Newsom's Sunshineless SolarMayor Gavin Newsom wants to be known as the Green Mayor. But he could go down in history as the mayor who secretly diverted public money from large municipally owned solar installations to subsidize privately owned solar panels.
Since January, Newsom has tried to kick start two questionably financed solar programs.
The first plan involved raiding $50 million from a seismic safety loan fund. That idea got shelved in the New Year, when the Board of Supervisors asked why these funds couldn’t be used to seismically retrofit affordable housing units, rather than subsidize private solar installations?
The second plan is involved diverting $3 million from the Mayor’s Energy Conservation Account, which was set up in 2001 to increase energy efficiency and reduce cost of energy use.
Since then, $39 million has been allocated to MECA with $10 million allocated in the current fiscal year, 2007-2008.
These monies come from the General Fund and are under the purview of the San Francisco Public Utilities Commission.
Deputy Controller Monique Zmuda says so far all projects funded by MECA have benefited city facilities and PUC facilities.
“These funds have not been used to my knowledge to subsidize or loan funds to privately owned energy conservation projects,” Zmuda told the Guardian.
MECA funded projects include solar panels at Moscone, the replacement of refrigerators at the San Francisco Housing Authority, solar projects at MUNI, a new heating system at the central plant of San Francisco General Hospital, Solar projects at San Francisco Airport, a Solar project at North Point, and Port Energy Efficiency.
But under the Mayor’s Solar Energy Incentive Program, these public monies would be used to help subsidize the installation of solar panels on privately owned buildings and homes.The program places a $10,000 cap on the subsidizing of solar on private property.
Barbara Hale, SFPUC’s general manager of power, says Newsom’s solar pilot would be funded with $3 million in funds earmarked to pay for the installation of solar panels at Pier 96.
At an April 2 hearing, Hale told the Board of Supervisor’s budget committee that the SFPUC released a new bid proposal in February to lease space at Pier 96.
Under the bid, a private company would install solar panels at Pier 96 and sell the energy back to the City, Hale said.
Sup. Jake McGoldrick said he believes the Mayor’s Energy Conservation Account is better suited for municipalprojects.
"In ten years, there could be $50 million in the fund,” McGoldrick said. “That's a lot of money, and it's power the city could own.”
MCGoldrick objected to what he calls "Newsom's switching of funds from public to private uses, without telling the Board."
And Sup. Chris Daly expressed concern that the Mayor's solar incentive plan will end up subsidizing people who plan to convert to solar anyway, making it an inappropriate use of the public’s tax dollars.
"We should aggressively pursue more municipal projects." Daly said. "I would support this program, if we were running out of municipal projects, but we're not".
Barbara Hale, Deputy Manager of the SF PUC’s Power Enterprise said power purchase agreements are used for most municipal projects, and that the City doesn’t qualify for state rebates.
"The pilot rebate would be a very simple process [for customers], whereas the state program is a quarter- inch packet,” Hale said.
Wade Crowfoot, Newsom's new climate change initiatives' director, told the hearing that the solar incentive pilot program would “provide initial information and feedback that would inform us on the long term implementations.”
"We're open minded about securing some of the funds to low-income residents,” Crowfoot added.
Joseph Bryant of the A. Philip Randolph Institute claimed the pilot, ” would stimulate jobs, not only in San Francisco, but also in Bayview Hunters Point.”
Solar City CEO, Mr. Rive said, "I want to build a training academy in Hunters Point, if this program doesn’t go through, I will have to go to San Jose,"
"We'd hire locally" added Rive.
Jeanine Cotter of Luminalt Solar observed that, “SF is dead last [in solar power] among the Bay Area counties.”
But McGoldrick replied that, "One reason why other counties have better solar projects is because San Francisco is 70 percent tenant occupied. We don’t see those number in Marin or Napa."
McGoldrick suggested the MECA funds would be better used for advertising to stimulate more solar usage.
But Polly Shaw of SunTech America pointed out that the state “already has $6 million to promote solar energy.”
A 2 kilowatt rooftop solar panel installation costs about $20,000.
Federal and state tax rebates subsidize those costs by $6,000.
The SFPUC solar incentive program cuts a further $3,000 from the price, plus an additional $1,000 if local workers are hired, and an additional $1,000 if the panels are installed in environmental justice zones in the City’s southeast.
In other words, a private property owner could receive a total of $12,000 in solar subsidies.
Newsom spokesperson Nathan Ballard reportedly told the Examiner that Sup. McGoldrick is holding up the program “unnecessarily” and that voters will approve the program, if it goes to ballot.
Asked to clarify, Ballard emailed, "Yes, the supervisor should stop holding up the solar program. I am confident that he will do the right thing."
But the truth is that Newsom, along with Assessor-Recorder Phil Ting submitted a signed solar initiative for the June ballot only to withdraw it this March, after Sierra Club chair Becky Evans wrote to all the above parties "to correct the inaccurate perception that the Sierra CLub has endorsed the Mayor and the Assessor-Recorder's Solar incentive program."
Evans letter, sent March 3, 2008, clarified that the Sierra Club had discussed the proposed legislation, but had not yet taken a position.
"Historically, the Club has supported solar incentive programs in general: in this case, we have concerns regarding the potential effect of this proposal on the City's plan to implement Community Choice Aggregation."
Evans also alluded to how "apparently, an anonymous caller purporting to be from the Sierra Club left a message with a supervisor that the Club supported the measure."
No such call was authorized by the Executive Committee of the Sierra Club's San Francisco Regional Group to either make such a call or representation, according to Evans.
Since then, the Sierra Club has heard more analysis and is reportedly warming up to the Mayor's pilot program, while anxious that his administration remain focused on San Francisco's more comprehensive energy plan, Community Choice Aggregation, which is way behind schedule.
Meanwhile, McGoldrick and Daly are set on proposing their own ballot initiative this fall to require tsolar subsidies to be restricted to installing panels on municipally-owned buildings, at least while suitable sites remain available.
" It’s easy for the Newsom administration to take a lot of credit for a big energy initiative, while expanding their fund raising base," Daly told the Guardian. "But I feel strongly that as long as opportunities for large municipal installations and conservation remains, that’s what we should use MECA funds for."
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Comments (5)
Mayor's Solar Plan: Unlimited Subsidy To Private Corporations
In your report you state that the Mayor's solar plan caps the public subsidy for solar panels on commercial projects at $10,000. However, on closer reading, note that the plan also allows the San Francisco Public Utilities Commission staff to completely waive that cap.
This means that Lennar corporation is not only poised to build us a completely unnecessary new stadium, wasting our land and tax dollars. But under the Mayor's solar plan, Lennar could also deck out that stadium with millions of dollars of solar panels and stick San Franciscans for the bill!
Let's make sure that pubic money goes to public solar projects. I urge our city officials to scrap the Mayor's plan and fully support the Community Choice renewable energy project, which is set to go out for bids this year, and will bring 50% publicly owned solar and wind power to San Francisco within the next decade.
Posted by Eric Brooks | April 5, 2008 01:11 PM
I am a San Francisco homeowner who is currently installing photovoltaic panels and solar water heating on my home. My family is middle class, barely getting by in this expensive city, yet we borrowed money to do these projects because we want to do the right thing about the environment and reduce our carbon footprint. It would be a great help to get these rebates from the City. The number of homes with solar in San Francisco is quite small compared to many other municipalities. Many more city residents and businesses would get solar if these incentives were passed. The public money for the project would increase the spending of individuals to install solar-- so the public funds would leverage much more investment in solar on the part of individuals and businesses. I hope the supervisors find some way to fund an incentive program. It would result in a reduction of greenhouse gas emissions within months and give a boost to the solar industry in San Francisco, and create great green jobs for local residents.
Posted by Nan Foster | April 7, 2008 09:56 AM
Public Project, Unlike Mayor's, Can Give Home Owners Solar Panels For Free.
Nan and all,
What the Mayor isn't telling everyone is that the Community Choice renewable energy project, which is set to get underway this year, will be able to give home and business owners solar panels for free. This is because the City would own the panels through purchasing them with revenue bonds. The City can afford to do this because over time solar panels pay themselves off with free energy from the sun.
The Mayor's program could harm the possibilities of this much bigger and better Community Choice project getting off the ground because it could take large amounts of solar away from the public project and give it to private owners. This means that the Community Choice project would not be able to get those critical public revenues.
Furthermore, because the Community Choice project will be buying large amounts of solar panels all at once for multiple locations and residents, we will be able to get much better deals on panels by buying them in bulk.
Because of such public benefits, Community Choice will bring San Francisco 50% solar and wind power in the next decade. At best, the Mayor's plan would give us 2% solar over that same decade. And, if it hinders and slows down Community Choice, as is likely, it will actually result in -less- solar, not more.
Let's focus on the Community Choice project so we can generate enough renewable energy soon enough to truly help halt global warming. (Renewable energy owned by the public, not by large corporations getting a free deal from the Mayor.)
Posted by Eric Brooks | April 7, 2008 11:35 AM
I am going to respond because I was the former staff manager the state (CPUC) solar rebate program and advised the SF Solar Task Force in that capacity.
- “Secretly diverted public money”? The program has been in development with a wide range of stakeholders since early 2007, and was announced to the public repeatedly in December 2007 and again in early 2008.
The $3 million pilot absolutely is in the public interest: According to SFPUC analysis, it leverages at least 6-8 times more MW than the SFPUC can buy for its own buildings, due to a 2006 change in law on the state rebate money where the city can no longer access state subsidies for its facilities. SFPUC can buy far more MW through new power purchase agreements than using the MECA funds to pay for 100% of each system up front. The more MW we get, the more we can avoid a new peaker plant in the poorer neighborhoods. The more MW we get, the closer we get to reducing our greenhouse gas emissions.
- “Questionably financed solar programs”? The MECA funds were established for the very purpose of building locally-sited clean, reliable energy, which is exactly what these solar incentives do.
Moreover, you get two for one: energy efficiency and solar. Solar is an important “lead generator” for energy efficiency, in that it’s the enticing carrot to get at a lot of commercial and residential buildings that don’t enroll in energy efficiency programs. The SF incentives require applicants to sign up for the state solar program. That state program requires a range of energy efficiency audits and measures.
Curiously, the blog fails to discuss a major value of the proposed solar incentives: helping lower-income neighbors. A swath of San Franciscans will be ineligible for the state solar low-income rebate because of the nature of their housing assistance, yet they will not have the means for the mainstream state rebates. These local incentives are designed with a higher value for environmental justice neighborhoods, and doing so begets an energy efficiency audit that can help the homeowner access efficiency programs and assistance. Why take away the only incentives they may be eligible for that will help them bring down their energy bills?
Finally, state rebates decline in tandem with demand from elsewhere in PG&E’s territory. By the time the city gets around to CCAs, the state rebates will be so low that only the richest San Franciscans will be able to partake of the program.
With the hold-up, San Francisco is losing credibility right now for anything it purports to want to do on clean energy or community energy.
Posted by Polly Shaw | April 7, 2008 01:26 PM
The last poster doesn't seem to understand that solar at all costs is too costly. Right now, given the City's budget situation and the many other programs out there (and the reality of San Francisco's climate that many seem to be avoiding here - it isn't the most conducive to optimal solar PV performance), this outlay needs to be fully cooked first - then implemented. You don't automatically get energy efficiency with installation fo solar panels, and especially for lower income tenants, spreading money to energy efficiency, reducing their demand without a huge upfront investment - is more often the prudent and first choice before large capital outlays.
I recognize the last poster in now running public relations for a large solar company trying to sell products in SF and elsewhere, and good for you guys -but San Francisco needs to do what is fiscally prudent and most cost-effective - not what is flashiest or the technology of the moment.
Posted by Jack Morgan | May 30, 2008 02:46 PM