Under the leadership of Mayor Gavin Newsom, The City’s energy spending has been redirected from efficiency programs for public buildings to incentives for private renewable projects.
Private solar panel installations more than doubled in San Francisco after The City began doling out millions of dollars in public subsidies from a fund created to slash municipal power use.
Since mid-2008, the GoSolarSF program has provided rebates in excess of $10,000 to some homeowners, private businesses and other applicants to help subsidize solar panel installation costs. It’s credited by industry members, environmentalists and city officials with driving strong growth in the number of solar panels in San Francisco.
GoSolarSF sparked The City’s transition from a solar power laggard into a leader, with its residential per capita solar generation capacity exceeded in California only by Los Angeles County. But the spending spree comes with a trade-off: The $15 million being poured into privately owned panels could have been spent on energy-efficiency projects to reduce the costs and climate changing emissions caused by the use of electricity by San Francisco’s departments and services.
There are at least 1,720 solar panel installations in San Francisco that could collectively create 9 megawatts of electricity, San Francisco Department of the Environment figures show. There were fewer than 700 installations when GoSolarSF was proposed by Mayor Gavin Newsom in late 2007.
After industry members and environmentalists lobbied recently against the imminent demise of GoSolarSF, which had burned through nearly all of its $9.5 million allocation, Newsom used his State of The City address to announce an injection of $5.5 million in additional funds to save the program.
“We’ve put together the largest incentive program of its kind in America,” Newsom said during the Jan. 14 address. “As a consequence, we now are the leader of any large urban city in the state of California in per capita solar generation.”
The GoSolarSF handouts continue an energy-spending trend started in Newsom’s early days as mayor, when he began shifting spending away from energy-efficiency measures, such as the insulation of buildings, in favor of solar power and other renewable-energy-generation projects.
Spending money on energy-efficiency projects is a less ostentatious but more effective way of reducing fossil fuel energy use, compared to spending the same amount on renewable energy projects. Consulting giant McKinsey & Co. found last year that reducing carbon dioxide emissions by investing in solar or wind energy can be at least three times more costly on a per-ton basis than switching to efficient lights or appliances.
Newsom spokesman Tony Winnicker acknowledged that the benefits of energy-efficiency spending outweigh those of renewable-energy projects, but he said grants and other new sources of funding are helping The City reduce its energy use. For example, the federal stimulus program provided roughly $7 million last year to help weatherize city-owned buildings, Winnicker said.
“Now we can target the [San Francisco Public Utilities Commission] resources towards solar,” he said. “We don’t feel like there’s been a decrease overall in The City’s efforts to increase energy efficiency.”
Funding for GoSolarSF comes from an account that has been replenished from the sale of hydroelectric power generated by the SFPUC at its Hetch Hetchy Reservoir in Yosemite National Park.
The account was created by Mayor Willie Brown in response to the 2000 energy crisis. Account spending grew quickly, and more than $11 million was spent during the 2002-03 fiscal year, with three-fourths going toward energy-conservation measures to help The City reduce its electricity use, SFPUC figures show.
One year later, 92 percent of the account’s $7.9 million in spending went to energy-conservation measures.
Following his election in late 2003, Newsom quickly changed the focus of the account.
In the 2004–05 fiscal year, Newsom began shunning energy-conservation spending in favor of efforts to produce renewable energy through programs such as the installation of solar panels on a water treatment plant.
To secure $3 million for a GoSolarSF pilot program, Newsom privatized a planned project to install solar panels at a southern-waterfront recycling center.
Instead of paying for the panels and then using the electricity, The City leased rooftop space to a private company, which now sells power produced at the site back to San Francisco.
The Board of Supervisors voted to support the program after it was amended to ensure local hiring and greater payments to low-income applicants and residents of The City’s most environmentally impacted
GoSolarSF helped foster a local solar power industry by creating work opportunities for installers, according to Jeanine Cotter, founder of local company Luminalt.
A 5-megawatt solar power plant planned to be built by October on the Sunset Reservoir will be financed through a similar arrangement, which is called a power-purchase agreement. Such financing arrangements allow The City to take advantage of federal tax incentives that are not available for municipalities, which do not pay federal taxes.
For the 2010–11 fiscal year, Newsom proposes spending a record $17.1 million of the account. Of the two-thirds that would go toward renewable-energy-generation projects, $5 million will be spent on GoSolarSF, SFPUC budget documents show.
Insulation may be part of financing
San Francisco property owners hoping to take advantage of a unique means of financing the installation of solar panels may be required to invest in insulation, too.
The program could disburse private capital as loans to property owners as soon as March, mayoral spokesman Tony Winnicker said.
The loans could be used for a wide array of energy- and water-related improvements, including low-flow shower heads, solar panels and residential wind turbines.
The loans would be repaid using savings the improvements helped generate.
Some property owners will be required to use part of the loan to improve their building’s energy efficiency, according to Winnicker.