House Bill 1's Authorization of Financing for Solar Technologies

Ohio Bill 1 (HB 1), the biennial budget bill effective October 15, 2009, granted municipalities and townships the authority to create Special Improvement Districts (SIDs) and Property Assessed Clean Energy (PACE) programs that offer "assessment-based financing" for property owners seeking to install solar systems on their property. HB 1 was designed to help property owners finance the up-front cost of solar photovoltaic and solar thermal projects.

Senate Bill 223's Expansion of Financing to Other Alternative Energy and Energy Efficiency Technologies

On January 12, 2010, Senator Stewart (R-Athens) introduced Senate Bill 223 (SB 223) to expand HB 1. As introduced, SB 223 provides for the expansion of "special energy improvement projects" under HB 1 to include:

  • Wind Energy Projects
  • Geothermal Energy Projects
  • Biomass Energy Projects
  • Gasification Projects
  • Energy Efficiency Improvements

SB 223 also expands the list of eligible costs of a "special energy improvement project" to include energy consulting and auditing expenses common in connection with energy efficiency and weatherization improvements.

In addition to expanding the list of qualifying "special energy improvement projects" and eligible costs of "special energy improvement projects," SB 223 also expands the list of alternative energy technologies that municipal corporations might finance using "alternative energy revolving loan programs." SB 223 expands the solar photovoltaic and solar thermal revolving loan fund program authorized under HB 1 to include revolving loan funds programs for wind energy, geothermal energy, biomass, gasification, and energy efficiency projects.

SB 223 is undergoing hearings in the Senate Energy and Public Utilities Committee. At a hearing on February 9, 2010, the League of Women Voters of Ohio, the Ohio Consumers' Counsel, and the Ohio Environmental Council each testified in support of SB 223. A proposal to amend SB 223 seeks to include certain additional provisions supported by the state's utility companies that may ultimately assist in speeding enactment of SB 223. Specifically, the proposed amendment authorizes wind, biomass, and gasification projects as "special energy improvement projects" only if they are limited to 250 kilowatts in system size or create electricity "behind the meter" and not for sale onto the public power grid.

Impact of House Bill 1 and Senate Bill 223

The PACE programs authorized by HB 1 and SB 223 could represent a significant advantage for Ohioans seeking to expand their alternative energy options. Commercial, residential, industrial, nonprofit, and governmental property owners can finance solar photovoltaic and solar thermal projects using HB 1's Solar SID program. If enacted, SB 223's Energy SID program will expand the list of qualifying technologies to include wind, geothermal, biomass, gasification, and energy efficiency projects.

Energy SIDs and PACE programs are true public-private partnerships involving municipalities, townships and real property owners working together to develop and host alternative energy projects and energy efficiency projects that may lower energy costs for Ohioans.