With the passage of a California solar and energy efficiency financing law, demand for residential photovoltaic systems may start to increase at a time when financial incentives for commercial solar remain uncertain.

Sponsored by Assemblyman Lloyd Levine, D-Van Nuys, the law enacted on July 21 allows cities and counties to offer low-interest loans to home owners to install solar panels and other energy-saving amenities.

Assembly Bill 811 allows home owners to pay long-term voluntary fees on their annual property tax bills for costs associated with a photovoltaic system.

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Photo By Dan Elliott

Assistant City Manager Allen Howe in a Cathedral City parking structure topped by a solar panelgrid.

Palm Desert ready

The law originated with officials in Berkeley last year and was immediately supported by Palm Desert officials, who created the Palm Desert Energy Independence Program.

The Palm Desert Office of Energy Management is working to implement the program by August, said Benjamin Druyon, an energy project technician.

"We don't have the details worked out yet," he said. "We are currently working with the finance department to come up with a plan."

Meanwhile the fate of federal incentives for commercial solar installations remains uncertain.

Rebates and incentives offered to businesses have made solar power a mainstay in California.

But with the federal tax credit set to expire at the end of the year and its renewal status still sketchy, it could be lights out for the industry.

"This is an incredible factor that needs to be addressed on the federal level," said Glenna Wiseman, a spokeswoman for Murrieta-based HelioPower Inc. "The government is a major investor and business tool that fuels the industry." For some solar companies, the lack of a federal rebate program for commercial programs could prove costly but some companies are optimistic they will persevere.

"It's not going to affect us a lot, it might reduce our business by 10% for us as a smaller local company," said Scott Carlson, former owner and current vice president of Murrieta-based Carlson Solar.

"It is definitely going to hurt some of the larger companies that only do commercial, it's going to devastate them," he said.

Some of the opposition for solar has come from utilities that stand to lose the most money, Carlson said.

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"The power companies are losing control over their product," Carlson said. "They're not the only ones producing the power and they can't make as much money off it."

Credit expiring

The most recent attempt to renew the federal incentives was removed from the Federal Housing Administration bill, which passed last week. Sen. John Ensign, R-Nev., tried to attach an $8 billion package of renewable energy tax breaks to the housing finance bailout.

The booming solar market draws comparisons to the early 1980s, when the demand for solar power was strong, even though it ultimately plummeted, according to Roy Heine, founder and chief executive officer of SunTrek Industries Inc. in Irvine, a manufacturer, equipment integrator and licensed solar contractor.

"The tax credits and rebates went away around 1983 and when they did, the industry got wiped out," he said. "The 30% federal tax credit is set to end Dec. 31 and our Senate has not approved its extension several times this year."

"The oil states and senators that represent them are causing the extension not to fly," he said.

"My crystal ball tells me that there's a 25% chance that at the last minute, sometime in December, they will pass a one-year extension on the 30% federal tax credit," Heine said. "I'd say there's a 75% chance that the tax credit will expire and there probably will be two to four months where our industry is going to be in jeopardy."

The lack of an extension past Dec. 31 on the federal incentive program made potential commercial customers skeptical, Wiseman said.

"The whole system has to be designed, built, permitted, tied into the local grid and approved by the local utility," Wiseman said. "If you started tomorrow you would really have to move fast to get it commissioned by the end of the year."

HelioPower has managed to finish some local projects, including a 14.6-kilowatt solar power system on the roof of Monster Media Inc. at 1515 Marlborough Ave. in Riverside.

The Monster Media project was the first in Riverside Public Utilities' Non-Residential Solar Rebate Program, which offers a $3 a watt rebate to commercial customers.

The incentive has a $50,000 limit. The Monster Media rebate totaled $44,000.

"With the rebate the system will pay for itself in the first year," said Derric Swinfard, owner of Monster Media, a digital imaging firm. Swinfard has solar panels on his home as well.