MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, why we may see the end of legal but potentially dangerous alternatives to marijuana. But first, have you ever thought about going green by going solar, putting solar panels on your roof to generate your own electricity?

MR. KOJO NNAMDIResidential solar energy is growing rapidly in the United States thanks to financial incentives at the local, state and national level that dramatically reduce the cost of getting started. But as lawmakers grapple with gaping budget deficits, those dollars are increasingly in jeopardy. Last month, the D.C. city council grabbed funds from a renewable energy incentive program to help close a city budget gap leaving 50 district residents without the money they'd been promised to help pay for new solar panels.

MR. KOJO NNAMDIThe shift comes at a time when oil prices are rising because of unrest in the Middle East and Africa and more people are looking at solar power as a way to create jobs and reduce global climate change. Joining me to talk about the future of residential solar power is Christophe Tulou, director of the District of Columbia Department of the Environment. Thank you for joining us.

MR. CHRISTOPHE TULOUThank you, Kojo. It's a pleasure to be here.

NNAMDIGood to have you. The district has a renewable energy incentive fund to help residents install renewable energy systems. Those could include wind and geothermal, but most have been solar. How does the incentive program work?

TULOUWell, the incentive program is established through an assessment on utility bills, both electric and gas. That money goes into a fund, a part of which goes to supporting the renewable energy investment program and that is where we have been spending money. It's about $3.5 million to date getting solar photovoltaic units on tops of houses.

NNAMDIThe fund, it's my understanding, reimburses participants for about a third of the cost of their solar energy system?

TULOUActually, that's the target. The D.C. rebate, because the cost of these systems is going down, now represents close to 50 percent. It's about 45 percent, actually.

NNAMDIAnd last month, as I mentioned earlier, the D.C. city council pulled about a third of the money in that $2 million fund to help close a projected budget gap. Who was affected by the loss of those dollars?

TULOUWell, a lot of folks and these are first adopters. These are the risk-takers. These are people very excited about having this technology as part of their energy mix. And most directly, in this case, about 51 people that had gotten a letter of approval of their applications from us were left wanting in terms of the rebates.

NNAMDIAbout 50 people so far?

TULOUYes.

NNAMDIWhere do they now turn?

TULOUWell we're hearing their concerns and very sensitive to the concern that they've raised because they've gone through a process with us. There's an expectation a rebate will be forthcoming and we want to make sure that we make them whole, but mostly because we think this is a terrific technology and we'd love to get that deployed everywhere in the city.

NNAMDIIn addition to grants, what tax breaks are available to help homeowners recoup some of the cost of installing solar energy systems? Frankly, it's one of the things I'm thinking about.

TULOUWell, our rebate is a part of a mix that creates a very vibrant market in the district. Part of that is a 30 percent tax credit at the federal level and that's off the total cost of the installation. We also have a very active market in our region for what they call solar renewable energy credits and you can sell those to someone who puts this facility on your roof and projecting out that can be a fairly substantial, roughly a third, again, of the cost.

TULOUOur rebate at half, you add it up and you're looking at something that gets really close to 100 percent of the cost of putting these units on your house.

NNAMDIInviting callers to join this conversation at 800-433-8850. What would it take financially for you to consider installing a solar energy system at your home? 800-433-8850 or go to our website, kojoshow.org You mentioned homeowners who install solar panels, that they can sell clean energy credits to local utility companies. How does that work?

TULOUThe way it works is through a law in the district that establishes a renewable portfolio standard and so the energy providers in the city, Pepco and Washington Gas primarily, are required to make available to district energy buyers a certain percentage of energy from renewable sources. And that is ramping up towards a 20 percent target in the year 2020.

TULOUSo in order to do that, they can purchase these credits from renewable energy installments, basically, anywhere through a fairly large region that encompasses the Northeast and into the Midwest and that can be solar, wind, geothermal and other systems.

NNAMDIOne of the reasons I got interested was reading a Washington Post article highlighting a district couple who shaved 25 percent of their solar installation cost through trading those clean energy credits. They got a 30 percent federal tax deduction and a district grant that covered another 35 percent so they ended paying just 10 percent of the bill. It's what incentives can do.

TULOUThat's exactly what incentives can do and it is a conscious effort on our part to make sure that this industry gets off the ground here. Our hope is that the district can back away from these rebates when this industry is well established and the market is able to support this technology. It's a terrific opportunity to keep the city, which is already at a leading edge in terms of renewable energy and energy use wisdom in the country, at the head of the pack. And so we just need to make sure we time it right to make sure that these subsidies get the maximum bang.

NNAMDIChristophe Tulou is director of the District of Columbia Department of the Environment. We're inviting your calls at 800-433-8850. How do you feel about the government paying part of the cost of getting residential solar energy systems up and running? 800-433-8850. Here is David in Silver Spring, Md. David you're on the air. Go ahead, please.

DAVIDAh, yes, I think it's a great idea and I'm talking about it's a good idea from a purely economic perspective. The way I look at it, with utilities and the fossil fuel industry, is we're all indentured servants and we're going to be stuck that way until we take matters into our own hands. If you invest in solar, it's about a six-year breakeven and after you've broken even, it sits there and prints money and turns your roof into an ATM. It's a fantastic way to reduce your dependency on sending money out of state and out of the city to utilities that are far off and away.

DAVIDSo in addition to the green, it makes good sense for the cities and the states to be doing it, even individuals.

NNAMDIWell...

DAVIDIf you're a business, it's a two to five year breakeven. It's unbelievable.

NNAMDIWell, in addition to the green, according to you, David, there's the green because after breaking even, after six years or so, you say it basically prints money. It sits there like an ATM and prints money for you so there's that aspect of the green also.

DAVIDIt depends on the state and it depends on the business...

NNAMDISure.

DAVID...but basically I'd put solar on my house and after six years it's just going to print. It's $2,000 a year just in my pocket. It's amazing.

NNAMDIOkay, David, thank you very much for your call. You, too, can call us. Do you have solar panels on your house or do you know someone who does? You can tell us about the experience. Do you think further cuts in clean energy incentives are likely both in the district and elsewhere as local, state and even national lawmakers struggle to balance their budgets?

TULOUI think it's certainly something that's on the table and in different jurisdictions, different decisions will be made. I think one of the things we have going for us here in the district is extremely progressive laws as it relates to energy use and that includes the first in the nation energy-benchmarking requirements that now are applying to public buildings and are now beginning to apply to folks in the private sector.

TULOUWhat we're doing is gathering information about energy use, making that transparent so the folks who are not using energy well will know about it. At the same time, the Public Service Commission is putting smart meters on everybody's home by the end of this calendar year. That will give each of us the information we need to know about our energy use. We have very progressive and very generous weatherization programs so whatever energy you're using, we're providing you with the opportunity to weatherize your home and make it that much more energy efficient. Then you can look at technologies like solar photovoltaic and decide to what extent you would want to invest in that and how much of a unit you would want to put on your house.

NNAMDIIn terms of what's happening at the national level, the U.S. House of Representatives is considering two provisions that would eliminate funding for Department of Energy loan guarantees for solar and other non-nuclear clean energy projects. That's a matter of concern to you?

TULOUIt is a concern. I think those loan guarantees would apply to massive projects, the sorts of things we wouldn't be able to deploy in the district because we simply don't have the space. What we'd be most interested in seeing continue is the credit that individual homeowners can get for the use of this technology and as far as I know, that's slated to go forward through 2016.

NNAMDIHere is Anthony in Washington, D.C. Hi, Anthony.

ANTHONYHey, Kojo, thanks for taking my call. So real quick, I understand that D.C. doesn’t really have the money or says they don't really have the money to continue this particular program, but I think that, you know, solar suffers a problem with exposure all over this country and I thought maybe D.C. could consider sponsoring some homes in the city. So instead of just having an incentive for many people, they can have an incentive for a few people and use that as a rallying, you know, cry for other people.

ANTHONYFurthermore, have you guys considered moving the leasing-- I'm sorry, moving the monies you do have or may have in the future toward the leasing program? Because very few people are actually buying solar cells or solar systems anymore, they're going to leasing. And that's basically what I was looking into as well because I live in a newer home and you know, the cost benefit analysis is definitely not there for purchase, but it may be there for leasing.

NNAMDIChristophe?

TULOUWell, the leasing idea is a terrific concept and we have several companies in the district that are ramping up to do that. And actually, as it turns out, it may be that between the federal credit and the solar RECs that I've talked about, there may be sufficient incentive and opportunity for all the players in this for those leasing programs to go forward.

TULOUThe way that works, very quickly, is a company will basically put the system on your home and will guarantee you a reduced utility bill in return for being able to take the renewable energy credits produced by your system and selling those in the marketplace. It's a terrific system. It means that you as a person who is putting a unit like this on your home have no up-front costs, but what you're able to enjoy right away is the energy saving, the utility cost-saving that would happen as a result of that technology.

NNAMDIHey, thank you very much for your call, Anthony, and I'm glad you brought that up because there are two types of solar energy systems that homeowners most often install, either to heat water or to generate power. How do they work?

TULOUWell, the generating power one is the one that we have been working mostly to inspire and that is solar cells on the roof that actually directly translate sunlight into electricity. And that can offset roughly about 30 percent of a typical home's energy electric use so that's a terrific advantage.

TULOUSomething that has a much quicker return on investment is what we call solar thermal using the heat of the sun to heat up the water. That means that you don't have to use gas or electricity, whatever you happen to have in your home, to heat that water. And that's a terrific opportunity, particularly in places like Ward 7 and 8 where you have a lot of gas use, not so much the electricity, but a lot of gas use for heating water and that can save folks a lot of money.

NNAMDIIn the District of Columbia, you're also working on more ways to encourage people to go green with solar energy. What if someone does not have a big enough roof for solar panels?

TULOUWell, that's an interesting question. And actually, if you have a single family home, chances are you've got enough for some solar deployment. There are other issues. You may be shaded by another building or have a big tree. That may compromise your ability.

TULOUOne of the things the advocates are looking for and that we're certainly taking a serious look at is establishing what are called solar farms and creating the opportunity for homeowners that cannot put a facility on their home to invest in, along with their neighbors, in a solar application on, say, the top of a nearby bank or some other building. So that everybody can buy in, everybody benefit, but they don't necessarily have to do this on their own house.

NNAMDIAn adjoining building, a nearby park or you can invest in a community farm of solar energy.

TULOUExactly right.

NNAMDIHere is Harvey in Alexandria, Va. Harvey, you're on the air. Go ahead, please.

HARVEYThanks for taking my call. I'm curious, with all of the income potential that these are generating, at what point does oil price have to rise for these government incentives to no longer be necessary, for it to be cost effective for the individual to just do it without government help?

NNAMDIGood question.

TULOUYes, and I think the answer is to that is a twofer. One is the cost of these systems is dropping dramatically. In 2009, it was about $10 per watt. We're now down to $6 a watt and that's installed. So we're seeing a dramatic reduction in cost of these systems. So we don't know for sure where the break-even point will be, where the market itself is going to sustain a robust program.

TULOUWhat that enables us to do in the District is think about how we might tailor rebates that we might be providing in the future to get this technology to people who would need the most help, don't have the income to invest these systems otherwise.

NNAMDIHarvey, thank you very much for your call. We move onto Dan in Silver Spring, Md. Dan, your turn.

DANHi, Kojo, how are you? I have this question. If I was residing outside of D.C. still that solar panels are available to us and my other part of the question is, if it is just, like, a regular customer that have other kind of facilities, I guess, Pepco or VGE what would be the initial cost for install solar panels?

NNAMDIThe initial cost for installing solar panels?

TULOUA typical solar panel system in the District is one that would produce about four kilowatts of power and that's about $24,000 proposition. We -- our program isn't going to support the development of that system in houses outside the District obviously, but the neighboring jurisdictions in Maryland in particular, has a program. It's nowhere near as generous as the rebate that's available in the District, but those costs are coming down. And for, as I mentioned, for an average home in this area, you're talking about a $20,000 to $24,000 proposition.

NNAMDIDan, thank you for your call. Here is a tweet we got from someone who says, "For those of us far down on the renewable energy incentive wait list, number 280, we will ever be able to get solar funding and if so, when?

TULOUThe answer to that is not certain, but my sense is is that this is a program that will continue on in some form as we assess over time the role that the District can best play in moving this technology forward. Let me clarify just a little bit. The law that established the renewable energy investment program is slated to end at the end of fiscal year 2012 so that will be September 30, 2012.

TULOUSo at that point, the responsibility for moving renewable programs will have shifted over to another entity that we are just now creating, called the sustainable energy utility. And among its jobs is to reduce to per capita energy use among all District citizens.

TULOUEvery year, both electric and gas use and these renewable technologies, including portable tanks, solar thermal, geothermal and others will be certainly part of a mix. And I suspect, through the sustainable energy utility, there will be support for folks who are looking to deploy these technologies.

NNAMDIHow does the District, as a whole, benefit from the investment it's making in residential solar energy?

TULOUWell, the District as a whole benefits -- the big picture is we as a city are almost, at this point, totally dependent on energy resources that come from outside the city. A lot of that is coal, fuel, electricity. So we're dependent on the price of that fuel, we're dependent on the reliability of the system that gets that energy to us. And really the benefit here is to create a market and a generation capacity for energy in the District that will help us be less dependent on those outside sources. And by deploying these kinds of technologies, we also reduce the amount of greenhouse gases produced. We do our part to keep climate change at bay.

NNAMDIHere is Lisa, in Fairfax, Va. Lisa, you're on the air. Go ahead, please.

LISAHi, I just wanted to start out by saying I am pro solar and pro credit, but I'm concerned about the environmental impact of the manufacturing process of these solar cells and the -- you know, where are we getting the cells from? Where are the different companies in the District procuring their cells?

LISAThere's an article in The New York Times about a year ago that detailed how toxic the process is and that the cells we're getting from China, which may be much cheaper to purchase, have disastrous and environmental impact because the manufacturing, recycling the byproducts of the process properly.

TULOUAnd that's a very legitimate concern. It's something that folks should be thinking about. It is a conundrum for us because, excuse me, most of the solar systems that are deployed in this country are, unfortunately, not built here and there are environmental consequences. The production of some of these systems, some more so than others, some systems, depending on where they're built and what technology's being used, more than others.

TULOUI think one of the key things here is addressing our renewable energy interests, that we create a market that's sufficient for us to take the next step and consider the sourcing and consider whether or not we can actually develop a viable domestic source of these panels so that we can have the kinds of environmental controls and considerations at play that we do in this country.

NNAMDIAnd finally, there's Hassan, in Washington D.C. Hassan, you're on the air. Go ahead, please.

HASSANHi, Kojo, how are you?

NNAMDII'm fine.

HASSANThank you for taking my call. I'm interested in the contact person that I can (unintelligible) in the District of Columbia. The second one is I have a vending truck that sells food and I saw someone that has a solar system on the roof of the truck and I'm interested in doing that. How can I do that? I'm pretty ignorant about solar systems. Can you please help?

NNAMDIChristophe Tulou, he probably just needs a contact number to get more information or a website to go to.

TULOUActually what I would suggest is checking with us at our website at, www.ddoe.dc.gov. Again, ddoe.dc.gov and we have a lot of information, preliminary information that may help you with some of your questions. If you need more help, there's contact information there and we'll be glad to help you.

NNAMDIChristophe Tulou is director of the District of Columbia Department of the Environment. Thank you so much for joining us. I look forward to talking to you in the future to see what progress is being made because it looks as if residential solar power is on the upswing across the nation.

TULOUIt sure is and thank you very much.

NNAMDIYou're welcome. We're going to take a short break. When we come back, we look at the issue of a synthetic alternative to marijuana that's getting a lot of people in trouble and could be dangerous. I'm Kojo Nnamdi.