But Gainesville Is Getting Results
It’s a frustrating problem for renewable energy advocates: Places like the Sunshine State produce far less energy using solar technology than cold and cloudy Germany.
“The fuel is free, but to buy the equipment to capture and harness that fuel, you essentially have to prepay your energy bill for the next 30 or 40 years,” explained environmental journalist Peter Fairley, the moderator of a Saturday panel on the financing of solar energy. “What solar needs are mechanisms to reduce the cost.”
One of the things that Germany is doing to quickly deploy solar technology, feed-in tariff programs, has been adopted by a community here in Florida, with impressive early results, environmental journalists gathered in Miami Saturday learned.
Feed-in tariff programs, also called Clean Local Energy Accessible Now – or CLEAN – was responsible for 86 percent of the solar technology deployed worldwide in 2010, according to Pegeen Hanrahan, former mayor of Gainesville, Fla. The Gainesville municipal power company was the first in the United States to use a feed-in tariff program and has built nearly nine megawatts of solar capacity since the program began in 2009, she said.
The program works by changing the economics of installing solar panels on a homeowner’s roof, or on a large commercial building. Take your average homeowner. For about $30,000, he can install solar panels on his roof, reducing, or even eliminating his power bill. But, even with government rebates and tax incentives, it will take 15 to 20 years for those panels to pay for themselves.
Feed-in programs work by instead paying the homeowner a reasonable return on his investment – in Gainesville it’s between 4 and 5 percent. The energy the homeowner’s panels produce is fed directly into the municipal power system.
“With feed-in, you get your investment back in six to eight years,” Hanrahan explained.
The utility paid for the program by charging customers roughly $1 per month more on their electric bills. The system only adds 4 megawatts per year, to keep that cost to customers down. The program has already brought the costs of installing solar panels down because increased demand has brought several new companies into the area.
It’s also creating jobs and has lowered Gainesville’s carbon emissions. The city is on track to meet the Kyoto Protocol goals of lowering emissions to 7 percent below the 1990 rate by next year.
Much of Gainesville’s success in lowering its emissions was from a biomass plant, with conservation efforts also contributing significant carbon savings. But all those new solar panels on big businesses and small homes have also contributed to the reduction.
Julie Patel, an environmental journalist with the Florida Sun Sentinel, told the gathered journalists about another initiative designed to encourage solar deployment. Property Assessed Clean Energy, or PACE, programs allow local governments to set up special taxing districts that can float bonds to pay for low-cost loans to homeowners to install solar panels. The loans are paid back as a property tax assessment.
PACE programs across the country were stalled in 2010 when the federal government instructed Fannie Mae and Freddie Mac to stop lending to homeowners who participated in the programs.
“The lenders are concerned about what happens if someone defaults. Who is going to pay that tax assessment?” she said.
California has sued to get the federal government to back off, arguing it should not be interfering in what is a local issue. And a bill is pending in Congress that would allow PACE financing if local governments meet certain strict requirements designed to make sure homeowners don’t default.
But for now, PACE programs are pretty much restricted to commercial buildings.
Peter DeNapoli, manager for the eastern region of SolarWorld USA, said part of the problem is any effort to deploy nonconventional energy is “perceived as a tax.”
“It’s not a tax,” he insisted. “The utilities go and get full cost recovery for new generation projects they build. This is the same. It’s energy generation.”
He is frustrated with the assumption that solar energy requires subsidies to be competitive with conventional energy generation like nuclear or coal.
“We don’t,” he said. “Just take away the subsidies given to the conventional industries.”