Solar Legislation Would Lift Restrictions

Legislation to further promote photovoltaic rooftops by enhancing net metering payments was introduced this week. It comes on the heels of a bill passed by the Assembly to allow homeowners to finance systems with city loans repaid through property taxes. AB 1920 by Assemblymember Jared Huffman (D-San Rafael) would require utilities to make payments to those who install solar systems and send excess power back to the grid. “Right now, if you own a solar system, the best you can get is a ‘zero’ energy bill,” said Bernadette Del Chiaro, clean energy advocate for Environment California, which is backing the measure. “This bill would change that, allowing the solar customer to literally get a check at the end of the year.” The measure, introduced February 12, also would lift the current size restrictions on subsidized solar and other systems. They are supposed to be sized to accommodate the energy demands of the home or business to avoid spinning the meter backwards. Under AB 1920, installation of solar systems that exceed what’s needed to meet the demands of the premise would be allowed. However, the subsidy would be limited, covering only the part that satisfies onsite energy use. To make California “the Saudi Arabia of the sun, we have to remove all barriers to going solar,” Del Chiaro noted. Huffman’s bill would apply not only to solar energy systems, but to other renewable energy systems installed on utility customer premises, including small wind, fuel cells, and small-scale geothermal. Meanwhile, a February 6 Lawrence Berkeley Laboratory analysis cautions that home and business owners who use city loans envisioned in AB 811, authored by Assemblymember Lloyd Levine (D-Van Nuys), to finance solar rooftops may lose out on a federal investment tax credit. Levine’s bill, which is being considered in the state Senate, is modeled after a plan being developed by the City of Berkeley. Under that program, the city would borrow money by issuing bonds and in turn loan the money to home and business owners to install solar rooftops. Those loans would be assessed to owners’ property taxes and paid back along with regular tax payments. Currently, authority to establish such a program is limited to charter cities. Levine’s bill seeks to give all cities the authority to put such solar financing programs in place. The lawmaker reasons that doing so would advance the California Solar Initiative, which aims to see 3,000 MW of solar capacity installed by 2017, by making it easier for home and business owners to pay the upfront costs of solar systems. However, Mark Bolinger, Lawrence Berkeley Laboratory manager, noted a potential weakness in the financing approach. He said that the federal Internal Revenue Service could consider such loans as “subsidized energy financing.” If so, property owners who rely on the city loans could become ineligible for the existing $2,000 federal investment tax credit for solar rooftops. “That’s a significant chunk of change,” said Bolinger. Businesses can get an even larger tax credit, he noted. Bolinger suggested that backers of the property tax financing plan seek IRS guidance on whether it would disqualify homeowners from taking advantage of the federal tax credit. It could take the IRS over a year to rule on the issue.

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Solar Legislation Would Lift Restrictions

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