact alone discourages other cities from doing this, but not Palm Desert. They got a special deal.

Palm Desert’s program is basically a loan:
• Requiring no credit checks.
• Available to Palm Desert homeowners.
• Minimum of $5,000 is received and secured by the value of the property (which isn’t hard seeing as how Palm Desert has made their homes energy efficient in advance.).
• Eliminating the need for homeowners to put a deposit for the solar panels.

While this lawsuit plays out, Palm Desert’s citizens are enjoying cooler and energy efficient houses while the rest of the valley wonders when or if they’ll ever have a shot at it now.

The truth of the matter is even if the lawsuit rules in favor of Palm Desert, they will still be the only city with the solar plan, but they aren’t the only ones with access to it. The state has granted it to all California homeowners. When will your city start jumping on the AB811 bandwagon and delivering green energy to your home?