Financing Solar

My homeowners association would go ballistic if I tried to install solar panels on my roof, but if you live in a less benighted area it's an attractive option.  The problem is that the upfront cost is too high for some people, and if you take out a conventional loan you run the risk having to keep making payments even if you sell your house.  One option is an outfit like SolarCity, which leases the installation for a set monthly cost.  If you sell the house, the lease goes with it, so your risk is minimal.  Brad Plumer passes along news of another alternative:

Two years ago, however, the city of Berkeley figured out an easy financing trick to get around this problem — the city itself just issues a bond to pay for the upfront costs of installing the panels, and the homeowner then repays the government over the course of 20 years via a small line item on the property-tax bill. (This way, if the home is sold, the costs of the panels get passed on to the new owner getting the benefits.)

It's a small policy tweak, but quite sensible. No mandates, no regulations, just offering homeowners an extra option if they choose. So it's not surprising to hear that, as Kate Galbraith reports today, the idea's been proliferating like crazy: This year alone, eight states have followed California's lead by giving their municipalities permission for this sort of financing, including Colorado, New Mexico, Ohio, Oklahoma, Texas, Vermont, Virginia, Wisconsin. (Apparently, a lot of cities need permission from the states before they can mess with property-tax bills.)

Another benefit of this is that cities can generally borrow at lower rates than private homeowners, so the economics of the panels work out better.  It makes a lot of sense, especially in sunny areas like California and the southwest.

UPDATE:

Getting Out of Iraq

Things are going so swimmingly in Iraq that we might speed up our exit plans:

Defense Secretary Robert M. Gates said Wednesday that the relatively low levels of violence in Iraq and improved cooperation of late between U.S. and Iraqi forces have raised the possibility that commanders might be able to "modestly accelerate" the reduction of U.S. forces this year.

....Gates said if trends throughout Iraq remain generally positive, the United States could withdraw three combat brigades, each consisting of about 5,000 soldiers, from Iraq this year. The existing plans call for two brigades to be withdrawn.

The expedited schedule might also have something to do with the tensions Ernesto Londoño reported a few days ago following the American response to an insurgent attack in Baghdad:

When the shooting subsided, another confrontation began. A senior Iraqi army commander who arrived at the scene concluded that the Americans had fired indiscriminately at civilians and ordered his men to take the U.S. soldiers into custody. The U.S. military said the soldiers had acted in self-defense and had sought to avoid civilian casualties; U.S. commanders at the scene persuaded the Iraqis to back down.

....Word of the incident quickly spread among U.S. soldiers in Baghdad. Several said it heightened concerns that the split-second decisions they make now have the potential to draw a sharp rebuke from Iraq's increasingly assertive security forces. And reaction from Iraqi military officials seemed to confirm those fears.

These things might be entirely unrelated.  Gates himself implicitly dismissed the incident by saying, "There clearly will be the occasional hiccup by someone who doesn't get the word."  Still, if violence is generally under control and Iraqi commanders are starting to harass American troops, that might make quick withdrawal into a more welcome option than it would be otherwise.  Just a thought.

Who Loves Medicare?

Matt Yglesias points out today that socialistic single-payer healthcare is actually quite popular in the United States.  It's called Medicare.  The chart below, from a Mark Blumenthal column last month, shows that Medicare users are far more satisfied with their healthcare than users of private insurance.  So why is it so hard to persuade Americans to simply expand the program?  Blumenthal explains:

The higher scores for Medicare are based on perceptions of better access to care. More than two thirds (70 percent) of traditional Medicare enrollees say they "always" get access to needed care (appointments with specialists or other necessary tests and treatment), compared with 63 percent in Medicare managed care plans and only 51 percent of those with private insurance.

....If the Medicare experience is so positive, why are people so easily talked out of expanding on it? First, younger Americans not enrolled in Medicare do not share the enthusiasm of seniors for the program. Six years ago, the Kaiser Foundation asked a national sample of adults to rate the Medicare program. Medicare was hugely popular among those aged 65 or greater....Those under 65, however, had very different views. Only 45 percent rated Medicare favorably. Only 36 percent considered it well run, as compared to 47 percent who said the same about private health plans. While 73 percent of those over 65 said Medicare allowed patients to choose any doctor, only 28 percent of those under 65 agreed.

There's a pretty obvious political dynamic that's responsible for this.  Seniors, who actually use Medicare, know perfectly well that it's a good program.  They can see any doctor they want, they get care when they need it, and the quality of service is high.  So why do younger Americans have such a negative attitude toward Medicare?

Answer: because conservative politicians have been bellowing for years about what a terrible program it is.  And since younger workers don't actually use it themselves, the bellowing works.  They figure it must suck.

In reality, Medicare works fine.  Not perfectly, but fine.  It offers service at least as good as private insurance despite serving the highest-risk population there is, and it does at least as good a job of reining in costs — slightly better, in fact.  Sure, it could be improved, but it's already probably better than the employer insurance that you have right now.  I'd switch in a second if I could.

But I can't, and neither can you.  And nothing like it will be offered to you anytime soon.  After all, if you actually used it, you'd probably like it.  Which is exactly what conservative politicians are afraid of.

Obama's Veto Logic

Last week Obama got Congress to give up the F-22 by threatening to veto the defense budget bill. This week, he's pushing for even more cuts. He's threatened to nix the bill if it contains money for the presidential helicopter—a program Gates tried to cancel but which the House revived—or a second engine for the F-35 fighter jet.

This is an encouraging but puzzling move. In dealing with Congress, Obama has employed a distinctive strategy, especially as witnessed in the cap and trade and health care debates. In both cases, Obama has been prepared to keep all options on the table and let Congress take the lead in writing legislation. Predictably, this has resulted in some very disappointing bills. So what's the difference here? If he can play hardball with John Murtha, why not with Max Baucus?

Sgt. 1st Class Lance Amsden, platoon sergeant for the 1st Platoon, Company C, 1st Battalion, 501st Infantry Regiment, 4th Brigade Combat Team (Airborne), 25th Infantry Division, watches as CH-47 Chinook helicopters circle above during a dust storm at Forward Operating Base Kushamond, Afghanistan, July 17, during preparation for an air assault mission. (Photo courtesy army.mil.)

America's Energy Policy = American Values

What does our energy policy have to say about our values? Everything, and a case currently before the Arizona Corporation Commission (ACC) shows why.

The story actually begins in the state legislature with a low profile bill to allow school districts to finance utility costs (water, gas, electric) if the project will save them money. Who could object to that, right?

In fact, nearly no one did.

The bill sailed through the AZ House without a single vote against it and was signed into law by Republican Governor Jan Brewer with no fanfare.

Enter two local high schools, wanting to use to the new law to sign an agreement with a solar panel installation & leasing company. The arrangement (called a solar service agreement, or SSA) would allow SolarCity to place panels of the schools' roofs, and sell the electricty to the district at a set price guaranteed to save the cash-strapped schools some serious money. (An estimated $4.7 million over 15 years.)

The new law allows districts to do exactly that, so, what's stopping them? Technically, nothing. The schools can sign on the dotted line. It's just that SolarCity isn't allowed to present the schools with any dotted lines.

Welcome to the barricades of the "energy revolution."

Here's the basic question: is SolarCity a public utility?

Think of a utility and what probably comes to mind is a mental image of giant power plants (coal, natural gas, nuclear) producing and selling a gazillion watts of electricity through the grid to hundreds of thousands, if not millions, of customers.

SolarCity’s new business model doesn’t look anything like that. There's no giant power plant. Only one customer per contract: the school district. But there would be electrical generation taking place on those school roofs, and that's the rub. Some, including existing utilities, maintain that the act of turning the suns rays into electricity makes the setup a public utility which must be regulated by the ACC.

ACC chair and renewable energy advocate Kris Mayes recently called SolarCity's request “perhaps the most complicated case, and one of the most significant cases, in the history of Arizona.”

SolarCity spokesman Jonathan Bass told me that the new law “should make it easier for schools to enter solar service agreements and help establish reporting requirements." But, he went on, "without the ACC case being approved, it won’t help much, as solar providers will not be able to offer SSAs.”

And the non-profit group, Vote Solar Initiative, recently provided this take on the ACC case:

In California … most commercial-sized systems are installed under this model. Instead of a customer buying a solar system outright, the customer instead provides access to the roof for a solar company to install and operate a system, and the customer simply buys the electricity on a kWh basis. A big benefit is that there are no upfront costs. And for non-taxpaying entities like schools and government buildings, this is the only way they can leverage the 30% federal investment tax credit. Without this mechanism, any town/school/water district that wants to go solar has to leave serious money on the table. [My emphasis]

But this case has significance beyond Arizona’s borders and will affect far more than just schools. At issue before the ACC are the rules that will determine what kind of energy system our nation will have in the coming decades.

Will it be sustainable or will it remain focused on short term profits? Will it be efficient and flexible enough to allow small-scale clean and renewable sources into the game, or wasteful and protective of business, as usual? Will our energy policy help keep America safe, or will it increase threats to our national security? Will it foster democracy or centralize authority? Will it push us to support foreign dictators, eroding our moral authority in the world and making us vulnerable to the enemies of our “friends?”

The truth is that energy policy is not primarily about energy. Energy — how we get it and how we use it — is, above all, about our values. The new energy system we’re building (through cases like the one before the ACC) will tell us, and the world, who we are as a people. In this energy and environmental crisis, we've been given an opportunity to reaffirm our best American values. We mustn't let it slip away.
 

 Osha Gray Davidson covers solar energy and the environment for The Phoenix Sun, and is a contributing blogger for Mother Jones. He edited The Climate Bill: A Field Guide. For more of his stories, click here.

On Wednsday, I reported that the National Archives is considering using a CSI-ish procedure that could produce clues as to what was said during the infamous 18 and 1/2 minutes missing on one of Nixon's Watergate tapes. The story got much attention, and several Watergate historians--who often don't agree on anything--told me they each are hoping that the testing yields something.

The procedure, which is rather straightforward and can be done relatively quickly, would try to determine if there are tell-tale indented impressions on one of the two pages of Nixon chief of staff Bob Haldeman's notes from this meeting--impressions that might have come from possibly missing notes that correspond to the 18 and 1/2 minute gap.

Today, I received an image of that particular page.

Does it literally hold the key to solving this Watergate mystery?

You can follow David Corn's postings and media appearances via Twitter.

Cui Bono?

Mike Konczal has a nice primer over at the Atlantic about high frequency trading.  You're likely to hear a lot more about this subject in days to come, so it's worth a few minutes to head on over and read it.

There are two aspects of HFT that are drawing attention.  The first is just the basic effect of ultra-fast, high-volume trading on equity markets in the first place.  The second is "front running," the allegation that big players are able to gain access to stock prices a few milliseconds before the rest of us via flash orders, thus allowing them to enter orders early and make guaranteed profits.  Konczal's conclusion:

As the debate unfolds, remember to ask yourself, (1) whose information is being exploited by whom and how, (2) does this make financial markets stronger and more efficient — say by providing liquidity — during a downturn when markets need them the most, and (3) what is this doing to the price mechanism — is it helping prices converge to fundamental values or driving them further away? The evidence currently looks like HFT is doing bad things on all three accounts.

As Konczal points out, if you ask the HFT community what benefit HFT provides, the answer is usually "liquidity."  But this is an answer that should be treated very skeptically indeed.  Major stock exchanges are not notably illiquid except under very specific, limited circumstances, and HFT traders aren't obligated to provide liquidity under these circumstances anyway.  And they won't.  They'll just flee, like everyone else.

So: cui bono?  As near as I can tell, HFT is just a pure, artificial money spinning machine with no value at all to the wider financial community.  In fact, as Konczal points out, it's quite likely to make markets weaker and less driven by fundamentals.  This is worth keeping your eyes on.

Eco-News Roundup: Wednesday, July 29

Blue-Marble-ish posts on our other blogs, for your Wednesday morning reading pleasure:

Obama not following doctor's orders? Obama's GP thinks the president is wrong about healthcare.

O'Reilly: oh, really? Bill O'Reilly thinks Americans don't live as long as Canadians because "we have ten times as many people as you do. That translates to ten times as many accidents, crimes, down the line." Really.

Cash for kidneys: The case for paying people to donate organs might be logical, but Kevin Drum isn't convinced.

Blue Dogs won't budge: Lawmakers who oppose a public healthcare option often represent the very districts that would benefit most from such a plan.

Community Rating

Scott Lemieux isn't happy with the compromise healthcare bill being put together in the Senate:

The normal justification for passing a compromise bill is that once a new system is entrenched it can be tweaked later. But I don't think it applies in this case. The public option is the core of the reform; a Blue Dog bill isn't so much half a loaf as a few meaningless crumbs. And far from making a public option more viable in the future, if anything, passing something that could be called health-care reform will reduce the impetus to pass actual reform. And, worse, a bill with no public option will further entrench the insurance industry and make it easier for them to block actual reform in the future.

Ezra Klein disagrees.  Partly this is because a public option would cover only a small fraction of the currently uninsured ("That's not a gamechanger, it's a tweak"), but mostly because he thinks what really matters isn't how they're covered, but merely that they're covered:

What has kept health-care reform at the forefront of liberal politics for decades is moral outrage that 47 million of our friends and neighbors are uninsured. That medical costs are one of the leading causes of bankruptcy in the United States. That an unemployed machinist gets screwed by fly-by-night insurance schemes while a comfortably employed banker need never worry. That the working class ends up in emergency rooms with crushing chest pains because they didn't have health insurance and didn't get prescribed cheap blood pressure medications five years before.

One of these days I need to think this through more rigorously, but I have a slightly more idiosyncratic view that's closer to Ezra's than Scott's.  Both coverage and a public option are important, but I think what's more important than either one is a simple change that — to my surprise — hasn't attracted any real opposition: community rating on a national scale.  Basically, this means that insurance companies have to take all comers at the same price.  They're allowed to adjust premiums for things like age and gender, but they can't refuse you due to preexisting conditions.  If your blood pressure is high or you have a family history of breast cancer, they still have to accept your business.

This hardly solves every problem.  In particular, it doesn't do much to rein in costs.  But if you combine (a) Medicare, (b) our current employer-based insurance regime, and (c) community rating along with subsidies for low-income families, you've essentially institutionalized universal healthcare insurance.  Not everyone will take advantage of it — there will always be a few people who go without coverage even if it's affordable — and you still a need a few other things like out-of-pocket caps.  Still, it's basically a statement that everyone in the country can and should be covered.  And once that becomes a cultural norm, it will never go away.

It will also, I suspect, eventually turn the private healthcare insurance industry on its head.  But maybe not.  That's the part I haven't thought through completely.  But if there's any single thing that's critical, it's moving public opinion in the direction of viewing healthcare as a universal prerogative.  Community rating plus low-income subsidies doesn't get us 100% there, but it gets us pretty far along.