WASHINGTON (April 21, 2016) – Texas’ solar-power potential outpaces that of nearly every other state. But according to a new R Street policy brief, that potential remains largely unrealized.

“Despite falling prices, Texas ranks behind such states as Colorado and New Jersey in solar-electric capacity,” writes R Street Senior Fellow Josiah Neeley. “Many energy-efficiency and other projects that generate significant cost savings on paper remain undeveloped.”

The report notes two particular mechanisms that could help ease the often prohibitively expensive entry costs typically necessary to make energy saving improvements to properties.

The first is property assessed clean energy (PACE) financing, under which “the responsibility to repay the loan to finance a property’s energy-efficiency improvements attaches to the property itself, rather than the property owner.” This is intended to address situations in which commercial property owners are hesitant to make clean-energy upgrades to a property, due to uncertainty over whether they will remain in the property long enough to pay off the loan and recoup the long-term financial savings.

The second mechanism is on-bill repayment, which allows individuals to repay loans for energy-efficiency improvements via an assessment on their monthly utility bills. This approach has been used successfully in a number of states and promises simplicity and flexibility for residential homeowners, as well as peace of mind for lenders, given the historically high rate of compliance with utility-bill payments.

“While government should not be picking winners and losers in the energy marketplace, it should take care that it has not created barriers to the emergence of new energy technologies,” the author writes. “Providing mechanisms that allow private financing and voluntary development of clean energy and energy-saving systems offers Texas consumers the ability to decide what makes sense for them. If properly designed, these new options can deliver billions in energy savings to Texans, without using the heavy hand of taxpayer funding or government mandates.”

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