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Low prices, laws,  funding sources  driving investment

NORTH BAY – If recent developments are a sign, the year 2010 will see more solar providers starting up or opening branches in the North Bay.

Passage of the Sonoma County Energy Independence Program is giving a shot in the arm to a local industry already a state leader in number of solar providers and adapters, bringing in half a dozen new companies in the last six months.

State measure AB 811, which allows for cities and counties to set up districts within which residents and businesses can pay off energy upgrades through property taxes, was the stimulus behind SCEIP.

Now Napa, Marin, Solano, Mendocino and Lake counties are looking for ways to form Energy Independence Programs of their own.

Solar providers have long offered a number of financial models to help residents and businesses handle the relatively high installation costs of solar, including loans from financial partners, investors who will provide the system while taking the tax incentives, and lease-to-own models.

But it looks as though assessments to property tax will be the most popular funding model going into the future.

"People are willing to pay higher taxes if they feel their property is being improved," said Rod Dole, Sonoma County Auditor and Controller and one of the founders of SCEIP.

According to Nate Gulbransen, president of solar startup Westcoast Solar Electric in Rohnert Park, solar providers who don't see the handwriting on the wall will be at a distinct disadvantage in coming months.

"They have their own financial models and partnerships set up, but if they don't see pretty quickly how widely the SCEIP model going to be adapted, they'll lose out to smaller, more agile companies," he said.

In 2010, a significant event in Sacramento will be the implementation of CaliforniaFIRST, launched by the California Statewide Communities Development Authority. Funded by the state, Renewable Funding and the Royal Bank of Canada Capital Markets, the program will attempt to do for counties and cities that wish to adapt AB 811 what Sonoma County and the Sonoma Water Agency have done for Sonoma.

Napa County is hoping to be one of six pilot counties in the program. Similarly cash-strapped Lake and Mendocino counties could benefit as well.

"For the solar consumer, 2010 looks like a good year," said Gopal Shanker, president of Recolte Energy, a consulting firm in Calistoga.

"Cost of panels is at an all-time low and financial models such as property tax assessments and investor-backed systems will enable more installations. There's been a pent-up demand."

Also driving the adaptation of solar in 2010, he said, will be the implementation of state measure AB 920, which requires utilities to pay for or credit energy generated by wind or solar and fed into the grid after the system owner has offset his own utility bill.

Depending on the rates set by the California Public Utilities Commission and paid by PG&E, the measure could have a very positive effect on the statewide solar industry, he said.

Sonoma County funded its program initially with money put up by the county and its Water agency, although permanent funding models are currently being sought, according to Mr. Dole.

"What we'll be working on in 2010 are ways to lock in funding for the future in a way that benefits the investors at the same time it lowers energy use," he said.