There has been speculation for some time that renewable energy has all the components inherent in the subprime mortgage fiasco -– an economically shaky idea inflated way beyond its potential by federal interventions until the whole thing collapses.

If you want to see this crisis in its embryonic stage, take a look at the battle now shaping up between state and municipal governments and Fannie Mae and Freddy Mac over financing rooftop solar installations. In early July, Fannie Mae and Freddie Mac – newly conscientious about the possibility of mortgage defaults – ruled that it would not accept a new system pioneered in northern California where municipal governments pay the high cost of solar installations – usually around $35,000 – and then allow homeowners to pay back the loans over ten or twenty years on their property tax assessments.

The program, called PACE (Property Assessed Clean Energy) has the backing of the Obama Administration and was earmarked for some stimulus money.  Fannie Mae and Freddie Mac objected, however, noting that the loan would have priority over any mortgage and would thereby endanger the integrity of any mortgages the two government-run corporations might insure.

The Federal Housing Finance Administration (FHFA), set up to supervise the two corporations after the subprime meltdown, agrees. Together the three government agencies insure about half the mortgages in the country. 

California officials and solar enthusiasts are vowing to fight the ruling.  California Attorney General Jerry Brown, who is running for governor, has vowed a lawsuit.  Senator Barbara Boxer is promising legislation.  The federal agencies have vowed to defend their decision.  Meanwhile, nuclear supporters can take solace that financing of new construction is nothing unique to nuclear but applies to all forms of energy generation.

Read more at the San Diego Union-Tribune

Tags: Fannie Mae, Freddy Mac, Nuclear Townhall, Obama Adminsitration, PACE

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