How Solar Power Can Be Used to Make Brownfields Green
Cities should offer PACE financing to owners of brownfields to construct solar arrays on the unused sites.
This piece was co-authored with Isaac Alpert.
Brownfields represent a serious economic problem because potentially productive land sits empty, releasing toxic waste and decreasing adjacent property values. Deterred by the initial cost of renovating these unused and contaminated commercial properties, landowners opt to leave such fallow sites untouched. Further, the extent of contamination on brownfields is hard to gauge prior to refurbishing. Cleanup efforts on heavily contaminated sites can cost $150,000 per acre, leaving even large commercial redevelopers fearful of brownfield restoration. The advent of Property Assessed Clean Energy (PACE) funding, a unique form of municipal government financing, can encourage the redevelopment of brownfields with renewable energy projects.
Through PACE, a property owner can receive financing from a city to install renewable energy infrastructure. Solar panels are ideal for brownfields because they fit nearly any sized property. The preliminary funding is repaid through an assessment, or lien, on the owner’s property taxes and future profits from their new energy technology. Because the lien is assessed on the property, the loan is not attached to the original owner, regardless of ownership changes.
Local governments already encourage the installation of solar panels on brownfields. In 2009, the City of Chicago partnered with a utility, Exelon, to develop the nation’s largest solar array on a former brownfield. For brownfield restoration to have lasting impact, a permanent system must help small developers. PACE removes financial barriers to constructing solar arrays, turning abandoned land into profitable sources of electricity; by spreading installation costs over the panels’ lifetime, property owners would not fear bankruptcy during renovations.
Given that brownfields bring in neither revenue nor private sector activity, municipalities should develop them as assets instead. An often under-utilized resource due to prohibitive cost, solar panels provide a solution. The nation’s 2010 summer net electricity demand (763 gigawatts) was 0.4 percent of the energy potentially collected by photovoltaic arrays (206,000 gigawatts). While the sun offers abundant energy, solar power generates only 0.08 percent of America’s energy.
In this proposal, a property owner works with a municipally-approved contractor to submit an application for cleanup and solar array construction. The municipality issues a lien on the property and gives the owner financing to begin cleanup and construction. Once the arrays are operational, the owner sells energy back to the grid. One square foot of solar panels averages 16.5 kilowatt-hours per year. An average brownfield is 6.5 acres, meaning its solar array could produce 700,000 kilowatt-hours per year. By selling back electricity at the average national rate of 12 cents per kilowatt-hours, it would make $86,000 per year. For reference, a 2003 brownfield cleanup in Denver, CO, cost $80,000. Additionally, as manufacturing costs of solar panels decrease, solar energy may cost $1 per watt by 2013. Although cleanup and solar installation costs vary by brownfield, a property owner could feasibly pay back a PACE loan and cover future maintenance costs using energy profits.
PACE funding for brownfield revitalization solves the issues of funding and open space, which are two of the biggest roadblocks preventing implementation of solar panels on a large-scale. Receiving backing from PACE, landowners could not only redevelop harmfully unproductive land, but also rejuvenate entire communities through the presence of green zones in industrial areas. Unfortunately, due to a ruling on the part of the Federal Housing Finance Agency (FHFA), the federal government has put PACE funding on hold. Before this policy can be executed, the FHFA’s ruling against PACE financing must be overturned.