Solar bonds are

municipal A municipality is usually a single administrative division having corporate status and powers of self-government or jurisdiction as granted by national and regional laws to which it is subordinate. The term ''municipality'' may also mean the go ...

revenue bond A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds, rather than from a tax. Unlike general ...

s issued to provide low-interest financing for lower-cost accelerated development of local

renewable energy Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...

technologies such as

solar power Solar power is the conversion of energy from sunlight into electricity, either directly using photovoltaics (PV) or indirectly using concentrated solar power. Photovoltaic cells convert light into an electric current using the photovoltaic e ...

History

The first solar bond authority was drafted by Paul Douglas Fenn, creator of

Community Choice Aggregation Community Choice Aggregation (CCA), also known as Community Choice Energy, municipal aggregation, governmental aggregation, electricity aggregation, and community aggregation, is an alternative to the investor owned utility energy supply system in ...

, and approved by

San Francisco, California San Francisco (; Spanish for " Saint Francis"), officially the City and County of San Francisco, is the commercial, financial, and cultural center of Northern California. The city proper is the fourth most populous in California and 17th ...

voters in 2001. Under "solar neighborhoods" approach, municipal governments would enter into multi-decade community-wide

power purchase agreement A power purchase agreement (PPA), or electricity power agreement, is a contract between two parties, one which generates electricity (the seller) and one which is looking to purchase electricity (the buyer). The PPA defines all of the commercial te ...

s with competitive suppliers and issue solar bonds, or "H Bonds", to finance the new supplier's rollout of local renewable energy and

energy efficiency Energy efficiency may refer to: * Energy efficiency (physics), the ratio between the useful output and input of an energy conversion process ** Electrical efficiency, useful power output per electrical power consumed ** Mechanical efficiency, a ra ...

measures, offering municipal bond financing to residents and businesses, the debt for which would be repaid on monthly electric bills - an approach that has come to be called "on-bill financing." The City of San Francisco enshrined solar bonds in its Community Choice Aggregation program in 2004 when it adopted an ordinance combining the City's authority to procure power for its residents and businesses with its authority to issue revenue bonds under the solar bond authority. Fenn drafted the ordinance (86-04, 2004) for sponsoring supervisor

Tom Ammiano Tom Ammiano (born December 15, 1941) is an American politician and LGBT rights activist from San Francisco, California. Ammiano, a member of the California Legislative LGBT Caucus, served as a member of the California State Assembly from 2008 to ...

, who had also sponsored placing the solar bond authority on the 2001 ballot, and Fenns' company, Local Power Inc., went on to draft a 2007 implementation plan and 2013 business model to implement the $1 billion project. Local Power also contributed substantially to Sonoma county's Sonoma Clean Power program which has a similar structure. Apart from creating a new generation of Community Choice Aggregations, San Francisco's solar bond authority spawned the subsequent appearance of both public and private financing of customer-owned solar and

measures, including PACE financing and the solar

or PPA, transforming the photovoltaics industry in the United States.

References

{{reflist Bonds (finance) Solar energy