Austin Solar Panel Financing up for First Vote (Updated)

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Today, less than two months after Mike Villarreal's HB 1937 became effective, the Austin City Council will vote on a resolution to act upon the bill's intentions.  Agenda Item Number 39, sponsored by Mayor Leffingwell, would order the City Manager to “study and evaluate the means of  implementing a program under HB 1937 to finance the installation of  energy efficiency improvements and renewable energy resources by  property owners in the City of Austin, in a way that has no cost impact on  the City government.”

In other words, the the council can take the first step towards a plan that would allow solar panels added to homeowners' houses through property tax based loans.  Council Members Randi Shade and Mike Martinez also co-sponsor the legislation, and hopefully the rest of the council will join in support.  If passed, though, the council will still need to vote on the final implementation, which would probably occur in January.  Regardless, the mayor sounds excited about the idea:

“If successful, it will help make solar energy accessible to many more local residents, help them save money on their home energy bills almost immediately, and continue to build on Austin's growing reputation as a national leader on renewable energy initiatives,” Leffingwell said.

Leffingwell said the program could potentially allow the installation of solar panels and energy efficiency upgrades with no up-front cost. The loan would also be tied to the home and would convey when it is sold, the statement said.

Of course, the plan still has its kinks, too.  I imagine the City Manager, the Mayor, and their staffs will be able to work them out.

Austin Energy General Manager Roger Duncan is an advocate of solar power but worries that if too many people install solar panels too quickly, the city could have trouble maintaining its grid unless it comes up with a new business model for the utility.

The city government has been promoting solar mainly by offering to pay part of homeowners' installation costs. That subsidy money comes from fees collected from all electric-utility customers.

But the subsidy, or rebate, has proven so popular that the city has had trouble keeping up with demand – $3.3 million of the $4 million the city budgeted for this fiscal year was already committed by Oct. 1, the start of the fiscal year.

Thankfully, a loan program like this, more useful to consumers than simple subsides, will can also save the city some money.  Unlike those subsidies, the long-term budgeting implications would barely be effective under a solar panel loan program.  Worst case scenario: I'd imagine the city could place a cap on the amount of loans it gives out per year.  We might need such a restriction, because Austinites are certainly the type to jump on an opportunity like this.

At the current pace, Austin can set itself up to be the first Texas city with such a plan, which may serve as the impetus other cities need to follow through.  Rep. Villarreal follows the issue on his blog, and he informs us, “The City of San Antonio and other stakeholders around town have been working to figure out how to implement the program in our community.”

Perhaps Austin will show the way.

Update: The Austin City Council passed the resolution on a 7-0 vote.

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2 Comments

  1. Very Cool Project
    Thanks for the writeup on this Michael. We are very excited about the possibilities with this project. It is working well in other cities around the country and we're hoping to be on the front end here in Texas.

    I'm so glad the Council voted unanimously for this resolution today and we are excited to move forward and make this work. We've been working with Rep. Strama's office, Austin Energy and others for the past few months to talk this through and are looking forward to the next steps.

    If anyone has any questions, please feel free to contact me at 974-2250.

    Amy Everhart

    Policy Director, Office of Mayor Lee Leffingwell

    • Thanks for all the work
      Thanks for all the work on this, Amy.  I remember when I first read about the policy, I just thought, “This is one of those cool things that everybody should do…and would be dumb not to do.”  

      I'm glad to have a mayor working to bring an innovative and obviously strong policy to the city.

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