October 11, 2011

Solar@Work Offers Huge Discounts To Commercial Building Owners And Lease Holders

Posted by Steve Sacks under Building Operations, Energy, Finance, Free, Government, Green Economy, Incentives and Rebates, Make Money, Marketing Ideas, Photovoltaic, Save Money, Solar | Tags: , , , , , , , , , , , , |
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A new program in San Francisco, Solar@Work, offers discounts, and in some cases free installation, on solar arrays for commercial building owners and lease holders.  Almost any size business can qualify for the program that will lower energy costs for participants.  For businesses proactively addressing San Francisco’s required energy audits, this program requires a closer look. (For full analysis of San Francisco’s commercial building energy audit program, click here)

Solar@Work groups commercial building owners and/or lease holders together to reduce costs through economies of scale.  Participants generate the greatest savings on energy costs through the purchase of a solar array.  The cost of purchasing and installing a system can be prohibitive, so Solar@Work creates a discount on installation and financing through volume pricing.  A “traditional” solar lease is also available with no up front cost, but the savings on energy bills are markedly less significant.

The Collaborative Solar Procurement model created by the World Resources Institute allows the Solar@Work program to offer four financing options.  Owners can purchase systems at a discount, secure a solar lease, secure a capital loan, or finance through other options including power purchase agreements.

The goal is to collect enough businesses in the program to collectively generate 2 megawatts of power or more.  Applications are being accepted until October 31, 2011, and an informational conference call is scheduled for October 21, 2011.

The ideal applicants are owner/occupiers or long-term leasers whose available space on a roof or parking area is 5,000 square feet or more.

Solar City is the exclusive vendor for the program created by the World Resources Institute, the City and County of San Francisco’s Department of the Environment (SF Environment), in collaboration with the National Renewable Energy Laboratory (NREL), and Optony.

Solar City was selected through a competitive process to provide the installation services for the program.  The company anticipates hiring 400 new workers in the second half of 2011 including 100 in the Bay Area, partly due to Solar@Work.

Congratulations to WRI, San Francisco, and the other contributors to this program.  Solar@Work promises to be another great example of how sustainable development will lead a growth in the economy through reducing energy costs and increasing employment.

 

July 9, 2011

PACE Lawsuit Update

Posted by Steve Sacks under Energy, Finance, Finance / Mortgages, Government, Green Economy, Incentives and Rebates, Law, Legislation, and Policy, Solar | Tags: , , , , , , , , , , , , , , |
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As you will recall, the Property Assessed Clean Energy program allows residents to pay for solar installations through a tax assessment on their property.  Last year, the Federal Housing Finance Agency (FHFA) essentially stopped the program with a letter advising mortgage lenders that Fannie Mae and Freddie Mac would not purchase mortgages on homes that also have PACE financing.  California and eight other parties sued the FHFA to rescind its letter and change its policy.

The PACE lawsuit (Case Nos. 10-cv-03084 CW, 10-cv-03270, CW, 10-cv-03317 CW, 10-cv-04482 CW) continues with a possible end some time in the summer of 2012.  A trial date is set for April 30, 2012.  (click here for the Case Management Order).  Some of my previous coverage of the lawsuit can be found by clicking here. In the beginning of this year, the court asked the Attorney General of the United States to submit a Statement Of Interest offering its position regarding the PACE lawsuit.

Although the executive branch previously endorsed the PACE program, and the creative financing mechanism that is the cornerstone, the Statement of Interest evades the issue at hand (the subrogation of primary mortgages).  Instead, the DOJ argues simply that the the FHFA has authority to bring and defend its own lawsuits and the DOJ does not see a need or mandate to interfere with FHFA’s handling of the matter.  The DOJ then states its only area of concern is that the plaintiffs lack standing to bring the suit.  While plaintiffs may lack standing (I doubt it), the DOJ could have also offered analysis of the legitimacy of the program’s structure.

The parties are now heading to the discovery stage of litigation, but frankly there is nothing to discover.  As far as I can tell, there are really no material facts in dispute.  Either the FHFA is going to allow for PACE programs to move forward, follow the Department of Energy guidelines (Full Guidelines Here), and acknowledge the minimal risks involved.  Or, the FHFA will undermine one of the best modern approaches to nurturing mainstream adoption of sustainable development.

Unless Congress passes a law supporting PACE financing, the lawsuit will move forward, and frankly the prospects don’t look good for plaintiffs.  That means PACE programs will essentially become a great idea undermined by the inflexibility of bureaucracy.

 

June 13, 2011

An Argument For Renewable Energy, And A Response To Robert Bryce

Posted by Steve Sacks under Carbon, Energy, Government, Law, Legislation, and Policy, Solar | Tags: , , , , , , , , , , , , , , |
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On June 8, 2011, Mr. Robert Bryce, author of the recently published Power Hungry, The Myth Of Clean Energy And The Real Fuels Of The Future, wrote an Op-Ed piece to the New York Times. In the piece, Mr. Bryce argues that the recently signed mandate requiring a 30% renewable portfolio standard places too high a burden on society.  Mr. Bryce attempts a clever approach addressing considerations some sustainability advocates fail to consider.

Of note, I will be reading Mr. Bryce’s book and commenting on it shortly.  While I do not agree with Mr. Bryce’s observations in his Op-Ed piece, he does raise essential considerations that any advocate for sustainability must address.

The two main issues that Mr. Bryce raises in his short Op-Ed are that renewable energy sources such as solar thermal and wind power require vast amounts of space to generate large-scale power.  The other issue is that the manufacture of renewable power infrastructure requires vast natural resources.  Mr. Bryce’s Op-Ed can be found here.  Below is a critique of Mr. Bryce’s opinions.

(more…)

 

June 5, 2011

AB 32 Cap And Trade Initiative Delayed!

Posted by Steve Sacks under Carbon, Government, Law, Legislation, and Policy | Tags: , , , , , , , , |
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First, a quick editor’s note.  I’ve been on a brief hiatus, but thanks to all of you for continuing to check in and research our past coverage.   I have a number of articles in the pipeline, so get ready!

Now, on to the recent news.  California’s AB 32 (AKA The Global Warming Solutions Act of 2006) is a fantastic initiative to measure and reduce our impact on the environment. The legislation mandates deep reductions in environmental impact across numerous industrial sectors requiring California to reach 1990 levels of greenhouse gas emissions by 2020. When one realizes this is not a per capita benchmark, the feat appears daunting to say the least. The California Air Resources Board (ARB) is responsible for setting the Scoping Plan for AB 32 that lays out the roadmap for reducing green house gasses. That ARB Scoping Plan was finalized at the end of 2008, and can be found by clicking here.

On March 18, 2011, Judge Earnest Goldsmith ruled that the board failed to follow proper procedures under the California Environmental Quality Act (CEQA) when the board mandated the implementation of California’s proposed Green House Gas Cap and Trade program without a detailed consideration of alternative approaches. With this finding, Judge Goldsmith issued a Writ of Mandate that suspends the implementation of the cap and trade program until the board satisfies the CEQA requirements. (Click here for the decision). Specifically, Judge Goldsmith focused on the board’s failure to show it sufficiently considered alternatives to the cap and trade program (e.g. a carbon tax). The analysis of alternatives is a specific document, the Functional Equivalent Document (FED), contained within the Environmental Impact Report (EIR). A sufficiently detailed FED is required to provide disclosure to the public as to how the decision was reached, and to show the board did not reach its decision in an arbitrary and capricious manner. In this way, the board can conclusively demonstrate that the cap and trade program is the best alternative.

Frankly, this decision appears to be an exercise in legal semantics. Clearly there is a requirement that the board follow CEQA in its decision-making process, but to suggest that the board needs to spend time and money exploring the effects of implementing a carbon tax is unrealistic. Temporary measures aside, California has not voted for a new tax in years (if not decades). To suggest that a carbon tax is an alternative to cap and trade is like saying walking is an alternative to flying.

Goldsmith is right to a certain extent.  The FED is not very detailed, but his decision is really an exercise in futility. The result is that the ARB will comply with the decision while it appeals the ruling. Either way, Judge Goldsmith’s decision results in at least a year delay to the implementation of the Scoping Plan.

The case is Association of Irritated Residents vs. California Air Resources Board, CPF-09-509562

For more on the scoping plan, click these links:

Scoping Plan

Scoping Plan Timeline (Now obsolete to some degree)

Scoping Plan Appendices

 

February 17, 2011

Mayor To Sign Commercial Buildings Energy Performance Ordinance Tomorrow

Posted by Steve Sacks under Building and Design, Building Operations, Energy, Government, Just Plain Cool, Law, Legislation, and Policy, Lease, Risk Transfer, Save Money | Tags: , , , , , , , , , , , |
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First ever mobile post, so excuse the brevity.
Mayor Lee will sign the proposed ordinance into law tomorrow.

WHERE: Adobe headquarters, 601 Townsend

WHEN: 10 A.M., Friday, February 18, 2011

I wish I could be there, but I’m out of town.
Congrats, San Francisco!

For our comprehensive analysis, please click here

 

January 30, 2011

Board Of Supervisors May Vote On Commercial Buildings Ordinance This Tuesday!

Posted by Steve Sacks under Energy, Government, Law, Legislation, and Policy, Lease | Tags: , , , , , , , , , , |
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As we’ve been reporting, the San Francisco Board of Supervisors may vote on the Commercial Buildings Energy Performance Ordinance this week.  The first reading of the ordinance will be Tuesday, February 1, 2011 at 2pm in the Board of Supervisors chamber at City Hall.   It is possible that the Board will vote at that time.  We will let you know how it goes.

For our full analysis and a copy of the proposed ordinance, click here

 

January 24, 2011

Commercial Buildings Energy Performance Ordinance

Posted by Steve Sacks under Building and Design, Building Operations, Carbon, Energy, Government, Green Economy, Law, Legislation, and Policy, Lease | Tags: , , , , , , , , , |
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As mentioned on Friday, the Land Use and Development Committee for the City and County of San Francisco is holding a hearing on Monday, January 24, 2011 to discuss the proposed Existing Commercial Buildings Energy Performance Ordinance.  I encourage you to attend if possible.

The proposed ordinance would require certain commercial buildings to produce two reports, (1) an energy and performance audit every five years and (2) an Annual Energy Benchmark Summary (AEBS).   Save for any confidential information, the audit and the AEBS would be made available to the public.  The ordinance makes sense, but may place a cost on building owners that will inevitably be passed on to renters.  The upside is that renters usually pay for utilities, so energy savings may offset the cost of the audit…something to think about in a green lease, that’s for sure.

Here’s a short summary:

The proposed ordinance will require two reports.  The first report is the AEBS, and that will use the Energy Star Portfolio Manager Energy Performance Rating as a basis.  This report will likely not cost too much money as it is based on the Portfolio Manager software that is freely available, and the data is generated from the local utility (in the case of San Francisco, PG&E).

The second report is a building-wide audit (as defined by ASHRAE Procedures for Commercial Building Energy Audits) conducted by a third-party vendor.  As such, I am guessing the audit likely carries a higher price tag.  Full disclosure, I have never hired someone to do an energy audit for a commercial building, so I am only guessing that the fees are more than nominal.

After the initial three-year staggered start period (which will also be used for the AEBS), the required energy audit would be required once every five years.  As proposed, the audit requirement is as follows:  Level I audits (as defined by ASHRAE) are essentially “walk-through” audits.  These are required for buildings between 10,000 to 49,999 sq ft (smaller buildings).  Level II audits (as defined by ASHRAE) are comprehensive surveys and analyses, and they are required for all buildings 50,000 sq ft and above. (larger buildings).

If owners do not comply with the requirements they may face fines.  The fines are $100/day (for larger buildings) or $50/day (for smaller buildings) for every day of non-compliance up to 25 days per 12 month period.  In other words, the maximum fine per year is $2,500 for a large building and $1,250 for a small building.

In general I like the ordinance but there are some issues that should be addressed… (more…)

 

January 21, 2011

Mandatory Energy Audits For Existing Buildings – Vote Imminent!

Posted by Steve Sacks under Building and Design, Building Operations, Carbon, Government, Law, Legislation, and Policy | Tags: , , , , , |
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This post today is short and sweet, because I want to get the notice out.  San Francisco is contemplating legislation that will require commercial building energy audits.  A hearing in front of the Land Use And Economic Development Committee will be held on Monday, January 24 at 1pm in San Francisco City Hall Room 263. The Board of Supervisors will vote on this soon following a recommendation from the committee.  If you’re interested in attending, go for it!  We support this legislation, but a full and thorough debate is necessary to create effective legislation.

Click here for the committee agenda: 012411 LU Agenda – FINAL

Click here for the ordinance and supporting documents that are under consideration: 101105

We previously covered post-occupancy performance and the proposed legislation (click here for a few of the posts).  Updated analysis will follow this weekend when I have time to write.

 

December 14, 2010

FTW! Largest Municipal Solar Project In California Comes Online

Posted by Steve Sacks under Energy, Finance, Government, Green Economy, Law, Legislation, and Policy, Make Money, Photovoltaic, Risk Transfer, Save Money, Solar | Tags: , , , , , , , , , |
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Last week Mayor Gavin Newsom  and Recurrent Energy announced the completion of the Sunset Reservoir Solar Project.  We mentioned the story back when it started, and we’re glad to see it finished quickly! A year and a half is pretty good to install 24,000 solar panels (imagine 12 football fields) generating 5 megawatts of power (with some sources stating as high as 7 megawatts).  The energy generated can power 1,500 homes, but will be used instead by the city to power public transportation and city buildings.

The project is the result of a public-private partnership (P3) with Recurrent.  As a result, San Francisco owns the property, but leases the rights to operate the plant and sell the energy.  Under the current contract, Recurrent will sell energy to the city at $0.235 /kWh.  That price will allegedly save roughly $1 million per year in energy costs.  Through the P3 procurement method, San Francisco saves the up-front costs of implementing the system, and reaps the rewards of low cost sustainable energy.

And, let’s not forget.  The money paid to Recurrent stays right here in California.  The corporation was founded in California, pays taxes in California, and employs people in California.  71 general labor jobs – in a decimated construction industry – were created from this project.  30 percent of those jobs were for individuals from disadvantaged communities (Though they had to fight to keep those jobs).

This project looks like a win for proponents of sustainable energy, public-private partnerships, and green job promotion (The CGBB fits into that category).  It also looks to be a win for San Franciscans who will instantly see savings in energy costs to public services.

In the meantime, congratulations to Recurrent Energy and San Francisco.  The Sunset Reservoir Solar Project is currently the largest municipal solar installation in the state.  We hope more of these projects are built immediately all around California and the nation!

San Francisco Press Release Here

(For those of you wondering, “FTW” stands for “For The Win”)

 

October 20, 2010

PACE Lawsuit Update (BerkeleyFirst and GreenFinanceSF Still Suspended)

Posted by Steve Sacks under Energy, Finance, Finance / Mortgages, Government, Green Economy, Incentives and Rebates, Just Plain Cool, Law, Legislation, and Policy, Make Money, Marketing Ideas, Mortgages, Risk Transfer, Save Money, Solar | Tags: , , , , , , , , , , , , , , , , , , , , , , |
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The feud between Fannie Mae, Freddie Mac, and the PACE program is heating up.  I’m going to play devil’s advocate (for a moment), so let me quickly set the stage.  As you will recall, Fannie Mae, Freddie Mac, and their parent entity (following the financial crisis of 2008) the Federal Housing Finance Agency (for convenience, collectively “FHFA”) single-handedly torpedoed the Property Assessed Clean Energy program (PACE), one of the best publicly and privately-funded tools for gaining energy independence.  California immediately sued to stop FHFA from interfering with the programs. (United States District Court For The Northern District Of California, Case 4:10-cv-03270-CW)  According to pacedata.org, five other parties have separately sued the FHFA.  Just last week, the FHFA filed a motion to dismiss the California lawsuit. I am not willing to join FHFA’s motion, but I am also willing to say we can’t just scapegoat FHFA. They are just doing their job.  Perhaps a compromise is in order?

For a copy of California’s lawsuit against the FHFA, click here.

For a copy of FHFA’s recently filed Motion To Dismiss, click here.

FHFA is in charge of protecting the integrity of the housing finance industry, and they have taken on PACE financing because it undermines the integrity of primary mortgages. They have a point, and they can’t just look the other way (as much as it appears they are looking straight into the pockets of big banks).

(See our previous posts on AB 811 backed PACE financing programs such as BerkelyFirst or SFGreenFinance by clicking here).

PACE debt is classified by municipalities as an assessment, and in case of non-payment the PACE debt becomes a tax lien against a home. The issue FHFA have is that in case of foreclosure, tax liens are paid first. That puts the PACE payout in front of a primary mortgage, and that undermines the integrity of the primary mortgage market.  If PACE programs explode in popularity across the nation (as they were prior to the FHFA advisory letter), that’s a big problem for FHFA.  The PACE debt is likely small, but if it is nationwide it is definitely an issue. If FHFA are going to be true to their mission they have to stand up to this (especially since Fannie Mae and Freddie Mac didn’t show sound judgment leading up to the mortgage-backed securities financial crisis).

The sticking point is proponents of PACE financing aren’t interested in making the PACE debt secondary to a primary mortgage.  Recently, California Representative Mike Thompson (and many others) proposed a bill that’s a pretty good compromise, but still asks the FHFA to look the other way on PACE financing.  The devil’s advocate is not sure this is appropriate in situations where private entities finance PACE debt.

HR 5766 requires that:

“the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation [Fannie Mae and Freddie Mac] shall adopt underwriting standards that are consistent with the Guidelines for Pilot PACE Financing Programs issued on May 7, 2010, by the Department of Energy.”

The DOE guidelines referred to in HR 5766 state:

“In states where non-acceleration of the lien is standard for other special assessments, it should also be standard for PACE assessments. After a foreclosure, the successor owners are responsible for future assessment payments. Non-acceleration is an important mortgage holder protection because liability for the assessment in foreclosure is limited to any amount in arrears at the time; the total outstanding assessed amount is not due in full.” (Full Guidelines Here)

The DOE guideline quoted above states that under a PACE program in a state where under foreclosure proceedings a primary mortgage holder can demand payment for the full amount of the debt, PACE assessments can only ask for the debt that was owed up to the time of the foreclosure.  This is an important distinction.  The problem is that the PACE lien still supersedes the primary mortgage to some degree.

I doubt this would be such a problem if municipalities provided all of the financing for PACE programs. Municipalities will always have the power to impose assessments.  The problem is that often PACE financing is provided by private enterprise.  Further, with the municipal budgets in pieces, the likelihood of private finance for PACE programs only increases.  I am all for PACE programs, but allowing a private entity to supersede a primary mortgage without asking the primary lender seems a little, shall we say, inconsistent (even if the motives are pure).

For my return from the devil’s side of the argument, and some suggestions for solutions, click the “more” link here:  (more…)

 

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