Recommendation:
Approve the concept of a “Sustainable Technology Financing District” to allow property owners to finance Sustainable Technology installations, such as rooftop solar PV array units, through a voluntary assessment on their individual property tax bills. Continue working with City staff, the UC Davis Energy Efficiency Center, prospective private sector partners, and interested members of the community to develop an implementation timeline and pursue possible sources of grant funding.

Background: 
Cities can play an important role in jumpstarting a transition to a cultural practice of renewable energy and energy conservation by providing a variety of incentives and programs that increase the market penetration rate of advanced distributed energy technologies and consumer behavior changes in private homes and multi-family units. In light of the City of Davis’s commitment to pursuing sustainability and reducing greenhouse gas emissions, programs that reduce fossil fuel based energy consumption should be given priority consideration.  The Sustainable Technology Financing District Initiative represents the use of an economic mechanism that will make financing distributed energy technologies such as solar electric and thermal systems  in private homes easier for property owners to finance.

This initiative is informative and sets a general policy goal; it requests that the Council approve the concept of a City-wide Voluntary Sustainable Technology Financing District. This District would alleviate some of the major roadblocks to the adoption of private solar systems and investments in energy efficiency measures, most notably:

• the high initial installation/infrastructure cost; and
• the possibility that those costs will not be recouped by the time that the property may be sold.

The Financing district would allow the costs of equipment installation to be amortized over a 20-year period.

Process:
Through grant funding and/or a bond or loan fund, the City can secure the capital, to serve as the financing agent where individual property owners opt for a voluntary property assessment for sustainable technology installation. The individual property owners would then contract with a qualified, City-approved local installer.

City bonds/loan funds for the projects would be repaid through these individual assessments, over a 20-year period. 20-years is the approximate time it should take to recover the cost of a solar installation and/or set of permanent efficiency improvements; therefore, energy savings would be expected to match the cost of the annual property assessment.

This City-assisted approach to encouraging sustainable technologies has several benefits: the upfront cost to the property owner is minimized; the City is qualified to obtain financing at an interest rate that is much lower than is commercially available; and the tax assessment is transferable between property owners. Additional benefits to property owners generally include a boost in property value, and an additional deduction on their federal income tax return.

Contacts:
Richard Dorf, Former Chair of the City of Davis Economic and Business Development Commission
rcdorf@ucdavis.edu, 530-754-9061

Sydney Vergis, Senior Planner
sydney.vergis@gmail.com, 925-683-8279

Benjamin Finkelor, Program Manager, UC Davis Energy Efficiency Center
bmfinkelor@ucdavis.edu, 530-752-7659