Municipal property assessment financing for solar and energy efficiency 14

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1. 

   Jon Rynn Posted 1:00 pm
   09 Oct 2008

   Adam, are programs like Berkeley'sbeing affected by the financial meltdown, or are they fairly immune?  In which case, might municipal and other government entities become a lender of last resort for renewable projects?

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2. 

   MAD MAC Posted 4:58 pm
   09 Oct 2008

   Jon, lending is the problem!What people and governments need to start doing, and should have been doing all along, is investing with capital that they HAD ON HAND. Not borrowing money so they can make an investment and pay it back latter. That's OK SOMETIMES, it should not be the norm. EVERYONE and EVERY INSTITUTION should not be running around with a boatload of debt.
   
   Victory in Pattani

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3. 

   amazingdrx Posted 12:04 am
   10 Oct 2008

   A web of international debtAnd ownership is the problem MAC.
   If a chinese corporation, that is investing in brazillian paper production, owns the local paper mill here, and the regional company that used to own the paper mill, now holds shares in that chinese corporation; what happens to the local community whose economy depends on that paper mill?
   It crashes when the paper production is moved to the lower cost brazillian location.
   That is what has happened to the real economy, that used to feed the fake, electronically traded global/wall street economy.
   Oil was bubbled up to three times its value by the fakery, so was the DOW and other market indices.  Once central bankers, corporate execs,  and world leaders became the same class of people with the same interests, those interests were served.
   At the expense of the real people in the real economy.
   This globalization of property rights was supposed to hedge all our risks, all of US little people, in local communities, would be protected.  By spreading the inbestments that protect our standard of living worldwide, we were to be provided protection from any sort of local catastrophe.
   But we the people are running out of investments, we have 41 trillion in debt now.  Spread all over that global electronically traded, unregulated global economic system now.  And we borrow more for every drop of oil we use.
   Why does a foreign corporation own your local manufacruting plant, chain store, or mine?  Because that removes any control or regulation over those assets from local/government determination.
   For instance, the chinese state oil corporation is buying up the rights to canadian tar sands.  Justices like Alito and Roberts were primarily lawyers for corporations, that is why they were appointed.  When economic/enviromental  disputes go to court now, to the highest court, will it always rule in favor of the rights of corporate citizens?
   
   http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

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4. 

   Jon Rynn Posted 12:55 am
   10 Oct 2008

   Mad Mac --When the government creates more debt that is very direct -- that is, it invests in something that has a pretty much guaranteed rate of return, as in the Berkeley case, because it's based on something physical, the savings you get from lower electricity bills, because the thing that is doing that, the solar panels, actually produce electricity -- then the debt is called investment, or maybe we should have a new term, real investment, as opposed to investing in indirect investments like financial instruments.
   My question is, does Berkeley have to borrow money in order to lend the money to put up the solar panels, or do they pay for it out of tax receipts?  Because if it's from taxes, then there's really not much debt -- Berkeley is buying the solar panels, effectively, and the owner is paying them back, as opposed to the owner having new debt and Berkeley having new debt.

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5. 

   archigeek Posted 1:19 am
   10 Oct 2008

   An amendment, Mr. MAC... ^^^I think you should amend that last statement to include this line: "...which hasn't been budgeted to include enough funds, in good times and lean, to pay off the note or bonds." I don't think debt is necessary a bad thing. I have debt--our house and that's all--but it is a manageable sum and we can even pay it off in ca. 14yrs. if we continue to put an additional 150USD per month of principle in each payment. Otherwise, I think your comment is a point well-made.
   
   The mellotron is your friend.

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6. 

   Russ Posted 2:02 am
   10 Oct 2008

   Jon-Although I don't know for sure, I'd be very surprised if they don't use debt. I haven't heard of any American government at any level which balances its budget.
   Especially where it comes to lending money - there everyone always thinks, since I'm not getting the enjoyment of it right now, but only later, I might as well borrow what I'm going to lend since I won't have to pay that back until later as well. Any cash I actually have in hand, I'm going to spend on something I can use up right now.

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7. 

   Russ Posted 2:06 am
   10 Oct 2008

   correctionWhere I said "balances budget" I should've said doesn't incur debt.
   I'm sure lots of heavily indebted entities have balanced books.

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8. 

   ciscodv Posted 3:34 am
   10 Oct 2008

   Financing ResponseI have been involved in the Berkeley program and with helping other cities replicate it and can take a stab at answering some of the questions raised.
   The FIRST program uses a type of municipal revenue bond.  For each property, a small bond is sold to cover the upfront cost of the system and then a line item is added to the property owners tax bill to repay the cost, plus interest, over 20 years.  
   There is no "general obligation" of the city -- the revenue from the property tax line item is the security for the bond.  (This is standard in muni finance.)
   This program is basically self-funding, meaning it creates the funding it needs to operate through its own financing.  So there is no debt that counts against the City's debt limit, impacts its credit rating, or otherwise creates a direct liability to the City's general fund.
   A FAQ prepared by a team at UC Berkeley is here:
   
   http://www.renewfund.com/cityfirst/faqs
   The program is dependent on willing buyers in the municipal bond market.  As a practical matter, the crisis makes the program somewhat more expensive.  Bond buyers are requiring higher interest rates and that translates to a higher interest rate for program participants.   Lower rates are, of course, better.  But the program is still quite helpful and viable at a higher rate.

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9. 

   Adam Browning Posted 3:43 am
   10 Oct 2008

   thanks, ciscojon, i hope that answers your question.  
   
   Get Some Sun: http://www.votesolar.org

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10. 

    Jon Rynn Posted 3:44 am
    10 Oct 2008

    Thanks, ciscodv!

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11. 

    stopgreenpath Posted 4:56 am
    10 Oct 2008

    AB 811 for all of CaliforniaCA passed AB 811 in 2008, which allows ALL MUNICIPALITIES AND ALL COUNTIES IN CALIFORNIA to access the property tax system for this type of program. as noted, they are usually financed by muni bonds, and the best thing?  the repayment attaches to the property so there is no need to repay the loan out of sales proceeds.  
    what might ACTUALLY be the best thing, although i haven't confirmed it, is that the re-payments are tax deductible, as they are part of the property taxes paid.  can anyone confirm?
    What is needed is ENORMOUS PRESSURE TO BE PUT ON THESE GOVERNMENTS to drum up the money for these loans.  we are going to be completely overrun with super destructive, wasteful, monopolistic power plants and transmission lines soon if we don't get our power from our own roofs!  would you rather kill off Joshua Tree or get paid for producing your own power?
    call your county and city reps today in CA and DEMAND funding for the AB 811 program...
    btw, the totally unfair $2,000 federal tax credit cap was lifted for 2009, so we gotta get our systems up and running asap, before another Big Energy hijacking of the wind and solar resources...
    
    the greenest energy is that which you needn't ever produce.

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12. 

    stopgreenpath Posted 4:56 am
    10 Oct 2008

    AB 811 for all of CaliforniaCA passed AB 811 in 2008, which allows ALL MUNICIPALITIES AND ALL COUNTIES IN CALIFORNIA to access the property tax system for this type of program. as noted, they are usually financed by muni bonds, and the best thing?  the repayment attaches to the property so there is no need to repay the loan out of sales proceeds.  
    what might ACTUALLY be the best thing, although i haven't confirmed it, is that the re-payments are tax deductible, as they are part of the property taxes paid.  can anyone confirm?
    What is needed is ENORMOUS PRESSURE TO BE PUT ON THESE GOVERNMENTS to drum up the money for these loans.  we are going to be completely overrun with super destructive, wasteful, monopolistic power plants and transmission lines soon if we don't get our power from our own roofs!  would you rather kill off Joshua Tree or get paid for producing your own power?
    call your county and city reps today in CA and DEMAND funding for the AB 811 program...
    btw, the totally unfair $2,000 federal tax credit cap was lifted for 2009, so we gotta get our systems up and running asap, before another Big Energy hijacking of the wind and solar resources...
    
    the greenest energy is that which you needn't ever produce.

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13. 

    GreyFlcn Posted 7:45 am
    10 Oct 2008

    re: stopgreenpathJust like to mention,
    
    It gets rather annoying when you make the fake argument that solar panels can provide baseload, and would therefore remove the need for transmission.
    Just thought you'd like to know why noone takes you seriously.
    _
    Try getting yourself some real solutions.
    
    -David Ahlport

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14. 

    kyotousa Posted 6:56 am
    13 Oct 2008

    city financed solar hot waterThe City of Santa Cruz is working on its own version of Berkeley FIRST - municipal financing for solar hot water. Systems will be paid for via the resident's water bill. Shorter payoff, big savings.
    
    Tom Kelly

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