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San Antonio's woulda-been-groundbreaking solar PACE program on the rocks

March 09, 2010

Greg Harman
QueBlog - San Antonio Current

Thirty-nine percent of San Antonians are ready to install solar panels and solar hot-water heaters on their rooftops, according to a survey performed last year for the non-profit clean-energy-advocating Solar San Antonio. That is, they're ready to go solar if they could afford it.

Even with the on-and-off-again solar rebates offered through City-owned CPS Energy (now on again), solar remains a game largely reserved for wealthier greens. Homeowners must shell out thousands of dollars for even the smallest rooftop arrays, a daunting challenge in very un-affluent San Antonio. However, a bill carried through the Texas Legislature last year promised to eliminate all up-front costs by allowing Texas cities to float the loans themselves, receive payment through the accumulated energy savings realized, and lighten the load on homeowners by tying the loan to the property itself rather than to the individual.

Loans would be offered not only for the installation of solar panels, but also for solar hot-water heaters, geothermal systems, reflective roofs, and a variety of energy-conserving home improvements.

Leaders in several Texas cities began hammering out the fine print necessary to breathe life into San Antonio state Representative Mike Villarreal's broadly worded House Bill 1937 the only renewable-energy legislation to slip through the 81st Legislature thanks to Perry's Voter ID kerfluffle. Members of San Antonio's PACE (Property Assessed Clean Energy) Task Force started meeting way back in August.

This month, PACE based on programs operating in Berkeley, California, and Boulder, Colorado appears to have become another victim of the housing and financial crises.

According to Lanny Sinkin, executive director at Solar SA, members of the city's bond council wanted to establish liens to ensure the PACE loans were paid off before the home's mortgage, something that appears to run contrary to Texas real estate law.

Laurence Doxsey, director of the City's Office of Environmental Policy, said the inability to tie the loan to the front of a mortgage so that it is required to be paid back first makes securing the backing of the bond market unlikely.

"That doesn't give us the position we need to get a good interest rate," said Doxsey. "If we go to the bond market and try to sell this idea, they'll say, 'That looks pretty risky to me.' You know, the way the real estate market is and the way people are losing work, we could be stuck with something here."

In the event of a foreclosure, it would be harder to recoup home-improvement costs and reclaim the value of the installation.

While city staff continues evaluating options, Doxsey said salvaging the program will likely take a return to the state Legislature to work out the apparent conflict with other state laws or require loan guarantees to be issued by the federal government, a route now being pursued.

Despite the serious problems grounding this highly anticipated program, Sinkin remains upbeat.

"One of the things it has done is inspire creative thinking," he said. "If that model is not going to be the thing that works, how can we do something similar that offers people the opportunity to get rid of the up-front cost in a low-interest, long-term loan fashion of some kind."

To that end, Solar San Antonio will host a roundtable with local bankers on May 18, a couple weeks after this year's Solar Fest, to explore ways the financial institutions could meet federal pressures to open up the taps on new loans and create renewable-energy opportunities.

"We've got ourselves running around chasing our tail in some ways," Doxsey said, "and then also have these distinct issues that need to be solved to make this function right."

Meanwhile, as the coal kings at TXU rolled out a solar leasing program with no up-front costs and free installation in North Texas, national and state-level solar outfitters are on the prowl in San Antonio as solar costs continue to drop, hoping to cut costs further through community-level co-ops and by sweetening the pot with additional rebates.

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