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An innovative municipal solar incentive program is spreading like wildfire across America. Based on a program devised in Berkeley, California, Property Assessed Clean Energy (PACE) bonds are provided by the municipality and paid for over time through voluntary property tax increases tied to the home (rather than the individual). Several cities across the country have or are scrambling to adopt PACE incentives. Virtually all have met with immediate success.

However, one recently developed program in San Antonio, Texas is in dire straits due to a conflict with existing statewide real estate law. A number of solar-incentivizing bills failed in the Texas legislature last year, with only one slipping through. That bill, which allowed Texas cities the freedom to develop PACE programs, set the wheels motion in several towns, including San Antonio, which would also offer loans for solar hot water, geothermal heating and cooling, and several energy efficiency upgrades.

The problem is this: the San Antonio City Council wants to tie PACE loans to the front end of mortgages to guarantee that home solar power systems are paid off before the end of the mortgage (Terms for PACE loans are typically around 20 years). Unfortunately, the city council’s desires seem to conflict with Texas real estate laws and, local solar proponents fear, will make it nearly impossible for the city to secure bonds from insurers due to the added risk brought on by the struggling housing market.

According to Solar San Antonio, nearly 40 percent of residents are eager to go solar, but may not get the chance, at least not anytime soon. There are existing incentives offered for solar PV and solar hot water systems by city-owned utility CPS Energy, but despite the $3/watt rebate on PV systems, there are still thousands of dollars in up-front costs to be contended with in a city not known for extreme wealth. Such is the case in almost every city in the country, and a reason why PACE has been so successful.

Fully aware that PACE programs are the best thing residential solar power has going for it right now, local solar proponents and city officials are searching for a solution. According to the San Antonio Current, there are two options on the table right now. One is a return to the state legislature (which doesn’t meet again until 2011) to hammer out the conflict or get the federal government to guarantee loans. That, say those involved, is the only way that insurers will accept the risk and dole out bonds to San Antonio and other Texas cities. Apparently, the federal option is being pursued right now.

This is the first major obstacle I’ve heard of for burgeoning PACE programs kicking off around the nation. And it certainly puts a damper on the only government incentive option in place for cities in our second largest state, and one with a hefty dose of annual sunshine. In the absence of a national feed-in tariff or renewable portfolio standard, as well as any state level rebates, the success of solar power in Texas in the short term may really depend on how fast San Antonio can get their PACE on track.

Via San Antonio Current

Photo Credit: Solar San Antonio

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