Innovative Residential & Business Loan Program Aims to Finance City’s Next Wave of Renewable Energy, Energy/Water Efficiency & Green Jobs
12/14/09 – Mayor Gavin Newsom today announced that he will introduce legislation with Supervisor Eric Mar tomorrow, to help finance new residential and commercial renewable energy projects and energy and water efficiency in San Francisco. The new San Francisco Sustainable Financing Program (SF2) and San Francisco Sustainable Financing Special District allows building owners to access affordable, city-sponsored financing for energy efficiency, renewable energy and water conservation improvements. The repayment obligation will be attached to the property, rather than the individual, and will be paid back through property taxes over the life of the financing.
“San Francisco Sustainable Financing will help residential and commercial property owners finance the next wave of renewable energy development in San Francisco,” said Mayor Newsom. “This innovative program will not only reduce green house gas emissions, it will also fuel the continued expansion of green jobs in San Francisco.”
SF2 is unique from other cities using property-tax repayment models in that it will finance not just solar photovoltaics, but a range of renewable energy, energy efficiency and water conservation improvements. Additionally, unlike other cities using their own investment funds or tax dollars, SF2 will leverage private market lending and available state and federal grant dollars.
“San Francisco Sustainable Financing will help home and business owners overcome the large upfront costs of solar, energy and water efficiency improvements by financing these costs over up to 20years,” said Supervisor Eric Mar, who will co-sponsor the legislation at the Board of Supervisors. “This visionary program will reduce our impact on the environment, dramatically reduce home and business utility bills and create a boom in green jobs in San Francisco.”
Almost half of San Francisco’s greenhouse gas emissions come from energy use in local buildings, while older and wasteful fixtures and appliances strain California’s limited water resources. Initial costs are often prohibitive to improving energy and water use efficiency within building renovation. In July 2008, the City launched its highly successful solar energy incentive program, GoSolarSF, which doubled the number of solar installations in San Francisco, in just one year.
Financing for the program will be structured through the establishment of a Citywide “Mello-Roos” Special Tax District. Owners of individual properties would apply to join the district. In return for opting into the district and agreeing to pay a special tax in amounts tailored to repay the financing over the life of the improvements, the building owner would receive funds to pay the up-front cost of the approved project. No resident or building owner will pay this special tax unless they choose to opt into the program and finance energy and water upgrades.
The program uses private capital to fund the retrofits. The City is also applying for grant dollars under the American Recovery and Reinvestment Act to ensure the program lowers the financial barriers to entry in the renewable energy, energy/water efficiency retrofit market for low-income City homeowners and nonprofit affordable housing providers as well.
San Francisco Sustainable Financing (SF2) Highlights:
· Residential and commercial buildings of all sizes will be eligible.
· Some of the eligible upgrades include: insulation, replacing windows, upgrading heating systems; water efficiency upgrades—such as installing low flow toilets, potable water offsets, irrigation measures, storm water management improvements; financing will also be available for installation of renewable energy generation on buildings, such as solar arrays, solar water heaters and wind turbines
· Program phases in a mandate of a whole home energy efficiency audit and the installation of energy efficiency upgrades before renewable energy generation improvements.
· Private capital to fund the retrofits through Renewable Funding, LLC.
· Program participants can deduct the interest component of their solar financing tax on their tax returns.
· Similar programs exist currently in Berkeley and Sonoma, and others are under development around the state, but San Francisco’s is the most aggressive and includes comprehensive water and energy efficiency improvements as well as renewable generation like solar.