Berkeley, California, may soon become the first city in the U.S. to help property owners pay for installation of solar panels by financing it upfront and having the homeowner repay the loan through a long-term assessment on their individual property tax bill.
The Berkeley City Council will consider Nov. 6 a proposal to create a Sustainable Energy Financing District, in which the city of Berkeley would pay for the installation of solar arrays or a solar hot water system for any homeowner or commercial building owner, with the property owner paying back the loan over 20 years through an assessment on their property tax bill. Berkeley would get the money to finance the solar installations by floating bonds. The mayor’s office says it could lead to having solar on 25 percent of all buildings in the city over the next 10 years.
RenewableEnergyAccess.com reports:
“Nearly every expert we have worked with on this financing initiative believes it can fundamentally change the market for solar,” said [Berkeley Mayor Tom] Bates. “There are more than 400 solar installations in Berkeley today. With this program, I think we can install thousands of solar systems over the next decade and go a long way to meeting our greenhouse gas emission reduction targets.”
UC Berkeley Professor Dan Kammen, who directs the University’s Renewable and Appropriate Energy Laboratory, will be assisting the City in developing the program. “Berkeley’s proposal is brilliant because it removes the number one roadblock to solar, the high up front costs. It also allows property owners to take advantage of the City’s ability to find the best rates,” said Kammen. “If Berkeley makes this work, I have no doubt it will be replicated all over the state and the nation.”
For property owners, there is little risk. California homeowners are finding that installing solar leads to an increase in the home’s resale value, and the tax surcharge to repay the solar installation loan - which stays with the property if the property is sold - is deductible on a federal income tax return.
Another benefit to homeowners: The city likely will get a better interest rate on the bonds that underwrite the project than an individual homeowner could get via a bank loan.
The program also will finance the installation of both photovoltaic arrays and solar hot water systems. The latter tap the sun’s rays to heat water, reducing the use of electricity or natural gas to heat water for bathing, cooking and the dishwasher.
