Letters for December 17 

Readers sound off on Berkeley's solar program.

"Will Berkeley's Solar Plan Go Viral?" Eco Watch, 11/19

Ain't Gonna Happen

After reading your article, Solar Berkeley, I find it interesting that neither you, the Eco Watcher, nor anyone in the Berkeley administration, seems to recognize the massive failings inherent in the Berkeley FIRST solar plan. However well-intentioned the plan was to begin with, the solar industry has been changing too rapidly for anyone to have seen the present coming, and B FIRST arrived DOA.

I find it interesting whenever a politician leaves service for "family reasons" and winds up in the private sector tied to financing the programs they've administered. Not knowing Mr. DeVries personally, I shouldn't question his motives, but perhaps he should have left it at "screw this" before trying to hang his electric costs on the municipality.  

Clearly, solar did not pencil out for any user with a bill under $45 dollars a month. Even when switching to Time of Use billing, the federal tax credit of $2,000 on residential systems kept solar out of reach for conservative power users. But almost to the day that Berkeley rolled out the program, the fed signed the new tax credit, and lifted the residential cap. As of January 1, residential solar installations will be eligible for a 30 percent tax credit, a difference of up to $10,000 dollars.

What the B FIRST program officials, Mr. DeVries, and surely anyone who actually takes the bait don't seem to be aware of, is that the federal government will only allow application of the tax credit to one's actual cost basis in the system. Specifically, to avoid "double dipping," systems purchased with municipal bond funding are ineligible for the tax credit.

So, when purchasing one kilowatt of solar for $10,000 (with $1,900 rebated from PG&E), the B FIRST customer will string $8,100 on a 20 loan, at higher than market rates, with no prepayment option, which hits their tax bill every six months. Anyone else will purchase the same $10,000 worth for $8,100, then receive 30 percent of that ($2,430) in tax credits. If they're smart, they'll pay down their loan to $5,670. On a 4 kW system, that's $32,300 vs. $22,680.

With the loan fixed on their property tax bill, B FIRST customers will NEVER be able to sell their homes, as any intelligent buyer will run the numbers and see that they'll be buried in taxes. Those wishing to simply get the free ride from the city will pay 50 percent more for it. That is, if they can get it.

The primary problem with the B FIRST program is that the bond finance doesn't get processed until after PG&E has signed off on the system, and can't be assigned to the contractor. This means that the monies don't come through for at least a month after the project is completed, and the client will have to be trusted to fork them over. The solar installer, who typically contracts for 70 percent of the project costs up front just to pay for the panels, will need to hold the bag on 20-40-60 thousand dollars for two months after the contract signing.

Ain't gonna happen babe.

Either the installer pool for Berkeley will be limited to megacorporatesolar.com, who can afford to wait two months for their dough, or B FIRST clients will need to finance the system themselves, then pay that finance off with the more expensive B FIRST program. I think the intellectual curve of Berkeley citizenry will preclude that.

The great benefit of the B FIRST program is that it kept everyone in Berkeley waiting all year, so that they can now take advantage of the increased federal tax credit. Outside of that, it's Wake up and smell the Peet's, Berkeley!

Sheldon Norberg, Sun's Free Solar, Alameda

Eco Watch Responds

Under Berkeley's financing plan, homeowners will be able to pay their solar power installers about one to two weeks after installation — not one month, according to Cisco DeVries of Renewable Funding LLC, the Oakland company that is helping the city with financing issues. The two-week turnaround may dissuade some solar installers from participating in the program. However, it remains to be seen if that will significantly affect Berkeley. As for the 30 percent federal tax credit, the IRS has not yet issued a regulation as to whether homeowners are entitled to it if they purchase a solar system under Berkeley's financing system. So to say that they're ineligible is premature. Mr. Norberg provided me with a solar industry interpretation of the IRS code, concerning tax-exempt bond financing, but it doesn't appear to be on point. Berkeley's program does not involve tax-exempt bonds. As a precaution, Berkeley officials are recommending that homeowners contact a tax accountant or tax attorney for advice on the solar federal tax credit. But even if the Internal Revenue Service ultimately decides that Berkeley residents are ineligible for the credit, the city's twenty-year payoff program still works better for people who do not have the sufficient upfront cash to pay for a solar power system entirely at the time of installation.

Corrections

In our Dec. 3 music feature "Mochi on Machines," we incorrectly stated that David Wang's favorite movie, Hands on a Hard Body by S.R. Bindler, is a porno flick. In fact, it is a documentary by S.R. Bindler.

In our Dec. 10 music feature "Dropped in the Soul Tub," we incorrectly spelled Lech Wierzynski's name.

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