My wife and I, like other homeowners, have often thought about making significant investments in the construction of renewable energy and water conservation improvements to our home. Federal and state tax credits make this large up-front investment somewhat more affordable. Lower energy and water bills will eventually exceed the up-front and maintenance costs of the distributed energy and conservation improvements. Despite the subsidies, this might take awhile. Many homeowners who aren’t completely sure whether they will be living in the home for at least 7, 10 or 15 years — the break-even point on some of these improvements – will not make large personal financial outlays in renewable energy and water conservation improvements if there is a risk of losing money.
Recently enacted legislation, AB 811 of 2008, may change this financial calculation in a positive way. The new law allows local governments to establish loan programs to enable property owners to finance the installation of renewable energy and water conservation improvements on existing residential, commercial and industrial property and pay it back each year on their property tax bill. Examples of eligible improvements include high efficiency heating and air conditioning, windows and insulation, geo-exchange heat pumps, solar fuel cells, low-flow water devices, rain cisterns, smart irrigation systems and electronic vehicle plug-in stations.
The AB 811 program is financed through up-front loans from the county investment fund, potential federal and state grants, the sale of bonds, and assessment liens to be paid back on the annual property tax bill. The lien stays on the property after the sale of the property and is the responsibility of the new owner. Most of the renewable energy and water conservation improvements wouldn’t trigger a property tax re-assessment.
Placer County is taking the lead in making this voluntary program available to local property owners. Jenine Windeshausen, the Placer County Treasurer-Tax Collector, made an interesting and comprehensive presentation on the AB 811 program – to be called Placer mPower – to the Auburn City Council on November 9. She noted that the program can help create new jobs, bring additional federal and state funds to our county, reduce energy and water bills for property owners and achieve greenhouse gas reduction credits for the county. She hopes to have the program up and running early next year.
Has the AB 811 program worked elsewhere in the state? According to information presented by Ms. Windeshausen, the program has been successfully implemented in Palm Desert, Berkeley and Sonoma County. In Palm Desert and Sonoma County the assessment interest rate is 7%. In Palm Desert, the program sold out in only three weeks. Ms. Windeshausen is modeling the proposed Placer mPower program on the program in Sonoma County, which receives 30-40 applications per week or about $1 million in requests. That’s very impressive. Like Placer County, many other cities and counties in California are now getting their AB 811 programs underway.