We have recently made three changes to our SCEIP contracts documents that are of specific interest to participating contractors. These include changes related to renewable energy credits, partial prepayment options, and eliminated prepayment penalty language from the contracts.
First off, solar contractors who have been helping their customers to utilize SCEIP financing for some time are likely aware of the fact that we’ve had a clause in our customer agreement stating that, once in contract, the County of Sonoma owned the rights to that customer’s Renewable Energy Credits (REC’s) in perpetuity. This was a holdover from the original draft of our customer agreement, drawn up in 2009. At that time the state of RECs was up in the air and there was some potential for the County to claim reduction in GHGs (the Energy and Sustainability Division’s prime directive) through the ownership of those REC’s. After seeing this clause give a number of customers pause, it was determined that it should be pulled from our agreement.
Second, SCEIP financing participants now have an additional partial prepayment option available. Since the program’s inception in 2009, customers have had the ability to prepay the entire assessment without penalty. More recently, participants are now allowed to make a one-time payment to reduce the principal balance and reduce their annual payment over the same term. The one-time prepayment must be a minimum of $5,000 and there are no service fees associated with making the additional payment. We have found that this is an extremely attractive option for many solar customers take advantage of the federal income tax credit following installation of their PV system.
Finally, another change to the contract language regarding potential prepayment penalties was also recently made. When the original contracts were developed in 2009, there was considerable forethought given to the chance that the investment bonds held by the County to fund the program could need to be sold to another long-term holder who would charge a prepayment penalty. Given that this option has not been needed--and is not expected to ever be used--a decision was made to remove the potential prepayment penalty from the contract documents. Much like the REC’s discussed above, this language caused unneeded concern for some customers and we are excited to be able to make the change.
These are just three of the program improvements that we’ve made recently. If you’d like a full update on where the program has come from and where it is now, give our office a call and we’d be happy to schedule a personalized training with you and/or your staff.