Answering Miriam: Subsidized Residential Solar Panels

This morning Miriam wrote: “Now where’s our cheap, subsidized residential solar panels?”

Funny you should ask!

Earlier in the month, San Diego implemented a plan to subsidize solar panels for residential customers. Well, sort of.  The biggest challenge to getting people to install solar panels is the upfront cost. I’ve read everything from $25,000 to $40,000 to power a single-family home. San Diego taps a California state law allows cities and towns to create Renewable energy zones. Within these zones, cities can invite home owners who install various kinds of energy efficient or renewable energy devices to pay off the cost of the installation through an added fee tacked onto their property tax.

In San Diego a home owner (or business owner) can apply to the city to buy solar panels for thier homes.  The city will front all of the money for purchase and installation of the solar panels. The home owner then pays the city pack over the next 20 years as part of her property tax bill.  Adding to the convenience of the program, the fee is attached to the property, not the home owner, so when the property is sold, the owner walks away from the debt as well as the panels.

On the city side, the process is entirely cost neutral. Applicants pay a fee to become a part o the program. The city then takes advantage of it’s ability to take out low interest debt in the form of municipal bonds. Cities pay far less in interest (even scandal-strewn San Diego) then individuals do because they have an excellent record for paying back, and the bonds are sometimes tax-free (depending on how they’re structured).

the program also creates a single clearing house for companies that want to sell and install solar panels. The city will point home owners to companies that sell, install, and maintain solar panels in the area, acting as a single clearing house for information.

There are other benefits too. I’ve interviewed people who claim to save $800 a month (see end of story) on their electric bills in summer months, and the woman who became the test subject for the new tax program said she saves $150 a month in the summer. Then there’s all that nice “Saving the world” stuff that she can feel good about. There’s no reason a nearly identical program wouldn’t work in other states, even if the states need to incentivize some other kind of renewable energy.


11 Responses to Answering Miriam: Subsidized Residential Solar Panels

  1. This is an absolutely awesome idea! I wish more areas and governments would implement similar schemes. Here in Australia we get a grant back when we install solar panels to help towards the up front cost. However you are still left with a large cost. With this system it enables you to have no up front cost and simply pay it off just like you would your power bill (except you’ll save money). I especially like the bit how the new home owner takes on the debt if the home is sold as I think this is the way it should be. The solar panels are a part of the house and will save the new home owner money so they should take on the remaining debt.

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  4. nic says:

    So any new news on this San Diego subsidized solar system???? where can I find more info?

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