Philadelphia wants to make 2019 the year of solar power.
As part of the city’s inaugural Solar Week, Mayor Jim Kenney signed two bills this morning to encourage Philadelphians to install residential and commercial solar panels.
The initiative is part of Philly’s continual commitment to uphold the Paris Climate Agreement, from which the U.S. withdrew in 2017, with a goal to reduce 80% of citywide carbon emissions by 2050. In order to meet its goals, 80% of the Philly’s suitable rooftop space needs to be clean energy. These bills are local government’s incentive program to promote solar use.
And there’s real interest in making that happen: Philadelphia Energy Authority Executive Director Emily Schapira said 5,500 people have expressed interest in installing panels since the creation of Solarize Philly, a City program to encourage solar use in the home.
The first bill created a Commercial Property Assessed Clean Energy (or C-PACE) program for commercial or industrial building owners to finance renewable energy through their tax payments.
The bill lets owners pay for energy and water efficiency on their property tax bill. This means they can have a longer-term loan — at least the full 25-year expected life of solar panels — and that the debt from installing the panels continues with the property, not the owner — so building owners are not responsible for the bill after selling, and new owners can continuing accruing benefits and taking over the costs.
For developers, this means that in addition to a lower cost of running a building, someone can take advantage of the increased property value of solar panels without needing to worry about the debt of the equipment after selling.
“In Philly, we’re such a young solar market that I think it makes it kind of difficult to know what the ultimate real estate impacts will be,” Schapira said. “But nationally, there’s good data showing property value increase for solar at about 4.1%.”
So, why 2019? At the moment, the federal government offers a 30% federal investment tax credit back for installing solar panels in the first year. After this year, it will continue to decrease gradually — 26% in 2020, 22% in 2021 and 10% for commercial in 2022 and beyond, and the same for residential until after 2022, when no credit will be offered. Thus, city representatives are encouraging installation this year to save on cost, and soon, as 5% of the project has to be completed by the end of the year in order to qualify.
Since C-PACE starts at the state level, the city was unable to implement the program until last year when Pennsylvania became the 36th state to pass the bill. Philadelphia is the third county in the state to adopt C-PACE, behind Chester and Northampton counties.
The second bill is a rebate program from the city for installing solar panels. Residential projects will receive an incentive of a $0.20 per watt return and commercial will receive $0.10 with an initial allocation of $500,000 from the City’s General Fund for fiscal year 2020. The application process begins January 2020 for projects completed after July 1 of 2019.
The rebate runs on a first come, first served basis, with a prioritization for low-income residents. However, since it can be difficult for these residents to come up with the initial funds needed to install solar panels, Schapira said the City is looking into and backing alternate projects such as a set of community panels of which residents can purchase a share.
“At the Energy Authority, we don’t just work on energy for its own sake,” Schapira said. “We work on it to meet the biggest challenges our city faces, from climate change to poverty to public health to economic development.”