Taxpayers are, once again, being forced to become guarantors for what amounts to a loan to the private sector.
John Bury of NJ Voices has a follow-up story to the Renewable Energy Initiative sponsored by the Union County Improvement Authority and/or its darling law firm, DeCotiis Fitzpatrick, via the taxpayers. See latest from Bury here.
Basically the scheme works like this. Taxpayers front a private enterprise money to install solar panels on municipal buildings throughout the County, reported to be $45 million. The private enterprise takes on the repayment of the debt by utilizing the current 30% federal tax credit as well as sellling back energy to those municipalties/schools who participate at prices lower than local utility companies. Keep in mind overtaxed taxpayers/loan guarantors that solar panels do not generate enough energy to replace traditional energy. Some estimates indicate that solar panels typically generate 10% of total energy needs, which means 90% of our energy will still come from traditional energy sources. Therefore, for our significant investment, we get to buy back somewhere around 10% of our engery needs at a reduced rate from the private enterprise. The private enterprise is expected to earn a profit for itself out of all this too.
A quick review of the The Emergency Economic Stablization Act of 2008 indicates the energy tax incentives expire in 2017, a mere 7 years from now.
What happens when the tax incentive expires?
What happens if the purported energy savings, in addition to debt repayment and providing lower cost energy to its customer, can't cover the overhead of the private enterprise running the solar program?
Most importantly, who pays back the debt if or when the private enterprise goes bankrupt?
This seems like an awful large financial risk for the promise of very little return.
Woud you like mustard or mayo on your sandwich?.
Subscribe to:
Post Comments (Atom)
2 comments:
I don't understand your problem with this.
"Taxpayers front a private enterprise money to install solar panels on municipal buildings throughout the County, reported to be $45 million. The private enterprise takes on the repayment of the debt by utilizing the current 30% federal tax credit as well as sellling back energy to those municipalties/schools who participate at prices lower than local utility companies."
So we front them the money and they then take on the debt - what's the problem? From what I read, we won't be responsible for the debt and we get a benefit from it.
"Keep in mind overtaxed taxpayers/loan guarantors that solar panels do not generate enough energy to replace traditional energy."
Who ever said it was supposed to "relace taraditional energy"? This is a method of reducing the cost of traditional energy use, which is not only fiscally responsible, but environmentally responsible.
"Therefore, for our significant investment, we get to buy back somewhere around 10% of our engery needs at a reduced rate from the private enterprise."
Once again, if we're fronting the money and they are then assuming the debt, we gain this benefit of lower energy costs. 10% may not be alot in the overall scheme of things, but I just can't see where paying less for 10% of our energy costs is a bad thing. It is still less, no matter how you look at it. It's reasonable to assume that those lower costs, when added with other small measures, will bring costs down within the city and reduce our individual tax burden.
You do know the UCIA's track record in Linden?
Since it takes a signigicant amount of time, as pointed out in Bury's column, to turn a profit, I question how the bond can be repaid, in addition to the company turning a profit and still having enough financial resources to sell back its customers lower cost energy.
The attorney for the County who made the presentation to the Freeholders, pointed to the current 30% federal tax credit as a component to paying the bond off. That credit expires in 7 years. That credit may or may not be extended.
IMO, there are too many unknowns to justify having taxpayers guarantee a $45 million debt.
Post a Comment