Ritter signs renewable energy finance act on Earth Day
April 23, 2009
Colorado homeowners and small businesses will be able to finance solar electric systems under a new bill that Gov. Bill Ritter signed into law Wednesday.
“The New Energy Economy is leading Colorado forward by developing sustainable energy industries that provide clean power and good jobs,” said Ritter in a statement.
“With broad support, tis legislation will expand the ways in which Coloradans can finance solar and other efficiency projects, regardless of income levels.”
Ritter signed Senate Bill 51, which is sponsored by Sen. Morgan Carroll, D-Aurora, and Rep. Claire Levy, D-Boulder at Civic Center Park Wednesday as part of an Earth Day celebration.
The bill will allow homeowners and small businesses to take out loans to finance clean energy improvements to their property, such as installing solar electric systems.
“This creates a favorable business climate to make it more affordable,” said Todd Hartman, spokesman for the Governor’s Energy Office.
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“The bill makes it easier for more people to install solar panels on their homes or business.”
Hartman compares the process much like buying a car.
“You don’t have the money upfront, so you go through a bank,” he said. “One of the barriers to solar power is the upfront cost – you can look at spending $6,000 to $8,000 depending on the size. This will make it easier to finance this.”
He said that a third party installer can build the system and will own the system until the customer pays off the loan.
SB51 doesn’t create a pot of money for homeowners or businesses to directly borrow. Instead, the act creates a fund in the Governor’s Energy Office, which provides the backing to banks and other lenders to make clean energy loans.
“It’s for banks to access,” said Hartman. “You’re not giving money to the bank.It’s money that the bank can use to handle the financing with the (solar energy system) installer.”
The state treasurer’s office is authorized to invest up to $40 million in state money in bonds or notes for the sole purpose of funding clean energy loans.
Under the bill, the clean energy loans cannot exceed $12,500 and may be repaid over a 20-year period.
“The bottom line with solar systems was cash flow,” said Hartman. “This would solve those cash flow problems.”
It was not known how many people or businesses would take advantage of these clean energy loans; however, Hartman said the intent of the bill is to encourage residents to consider using solar energy.
“It is important to distinguish this from existing rebates or tax credits,” said Hartman. “There will not be any money given to you. That treasury fund is to lubricate the loans and make the financing process easier.”
It was not clear what would happen to the solar systems if the customer falls behind in payments.
Hartman also notes that another part of this bill will clarify the legal definition of a utility.
if a third-party installer puts up a lot of solar panels on say, 200 homes, the panels are considered belonging to the installer until the homeowners pay the loans off for them.
“:If you build 200 homes and you own the panels, you could be viewed as a utility,” said Hartman. “What this bill does is it clarifies the legal definition. You won’t be regulated as a utility.”
Levy, one of the sponsors of the bill, said the new law would allow more people to participate in the new energy economy.
“More importantly, residents of affordable housing developments and non-profit entities will not be able to afford solar electric and energy efficiency improvements,” she said. “SB 51 will generate millions of dollars in new investments in renewable energy. It’s a win-win for Colorado.
Hartman said he didn’t know what percentage of electricity in Colorado is generated by solar power, since more and more systems are being installed.
“This is a job creator, which is doubly important as we struggle with the recession,” he said.
“It’s going to create more opportunities for more folks in this business.”