ABOUT REVENUE BONDS

Blending fiscal responsibility with environmental goals turns out to be a politically popular approach. In San Francisco, the campaign to pass the solar bond was supported by organizations of every political stripe. The 73% margin of victory was the largest majority of any energy measure on the ballot in San Francisco history.

Investing in Energy Independence
Until now, solar power's promise--a clean, reliable, renewable and distributed energy source-has been denied by its price. Compared with the market price of fossil fuels (which does not include the tax dollars we spend guaranteeing a fuel supply from foreign countries or health care costs associated with poor air quality), solar power is, in fact, expensive and currently does not compete favorably with fossil-fuel generated electricity.

How, then, can a city take advantage of solar's many benefits, without paying a premium over the current market price?

Bundling
San Francisco's model shows a clear and simple way to make it work. Solar may be expensive, but energy efficiency is cheap. Wind power is, in many places, extremely cost competitive with other energy sources. The trick is to develop some projects with shorter payback periods, bundle them with solar, and evaluate the costs on a whole-project basis.

For example, when San Francisco issued the original plan for the $100 million solar bond, $50 million was for solar projects, $30 million for wind projects, and $3 million for energy efficiency technologies (the remaining funds go for debt service and other issuance costs). The energy efficiency projects have extremely short payback periods, and wind energy is already commercially viable. When these projects are bundled together, the costs for solar are effectively lowered. For more details on this, see the Tools section.

Bulk Purchasing
Buying in bulk reduces costs. In San Francisco's case, the size of the project was not just for bragging rights: lowering costs through economies of scale and the promise of developing a local solar manufacturing base were practical arguments for thinking big. One option is for local governments to coordinate with each other to pool their purchases, pushing costs down even more.

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The cost of solar photovoltaics has dropped over 200% in the last three decades.