Feb 25 - McClatchy-Tribune Regional News - David Danelski The Press-Enterprise, Riverside, Calif.



Inland cities and counties expect to spur thousands of energy-efficiency improvements by making more than $225 million available for loans to home and business owners.

Qualifying projects can range from mundane improvements, such as adding insulation to a drafty attic, to costly, as in installing a rooftop solar system.

People who upgrade their properties now, whether through loans or cash outlay, can tap into an array of income tax credits and state and utility rebates that can cut their net costs by as much as half or more.

Never has so much been available to help people upgrade their homes, reduce greenhouse gas emissions and aid the local economy, said Ron Loveridge, mayor of Riverside, which operates its own electric and water utilities and offers several rebates.

 "The time to do it is now," he said. "Many of these incentives weren't here five years ago."

Yucaipa and Palm Desert already are offering energy loans, made possible through state legislation called AB 811. Loan payments go to the county tax collector along with regular property taxes. If the property is sold, the loan balance is transferred to the buyer. Riverside and San Bernardino counties and more than a dozen cities plan to make the loans available this year.

David "Robie" Robertson, co-owner of the Yucaipa Hearing Aid Center, said he is taking advantage of AB 811 loans to finance rooftop solar systems for his business and home.

He smiled on a sunny Tuesday morning as he showed off his electricity meter. It spun backward, even thought the business was open, the lights were on and his partner, Stephanie Wood, was working at a computer.

Gone will be a Southern California Edison Co. bill that averaged $125 a month, he said.

The solar system from Smart Solar Power of Yucaipa cost $25,571, Robertson said. With a state rebate of $5,319, a federal tax credit of $8,607 and a business expense write-off, he estimates the payments on his 7 percent, 20-year loan will be $30 a month less than what he was paying for electricity.

"I am not taking money out of pocket, and I'm getting a savings," Robertson said. "And it's going to get better as the loan disappears."

The Western Riverside Council of Governments, a planning agency made up of Riverside County and 16 cities, is seeking $220 million from the bond market and another $5 million from federal sources to fund the energy loans, Barbara Spoonhour, a program manager for the agency. She wants the loans to start by June or July so participants can take advantage of federal tax credits for work done this year.

San Bernardino County, Redlands and the city of San Bernardino are working jointly to establish a loan program.

The city of Riverside will start a similar loan effort this year with about $1 million in seed money, said Michael Bacich, customer relations and marketing manager for the city utilities. As part of the loan, city technicians will inspect homes and set priorities for the most cost-effective improvements, he said.

In many cases, installing insulation, replacing old air conditioners or making other conservation improvements is more effective than installing a solar energy system, Bacich said.

Regardless of financing, available subsidies can make for good deals.

For instance, Riverside is offering 45 cents per square foot in rebates for high-grade attic insulation. At a Home Depot store in Riverside, 1,500 square feet of 9 1/2 -inch thick pink fiberglass insulation costs about $1,230. The city rebate combined with the federal tax credit would reduce the homeowner's cost to less than $400. Other consumer incentives include:

The Riverside Department of Public Utilities and Southern California Edison Co. offer rebates for new, energy-efficient appliances such as refrigerators and swimming pool pumps.

Riverside also has available rebates for attic and exterior wall insulation, qualifying windows and doors, and whole-house and attic fans.

Edison is expected to expand its incentives later this year, making customers eligible for as much as $3,500 in rebates for completing improvements that result in measurable energy savings, said Richard Genece, the utility's manager of residential energy efficiency programs.

The Obama administration's economic stimulus package includes federal income tax credits that allow homeowners to write off 30 percent of the cost -- after rebates -- of energy-efficiency improvements made in 2010.

Edison customers who install rooftop solar systems can get state rebates ranging from 15 to 20 percent. Riverside offers similar rebates. Rooftop solar energy and hot water systems qualify for a separate 30 percent tax credit available through 2016, an IRS spokesman said.

Not everyone believes the loans are a good idea.

The Howard Jarvis Taxpayers Association opposed AB 811 because taxpayers, especially in such an uncertain housing market, assume the risks for loan defaults and because such loans can be offered by private-sector lenders, said David Wolfe, the group's legislative director.

"Local government should focus on the delivery of basic services," Wolfe said.

Josephine Han, business development manager for Solar Max, an industry-based rooftop solar installation company, said the AB 811 loans will help reduce global warming by making more cash available for solar and other energy improvement for homes and businesses. But she urged consumers to consider other financing options. For example, a second mortgage may have lower interest rates, and the payments are a tax deduction, she said.

For Scott Kine, a Palm Desert resident, an AB 811 loan made financial sense -- twice.

Palm Desert was the first Riverside County city to offer AB 811 loans, tapping city reserves as sources of funds.

Kine had a rooftop solar system installed on his home last year. The full price was $50,000, but the investment qualified for a $10,500 rebate from the state. He borrowed the remainder from the city with 7 percent interest and a 20-year term. His debt payments are now on target to be roughly the same as the savings on his electric bill, and he is claiming an $8,850 tax credit.

"I added $50,000 in value to my house," he said. "I am very satisfied with my investment."

He and his wife also installed a solar system on a rental house and was able to increase the rent by $200, since the tenants wouldn't be paying a big electric bill every month.

And he expects the value of his investment to increase, since he lives in a searing desert where an $800 electric bill for a summer month isn't unusual.

"Edison rates aren't going down," he said. "They are only going up."

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