Last week was Intersolar 2009, so I thought I'd devote some space here to a solar energy idea.  For all the talk about thin-film solar, solar-powered cell phones, and so on, solar power is actually a very mature renewable energy source.  The technology is predictable; installation and maintenance are well-understood problems.  The problem is financing.

In order to be cost-effective, solar power projects generally rely on the federal tax credit, which was extended this year in the American Recovery and Reinvestment Act.  Using this credit, developers can effectively knock 30% off the cost of a solar power project.  Combined with state and local incentives, as well as potentially lucrative provisions for selling power back to the local utility, the up-front cost for a solar panel can be effectively off-set by lower electric bills in the future.

However, the federal tax credit isn't available for entities that don't have what's called a "tax appetite", i.e. entities which don't have to pay taxes in the first place.  Consequently, non-profit organizations, schools, and other government buildings are not directly eligible for the federal tax credit.  That is a real problem, because in many cases such entities are precisely the ideal location for a solar project - they have a long-term presence in a single physical location, are responsive to their surrounding community, and have a vested interest in reliably cheap power.

Typically, non-taxable entities with a suitable installation site get around this problem by entering into a power-purchase agreement with a private solar developer with a tax appetite.  The agreemnts are fairly complicated, but the basic idea is that a private entity leases the installation site, installs solar power, takes the federal tax credit, and sells the solar power back to the non-taxable "landlord", at a lower rate than the local utility.

The difficulty with power purchase agreements is that they require a lot of hand-holding and trust, on both sides.  As a developer, it can be difficult to find a suitable landlord. On the other hand, a lot of potentially good solar "landlords" don't take the initiative to go looking for a developer, particulalry if environmental action isn't directly related to their mission.

It might be possible to streamline the process a bit, and to lower the barriers for creating new power purchase agreements.  A lot of the data on municipal buildings, and in some cases non-profit buildings, is readily available in government databases.  Using satellite imagery and GIS systems, these databases could be scoured for entities with good prospective solar installation sites.  A bit more careful cross-referencing with the Database of State Incentives for Renewables and Efficiency, along with local utility rates, could also help streamline some of the intial financing work.

The end result would be a high-quality database of prospective solar installation sites for buildings owned by entities lacking a tax appetite.  Selling database access to solar developers should offset the cost of operations.  Ultimately such a database would reduce the cost of the solar power development process by streamlining power purchase agreements, and would encourage the development of more solar power.