COLUMBUS, Ohio – Ohio's latest budget seeks to put solar power in the financial reach of Ohio residents by addressing the cost of installation, the biggest barrier to the renewable energy technology's large-scale deployment.
Now the onus falls on cities and townships across the state to carry the vision forward.
The budget approved earlier this month enables cities to use bonds or grants to pay for the installation ofsolar panels, whose initial cost of tens of thousands of dollars is unaffordable to the vast majority of homeowners. Residents who get the money will then pay back the cost, plus the interest, through an assessment on their property taxes for up to 25 years.
If a homeowner with a solar panel were to move, the panel would remain on the home and be paid by the next homeowner's property taxes.
Berkeley, Calif., was the pioneer for municipal solar financing two years ago, and the idea has spread to other California cities and roughly a dozen states, including Virginia and Maryland. Berkeley has 38 projects funded through the city during the project's filing phase.
In Ohio, the idea started with the Athens City Council in Appalachia in southeast Ohio, which took it to state Sen. Jimmy Stewart, an Albany Republican. It quickly went into the budget plan.
"What we're really hoping to do is establish a model that other cities across the state can copy," said Councilman Elahu Gosney, who said the primary focus is on homeowners but the financing could later be extended to businesses. "One of the driving forces behind this is to use this as a job creator and try to improve our economy."
For the program to have any impact, Athens will have to embark on an education campaign to alert homeowners to the program and convince them of its benefits.
The Athens area has three renewable energy installation companies, which stand to benefit from the new government program.
Matt Bennett, president of Dovetail Solar and Wind, said the economic environment and tightness of the credit markets make solar power out of the reach of most homeowners, even when state and federal grants and tax credits are available.
"It's not something that in these times a lot of people want to go out and invest in even though it may be paid off in the long run," Bennett said.
The average home uses about 700 kilowatt-hours of electricity a month, and the average homeowner getting a solar installation will purchase a solar array large enough to handle about half of the home's electricity needs. That costs about $30,000, Bennett said.
When combined with state grants of $3 per watt for solar power and a federal tax credit equal to 30 percent of the cost of the solar system, the new upfront financing program should enable most homeowners to afford the panels if they think long term, Bennett said.
Homeowners with solar powers have a number of ways to save and make money once the panels are installed. They won't need to purchase as much — or in some cases, any — electricity from their utility company. And if the utility company has a net metering program, the homeowner can sell the excess electricity produced by the solar array to the utility.
Finally, utility companies are now required under Ohio law to produce a certain amount of their electricity from renewable energy sources, with a special requirement for solar energy. One of the ways they can meet those requirements is from buying renewable energy credits from homeowners and other companies producing solar power.
"This is a policy that could really allow for solar panels to flood the state of Ohio," said Amy Gomberg, program director with Environment Ohio.