Page 611 - Sustainable Cities and Communities Design Handbook

578 Sustainable Cities and Communities Design Handbook

Solar Company Finance
Renewable energy companies finance their own products. In short, the pro-
gram avoids both intermediate financial institutions and installers. Instead,
there are some solar companies who will fund and finance solar systems. The
interesting twist to this program, however, has come from Hanergy, which is
the largest renewable energy company in China. The only requirement is that
the solar and other products are from Hanergy or companies owned by or
related to them.
The other renewable energy company strategy is the use of power purchase
agreements (PPA), which was started about 6 years ago from Japanese com-
panies. The requirement was that the purchaser of the solar system, for
example, must do so from a finance company or bank. The PPA became a
popular way to fund solar systems since 2006 because the price for solar
panels was high. The long-term pay period made the solar systems available at
lower costs. However, when the costs are added up, the total price for the
customer or user of the solar panels was very high, and was payable over a
long period of time.

Cap and Trade

The old economics has created a new version of the “market economy”
through what it calls and promotes as “cap and trade.” The implementation of
Assembly Bill #32 in California (2012) after its passage under Governor
Schwarzenegger was due to years of testimony and data gathering by the
California Air Resources Board. The concept of cap and trade has been sup-
ported by members of both political parties since it creates credits for the
savings of emissions that can then be traded to others. The critical issue is that
there is a legal requirement to do so, hence creating a market for trading of
carbon credits: cap is a legally set requirement either reverse emissions to
lower levels such as 1990; and trade is the saving credit that is then traded on
an climate exchange.
While cap and trade has gathered a lot of support from the neoclassical
economists, it has created a “market” that is based on credits given to
companies (and individuals) based on measurable environmental savings
from energy efficiency technologies to renewable energy systems used pri-
marily for buildings. A positive impact reversing climate change can happen,
but primarily for the user of the technologies and systems. The negative
problem is then trading that savings to some company or people who are not
stopping climate change through reduction of emissions, etc. There are now
trading markets and exchanges in the European Union as well as some
established in the United States. There are serious questions about such cap
and trade credits and exchanges. Much of it is due to the inability to regulate
and set enforceable standards. Market exchanges have difficulties in doing