Page 29 - Sustainable Cities and Communities Design Handbook

6 Sustainable Cities and Communities Design Handbook

from solar “farms” to onsite and distributed systems for buildings and
communities. This process has also reduced the price of solar systems due in
part to a growing number of new solar manufacturing companies.
One reason was the creation and then implementation of the Property
Assessment Clean Energy (PACE) that the city of Berkeley, California,
enacted in 2008. The program was especially useful for getting solar energy
into homes, buildings, and complexes. However, the city got the loans or other
funds should the building owner go bankrupt or foreclosed. Hence, the US
Federal Housing Authorities (Fannie Mae and Freddie Mac) declared the
PACE illegal since the lenders would get no funds. PACE then only become
possible for business and corporation funding.
This funding process and then others since 2010 resulted in solar systems
becoming cost competitive with regular energy generation systems. The same
economic phenomena came with wind when a combination of long-term
financing mechanisms and government tax and incentive programs reduced
the costs of wind turbines to below that of natural gas power generation by the
end of the first decade of the 21st century. On-site and distributed power has
become a key part of “green development” for both individual homes as well
as businesses, resorts, and other complexes.
Hence, the financial and accounting economics for renewable energy
power generation for the GIR is moving away from a PPA long-term finance
mechanism. This does not mean that the cost benefit analysis (short term in
quarters or even 2e3 years) works now. But soon the shift might be to a more
traditional economic and accounting model. Now, however, there are two
models that have become part of the GIR that Chapter 7 refers to and several
remaining chapters mention. The two emerging models are: (1) feed-in-tariffs
(FiT), which charge a higher energy purchase rate to consumers but also allow
consumers to sell their power to the central grid supplier or other energy
customers; and (2) regular leases.
The FiT was started and very successful in Germany in the early 1990s. It
has since gone under some expansion and revision. Then Spain started a
national program in the mid-2000s that appeared to be too aggressive with
overbuilding of solar plants and systems with some facilities. The net result in
both Germany and Spain was higher employment and job creation in the solar
sector. And for Germany, it became the number one nation in solar
manufacturing. Now other nations and communities are starting FiT programs.
The other emerging economic model is a regular lease. However, the costs
are high although for a shorter time. The costs of solar and other renewables
are coming down, so that one “old economic” model is such that all renewable
power generation might be factored into the regular operational costs (like
heating, air conditioning, electrical and plumbing) for buildings (homes,
offices, storage, etc.). These systems can then be part of the total costs for a
mortgage of any building and then applied to different or more expansive areas
like college campuses, shopping malls, etc., which have clusters of buildings.