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The California Energy Commission pulled its funding for PACE on Wednesday, a result of a ruling against the popular lending program by the Federal Housing Finance Agency (FHFA). Earlier this month, the FHFA issued guidelines for Fannie Mae and Freddie Mac, the nation’s two largest mortgage lenders, stating that PACE programs could not take precedence over primary mortgages. That dispute has effectively killed PACE financing for the time being.

Property Assessed Clean Energy programs tie loans for renewable energy and home energy efficiency upgrades to property, and are then paid off through a voluntary increase in property taxes. 21 states have already signed legislation enabling PACE programs. The PACE model was invented in Berkeley, California to worldwide approval and now, in its home state, we see PACE’s life strings begin to unravel.

On Wednesday the CEC pulled $30 million in federal stimulus money it was using to fund PACE programs in five California counties, reports the New York Times. Those programs would have created 4,400 jobs and offset 187,000 tons of carbon dioxide emissions through 2012. In 2009, PACE in California was even expanded to cover water efficiency improvements.

California’s Attorney General (and gubernatorial candidate) Jerry Brown filed a lawsuit against the FHFA two weeks ago in an attempt to save PACE, and a group of representatives in Congress have introduced legislation that would at least temporarily override the FHFA.

Yet while PACE broils in controversy, valuable energy retrofit funding goes unused, and federal stimulus dollars come with an expiration date.

The state of California is by no means happy to cut funding. “FHFA’s and [Office of the Comptroller of the Currency's] recent direction flies in the face of over a century of lawful priority lien tax assessments issued by local governments to finance public benefits,” the CEC paper explaining its decision says.

At its next meeting on August 6th, the CEC will evaluate other ways to fund home retrofits in California.

Governor Schwarzenegger’s California Recovery Task Force has written the CEC asking for full reallocation of the PACE funding by September 30, 2010.

Via NY Times
Photo Credit: Solar Universe

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Majority Leader Harry Reid (D-NV) released details of the energy bill he is putting before the Senate on Tuesday, making it official that any hope for a national renewable electricity standard (RES) is dead. Last week Reid said as much while foreshadowing the contents of his bill, which focuses more on oil spill response than renewable energy. Since then, dozens of democratic senators (including one republican) and industry groups pressed Reid for, at the least, inclusion of a national RES to promote a shift to cleaner power over the long term.

For at least the short term, any RES prospect has been declared dead by the one man who could have given it life.

To make matters worse, the bill excludes just about everything else that could really help the renewable energy industry, especially the troubled wind sector, which has seen quarterly figures drop 71 percent from the same time last year.

NOT included are:

• A national RES
• Extension of the production tax credit (expires next year)
• Extension of the Treasury Grant Program (expires this year)
• Any cap or tax on carbon emissions by polluters

What the bill does offer:

• Oil Regulations: A removal of the $75 million cap on economic liability that oil companies must account for in response to an oil spill. Companies would pay higher fees into the Oil Spill Liability Trust Fund. It would also speed up the claims process for people damaged by oil spills and overhaul government regulation to ensure that conflicts of interest do not exist.
• Energy Efficiency: The bill would set aside $5 billion for the proposed federal Home Star rebate program that incentivizes homeowners to make energy efficiency improvements.
• Conservation: The bill would also fully fund the Land and Water Conservation Fund, which uses a portion of receipts from oil and gas leases to support state and local conservation programs.
• Electric and Natural Gas Vehicles: Encourages the deployment of electric cars through $400 million doled out to certain cities. Also funds a federally-run competition to develop a battery that will power an EV for 500 miles in a single charge, and encourages federal agencies to introduce EVs into their operating fleets. Finally,  the bill offers incentives to retrofit heavy-duty vehicles to run on “clean natural gas” (CNG).

The oil industry is railing against the bill, which means it must be doing something right. Yet while incentives for electric vehicles, increased oil regulation (so obviously lacking in the lead up to the BP spill) and energy efficiency incentives are good steps, this can hardly be called an energy bill — at least not in the sense that the renewable energy industry, President Obama, nor any environmental advocate had hoped for.

Harry Reid and other Senate Democrats admit that the bill is far from sweeping, but claim that it’s the best they can do without a guaranteed, filibuster-proof 60 votes — something Reid says they most certainly do not have. And even this gutted sham of a climate change bill faces stiff opposition from republicans, whose main objective seems to be to oppose anything and everything until the GOP has a chance at regaining power in November. Although, they apparently have all the power they need already, or at least enough to stop the less-than-brave democrats tiptoeing around the Senate floor and all over the progress-minded constituents that voted them in nearly two years ago.

And where’s President Obama on all this? Good question.

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Property Assessed Clean Energy (PACE) was set for a booming takeoff. At least 22 states officially signed on in support. The popular financing program was first successful in Berkeley, where it originated as a means to promote home solar power. But then, everything came to a screeching halt when Fannie Mae and Freddie Mac suddenly laid siege to the popular financing program by forbidding homeowners to participate.

Taken aback, municipalities have frozen their PACE programs and a virtual tsunami has torn through the building and greentech industries. Even pleas from the Obama administration fell on deaf ears. But now somebody has begun the fight to win PACE back. California Attorney General Jerry Brown, who is also a candidate for governor, is suing Fannie Mae and Freddie Mac.

His claim is that the move by the two quasi-governmental lenders and their regulator, the Federal Housing Finance Agency (FHFA), violates California’s law authorizing the locally administered PACE programs. Brown asserts that the FHFA’s guidelines restricting homeowner participation is “severely hampering California’s efforts to assist thousands of California homeowners to reduce their energy and water use, help drive the state’s green economy, and create significant numbers of skilled, stable and well-paying jobs.”

Indeed, PACE is widely accepted as a viable means of achieving improved home efficiency and increased use of renewable energy on a national scale, with the Obama administration doling out $150 million of stimulus funding in support thus far. PACE programs allow property owners to borrow money from their city or county for energy efficiency or renewable energy upgrades and then pay them back through a voluntary increase in property taxes.

In addition to its violation of California law, Jerry Brown’s lawsuit also alleges that the FHFA violated federal law by not conducting an environmental impact review as to the effect of its lender guidelines. By enacting the restrictions, the lawsuit states, Fannie Mae and Freddie Mac have “deprived California and its citizens of the associated residential energy and water efficiency and renewable energy benefits, thereby significantly impacting the human environment.”

Jerry Brown is the first to strike back at the FHFA and the two private lenders, but he will very likely not be the last. The town of Babylon, New York is also threatening legal action, according to Grist, and Sonoma County, CA has opted to reopen its program with or without Fannie or Freddie’s approval. Still, some 200 PACE programs have been frozen in the wake of the FHFA’s announcement earlier this month.

Via New York Times
Photo Credit: Political Lunacy & SF Citizen

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Sometimes, the best laid plans fall apart. It seems that may be the case for wildly popular PACE financing programs in cities and states across the nation. The programs, which allow homeowners to borrow municipal loans for renewable energy systems and pay them back through a voluntary property tax increase, are under attack from Fannie Mae and Freddie Mac, two quasi-governmental mortgage lenders and owners of over half the mortgages in the United States.

Fannie and Freddie, both regulated by the Federal Housing Finance Authority, have effectively killed PACE financing despite its broad popularity and near-universal acceptance as a means for financing renewable energy and energy efficiency upgrades. Last month, the lenders sent out letters to their customers forbidding entrance into PACE financing contracts with municipalities, citing that the agreement would add risk to mortgages because PACE loans would receive priority payback over the mortgages themselves.

A solar industry uproar ensued. Industry and advocacy groups laid intense pressure on the Obama administration, which already allocated $100 million in Recovery Act funds to aide PACE program development, to stop Fannie and Freddie in their tracks.

So the Obama administration, reports Grist, then tried to convince the FHFA to end Fannie Mae’s and Freddie Mac’s ban on PACE loans. But the federal government failed to do so. The corporations assert that the financing scheme is unacceptable, “regardless of how it is structured, accelerated or insured.”

With over half of American mortgages financed by the two corporations so famously beleaguered by the housing crisis, the lender letters and support from the FHFA are a real detriment to PACE programs, which by nearly all other accounts are the most safe and effective way to finance home energy systems, in part because loans are tied to the property (not the individual), and because they create revenue for cities and counties in desperate need of reliable income.

Without a sudden reversal by Fannie Mae and Freddie Mac or the FHFA, the only possible help for PACE advocates is from Congress. In fact, based on broad support thus far from local, regional and national politicians, it seems very likely that the federal legislature will pass enabling legislation — just as more than 20 states have already done in their own legislatures — overriding this corporate mandate. But that can take months or longer. Indeed, the Obama administration is advising recipients of stimulus funding once intended for PACE programs to look into other ways to use the money.

Source: Grist.org
Photo Credit: Hal Blog & GENI

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Every piece of art needs a finishing touch—the brushstroke or chisel-strike that brings real satisfaction to both the artist and the art aficionado. In the new millennium, a small business is more like a work of art than ever in history, as technology and unprecedented human inter-connectivity have made even the smallest businesses visible all over the world. Coupled with the collective movement toward sustainability, the new business paradigm has ushered in a new era of small business-building.

These days, a successful business is four-dimensional, with a physical storefront locally and a virtual front internationally. Yet in addition to increased visibility and more varied markets comes a demand for sustainability. It’s as if the artwork were being sculpted right in front of the art critic. No business is built today without a green mission statement or corporate responsibility disclosure.

Yesterday’s bottom line, yesterday’s responsibility, was money-making. Today it has been joined by social and environmental responsibility. At first it seemed that the two latter responsibilities would be detrimental to the former, which of course is still absolutely vital to the survival of any business, especially the smaller ones. Fortunately, thanks to the dedication and creativity of forward-thinking small business artists over the last few decades, a properly managed triple bottom line yields rewards on all fronts.

And like any piece of art, it begins small, as an empty canvas or a block of stone. The small green business may start with recycled paper towels in the restroom, efficient lighting or Energy Star appliances. But the finishing touch on any green-to-the-max business is solar power. Not just because the solar system almost always sits on the rooftop, but also because that system is most energy-effective and most rewarding for the business after all available steps toward energy efficiency beneath the roof have been taken.

The construction of a successful solar-powered business is in some ways like the construction of the building that houses it. A building is always built from the bottom up, with every post, beam, wall, rafter, nut and bolt connected to everything beneath it, all the way down to the foundation. Slapping a solar power system on an inefficient building is like throwing frosting on a Betty Crocker box and calling it a cake—it just doesn’t work.

But even the most efficient business still uses a lot more energy, especially during the day, than the average home. And with solar power, the more energy you consume, the more worthwhile a solar system becomes. The road to that penultimate brushstroke on the green business canvas must begin with a first stroke, a first dip in the green palette.

Compared to a household, for a business going green, the way is not so much a road or a point-A-to-point-B scenario. Instead, it’s more like points A through Z circling in on point G. Here, we’ll deal with the steps necessary to successfully go solar in a small business, but in addition to harvesting green energy, there are steps like producing, buying or selling green products, formulating an environmental management plan, using hybrid vehicles for deliveries, reduce-reuse-recycle, water conservation and more. The U.S. government offers a handy green business guide for new and existing businesses of all types and sizes, including financial assistance for pricier upgrades.

Understanding the Benefits of Small Business Solar

Incentives

Now back to the art project at hand: small business solar. The benefits of going solar are paramount, and although a good deal of money is involved, there is plenty of help available to get there. The federal government is offering a 30-percent tax credit to businesses and homeowners until 2016. The average home solar power system may cost, say, $20,000, but depending on the energy demand of an office, warehouse or workshop, a business-sized system can cost up to $100,000 or more. Fortunately, there is no cap on the federal tax credit, so that $100,000 system would fall to $70,000 within a tax year or two. There are also state tax credits or rebates in most U.S. states, which will further cut the end costs.

And of course, you don’t have to purchase a system that will satisfy all or most of your company’s demand. Systems can be designed to fit demand, rooftop and budget, with rebates and incentives thrown in for good measure.

Business Perks

Some solar power perks pertaining to system placement and installation are unique to businesses. For example, many businesses are housed in buildings with flat roofs. While this may mean a bit more in mounting expenses, it also allows for optimal tilt of the panels in relation to the sun. Furthermore, many businesses, which usually exist in urban environments and are taller than the average home, have roofs unobstructed by trees or surrounding buildings—again saving on stress and costs for installation and maximizing performance. Most states have passed solar easement laws as well, which protect the right for a solar business owner to have access to direct sunlight.

Also, most businesses operate during the day, with minimal energy consumption in the evening and throughout the night. This means that peak energy consumption is directly aligned with peak energy output from a solar power system, i.e. more bang for your buck.

Energy and Cash Savings

Saving energy helps the local energy grid and the global environment. Saving cash helps the business. For this reason, solar-powered businesses are a touch philanthropic as well as economically sound. Now, the initial cost of the system before incentives (some rebate programs will lower upfront costs) is high and often intimidating for small businesses without the capital of a corporate chain. However, after incentives toss some of that money back in the pot and energy savings begin to catch up with money spent initially, a future of free energy and huge savings starts to get closer. Saving even 10 percent on overhead costs can reap massive benefits.

PR Wizardry

Of course, there’s nothing wrong, in the business world at least, with bragging a little about your accomplishment. Being able to say that this beer, that bagel or those sweaters were made with solar power is excellent PR, perhaps even enough to make a wizard trade in his staff for solar panels.

The Art of Small Business Solar

Auditing Energy

No business likes to hear the word audit, but in the new business paradigm, the word is taking on a more positive connotation. The best way to start going solar, for any home or business (or home business), is to upgrade energy efficiency. In other words, be sure that you’re stretching that solar electricity as far as it will go. But the best way to increase efficiency is to find out where inefficiency lies. And you do that through an energy audit.

For businesses, you can broaden that to a business practices audit as well, including everything from reducing paper usage to turning off lights when leaving the bathroom to efficient appliances to selling drinks in compostable cups…whatever best applies to a business’s particular niche.

An energy audit in the sense it is most referred to, however, identifies areas inside, on and around the building envelope that are wasting energy. Air leaks through windows and doors, poor insulation and incandescent lighting are a few common avenues by which electricity is over-consumed. Even without a solar power system as the end goal, addressing energy inefficiency alone can save thousands of dollars in energy costs for an average business.

Collecting Solar Energy Erases Debt

In Europe and sporadically in U.S. cities and states, solar energy systems can actually make money. But for now, in general, that isn’t how solar power can erase debt. It can help free up money to pay off financing obligations (perhaps for the system itself) by saving on utility bills. But it also helps erase an individual business’s portion of our collective debt to the environment. More than half of the energy consumed in the United States is sapped by commercial buildings, many of which house small and large businesses.

The first big step is energy efficiency (add to the list programmable thermostats, upgraded HVAC systems and energy-optimized computer settings while we’re at it), and then comes the actual solar power system. The world is not so short on qualified solar contractors anymore, although in many markets, it’s hard for them collectively to keep up with demand. These are contractors who can do a site analysis to determine the best system design given climate and building location, as well as estimate costs before and after incentives and estimate return on investment.

For businesses, that ROI is almost universally faster than for a home alone (no movie pun intended). So stop SCulking (movie pun very much intended but also partially regretted) about. We need to curb climate change ASAP. So ATTN: Read this memo: Businesses contribute the most to urban pollution and global warming, a battle that can only be fought one business at a time.

Seriously look at the costs for solar purchase and installation, as well as energy efficiency upgrades in your area. Call some local contractors for free installation estimates. Get involved in local sustainable business organizations. Speak with other business owners who’ve already painted their solar masterpiece. The odds are very good you’ll crunch positive numbers for the long run with solar electricity and you’ll hear good reviews from solar veterans. And remember that you don’t have to be a Wal-Mart to go solar.

Green business is for Moms and Pops too.

Photo Credit: SF Gate / Chronicle, Blue Oak, & Happy Cows Creamery

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