The city of Davis is working to save the world, one loan at a time.
On Earth Day, the city hosted one of many climate action forums sponsored by the Valley Climate Action Center and the city of Davis Climate Action Team.
Financing, tax breaks and utility rebates for energy saving that become available in 2010 were the main points of discussion at the Community Chambers at City Hall last Thursday night.
Property Assessed Clean Energy (PACE), a state initiative approved in January, allows property owners to pay off loans over a period of up to 20 years as part of their property tax bills. New buyers of the property will assume the loan if the original owner moves.
Last week, the California Energy Commission approved $16.5 million in renewable energy funding for statewide PACE pilot projects in late summer. Funding will go toward local education, outreach and additional services, as well as an interest rate buy-down for early program participants.
Annie Henderson of RenewableFunding said the main goals of PACE are to lower green house gas emissions, raise awareness about environmentalism, centralize administrative activities and create new jobs.
“It’s an interesting time in history,” Henderson said. “There’s an awful lot of stimulus money right now and we can really utilize the money to forward the programs.”
Mayor Pro Tempore Don Saylor led the forum.
“For a small amount of money we can identify problems and fix them with simple actions,” Saylor said. “We’re not slackers in Davis either. Five percent of Davis homes already have solar panels.”
Paul Navazio, Davis assistant city manager for finance, said funding is an issue facing energy innovations.
“The hurdles lie less in concept and more in the nuances of financing it with an economic crisis and many lenders unwilling to loan money for these projects,” Navazio said. “The challenge is going to be how to structure the program so that lenders have interest in helping to finance these programs.”
Bank of America is currently the only bank that offers this type of loan.
Davis and Yolo County are among 122 local governments that are planning to inaugurate the new programs.
For homebuyers, green mortgages allow larger loans for buyers willing to invest in improvements that make home energy use more efficient.
Rebates from the federal Home Star program, now making its way through Congress, could cover half of the investment; rebates from utility companies (such as PG&E) could cover one-fourth; and the balance would be financed by a PACE loan at 7 to 8 percent.
A California Energy Commission is also scheduled to approve a $3.5 million to provide a subsidy to buy down loan rates. Tax breaks and solar initiative rebates will also be available.
Most of these programs will require property owners to invest in energy efficiency before solar because they are more cost-effective. Applicants must reduce their energy use by 10-20 percent before they can apply funds to solar.
Reed Richardson of Renewable Energy Corporation (REC) Solar said an alternative method of financing solar panels is through a power purchase agreement (PPA). PPAs allow for third party ownership of panels, introducing solar as a service. The majority of panels are now financed through PPAs.
The next forum on May 5 will cover reducing carbon footprints through urban forestry, sustainable agriculture and low-impact landscaping.
ANGELA SWARTZ can be reached firstname.lastname@example.org.