CITY HALL — If city officials get their way, harnessing green energy will be a little bit easier on the wallet.
Solar energy has long been discussed as a strong candidate for renewable energy because by the time the sun is no longer there to produce it, we won’t be either.
Unfortunately, solar cells, usually panels of various sizes that collect energy from the sun’s rays, are notoriously expensive, and it can be difficult for the average business, homeowner or even city to put up the cash needed to capture a meaningful amount of the freely-given energy.
Santa Monica’s Office of Sustainability and the Environment announced plans Tuesday to seek offers from private investors to create a “solar fund” to ease the burden on others that want to put up a photovoltaic array on their building.
Private investors would put money into the fund, which another person or entity could then use to purchase solar cells.
Under the plan, the investors would get tax credits from state and federal programs for the cells and money from the arrays’ users for the energy produced.
Between the tax credits and the proceeds, investors would get their costs back as well as a decent return on investment.
The program saves money up front and guarantees energy prices at a set rate said Dean Kubani, director of the Office of Sustainability and the Environment.
“We’ll know what the power cost would be over the next 20 years,” Kubani said. “It’s not variable with the market. The rates for renewable energy are pretty reasonable.”
Kubani’s team got the idea for the fund three or four months ago when it went looking for a company that would install solar panels on city-owned buildings.
The costs were prohibitive, Kubani said.
“The bids we did get, and we didn’t get very many, were very expensive,” Kubani said. “It would have doubled what we pay for power right now.”
Although the proposed fund could be used for private businesses and individuals, City Hall would benefit hugely from the program because as a government agency, it can’t receive tax credits available to individuals.
Ballpark costs for photovoltaic displays on a rooftop are $5 to $6 per watt of energy produced, Kubani said, which puts costs for the 70 kilowatt system installed on one of the city-owned businesses at the Santa Monica Airport at approximately $400,000.
It’s hard to say at this point how much money such a proposal would save city coffers, since private businesses haven’t had a chance to create full-fledged proposals, Kubani said.
“We’re at the very early stages of this,” Kubani said. “We really have to see what kind of money comes in. We’re putting together a [request for proposal] for financial firms and consultants to come in and establish the fund.”
Consultants hired by the office estimate that the fund could see anywhere from $10 million to $100 million in investments because of Santa Monica’s reputation as a progressive city.
At least one Santa Monica company, Pure Power Advisors, has expressed interest in the concept, and, according to Kubani, has had experience setting up similar funds elsewhere.
Representatives from Pure Power Advisors did not want to comment for this article while the status of their application is uncertain.