by Lin Koh The Vote Solar Initiative
San Francisco is going solar. The city notorious for fog and cold summers is taking its first steps in earning a reputation as the country’s leading municipal producer of solar and other renewable energy.
Thanks to a $100 million bond initiative, the city is installing solar panels, wind turbines and energy conservation technologies. The first project, awarded to Powerlight Corporation, is underway, placing a 675 kW solar electric system on the roof of the Moscone Convention Center.
In November 2001 – frustrated by series of rolling blackouts and skyrocketing energy prices – San Francisco voters overwhelmingly approved Proposition B. The initiative allows the city to issue up to $100 million in revenue bonds to finance renewable energy projects and energy efficiency measures in city and county-owned buildings. At the same time, voters also approved Proposition H, which allows the San Francisco Board of Supervisors to issue revenue bonds that support renewable energy and energy efficiency.
While some areas of the city are fog-bound, other parts are remarkably sunny. According to researchers, a PV system in San Francisco gets roughly 85% of the energy the same system would get in Phoenix.
Bond Initiative Pays For Itself
Voters approved the initiative by a margin of 73%, the largest majority of any energy measure on the ballot in the city’s history. It earned the support of the Chamber of Commerce, American Lung Association, Sierra Club, labor unions and almost every elected leader.
One of the selling points of the measure is that it pays for itself by combining energy savings with solar energy. It will not impact property taxes or the city’s general fund. The bond will cover the cost of solar and other energy efficient technology for city and county-owned buildings. The money that normally goes to generating and delivering electricity will instead be used to pay for the bond.
The measure also reduces the need to build and rely on fossil-fuel plants and encourages the development of more solar businesses and local jobs.
Over the next five years, the city hopes to add 10 MW of solar to its grid. The long-term plan is to increase solar generation by an additional 40 MW, enough to meet 5% of the city’s peak electricity needs. The San Francisco Public Utilities Commission (SFPUC) is mapping the sunniest and foggiest neighborhoods in San Francisco by monitoring sunlight levels at 11 municipal buildings around the city. Readings are transmitted by radio to the SFPUC, where engineers plot them on a computerized “fog map” of the city. Municipal buildings near Golden Gate Park are ruled out but the piers along the Bay look promising. The fog map and solar data are on-line for businesses and homeowners interested in installing their own systems.
Mayor Brown reports that officials have heard from several cities including San Diego, Denver and New York that are looking to follow San Francisco’s precedent.
It was November 7, 2001, the day after San Francisco voters approved the $100 million solar bond, and the phone was still ringing. As news of the ballot victory spread, cities from around the country wanted details on the measure. How did you do it? What’s the payback? Was there opposition?
We started the initiative in San Francisco as a grassroots effort, but all the questions made us wonder – why stop now?
We quit our day jobs – David Hochschild worked at the Mayor’s Office, and I at the EPA – and decided to try to take the model national. In March 2002, we officially launched a nonprofit called The Vote Solar Initiative.
Vote Solar’s short term goal is to help 10 city and state governments implement large-scale solar programs in the next two years. We are focusing on municipal governments for two reasons. First, they are perfect candidates to make large-scale investments in renewable energy. They are large energy users, can borrow money cheaply through bonds, are not driven by a profit motive, are comfortable with long-term planning and investment and are more responsive to their constituents than the Federal government.
Second, we have field-tested a method for leveraging these attributes to make large-scale solar projects cost-effective. Finally, the popularity
of the San Francisco measure – which passed by a 73% margin was endorsed by a diverse coalition of business, labor, public health and environmental groups – demonstrates that people want to participate in decisions that affect their environment. City-led clean energy campaigns provide a way to give voice to that desire.
By focusing on this niche of the market, our long-term goal is to help build the demand necessary to bring down solar’s costs through economies of scale. A series of city-led large-scale solar programs can be the tipping point to bring solar energy into the mainstream.
For cities looking to decrease their energy dependence on the Mideast, increase grid reliability and reduce energy bills, Vote Solar recommends several strategies to help bring down solar costs.
Solar & Efficiency: Beauty and the Beast
The model used by San Francisco pairs solar with energy efficiency retrofits of public buildings, and bundles the project’s total energy savings for payback purposes. While solar is relatively expensive, energy efficiency is cheap. In the same vein, energy efficiency doesn’t inflame the public’s imagination, while solar is sexy and has tremendous public relations value. A bundled project pleases both elected officials and bean counters.
Think Big
Bonds are a source of cheap capital, but have fixed costs and are generally advisable only for amounts over $20-25 million (incidentally, it was a peculiarity of San Francisco’s city charter that required a ballot initiative before issuing revenue bonds. Most cities can issue such bonds by authority of the city council). Lease-purchase financing is an attractive option for smaller amounts. In addition, many states have loan programs with highly competitive rates for energy-efficiency projects, and some programs may allow funds for renewable energy projects as well.
Be a Player
The California Construction Authority (CCA) is putting solar systems on state fairgrounds throughout the state with remarkably low costs – about $4-$4.50 per installed watt (pre-rebate). Buying in bulk helped, but the biggest secret to their success was to leverage the Request for Proposal (RFP) system. Rather than issuing one RFP for an installed system, the CCA took a larger project management role, and instead issued a RFP for each component of the project – the solar panels, the balance of the system, and the installation. They cut the middleman at every turn.
Buy Low, Sell High
Take advantage of the fact that solar produces the most electricity during peak usage – and pricing – periods of the day. The city of Oroville, California recently installed a 520 kW system at its sewage treatment plant. The plant was on a time-of-use rate, paying as much as 34.4 cents per kW during peak periods of the day. With normal usage, the solar system replaces some very expensive electricity, and to the extent the plant can run at night and net-meter during the day, the city can maximize cost savings.
Vote Solar Across the USA
Vote Solar conducted a national analysis to determine where municipal solar projects might be most successful. Factoring in the cost of electri
city, solar incidence and available rebates, the Pacific Southwest and New England dominate the top 15:
1. California
2. Rhode Island
3. New York
4. Hawaii
5. New Jersey
6. Nevada
7. New Mexico
8. Maine
9. Arizona
10. Vermont
11. Massachusetts
12. New Hampshire
13. Connecticut
14. Louisiana
(special thanks to Clare Bressani-Tanko, who did the analysis as part of her master’s thesis in Sustainable International Development at Brandeis University).
We are currently supporting efforts with city and state governments from New Jersey to Hawaii.
www.votesolar.org
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Lin Koh is a Senior Writer with the San Francisco Public Utilities Commission.
Contact Lin: lkoh@sfwater.org
FROM Solar Today, a SustainableBusiness.com Content Partner
Solar in San Francisco … and Beyond
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