Paying for rooftop solar systems, water conservation measures and energy-saving upgrades like weatherization to homes and commercial buildings in San Francisco should become easier if a new proposal to finance such projects with extra property tax passes the Board of Supervisors. The financing program, which was announced Wednesday, is certain to excite clean power and energy and water efficiency advocates and the businesses that sell these technologies.
Under the plan, the city would lend home and building owners the money for such projects, and the loans would be paid off through an annual tax. The financing scheme has several benefits. San Francisco, like other cities, can raise money more cheaply than individuals and businesses and can pass these savings onto participants in the program. And it removes one of the biggest barriers to water- and energy-saving upgrades and renewable energy systems: the upfront costs. Even though these projects often pay for themselves over time from reduced utility bills, few people have the money to pay for them and are unwilling or unable to take out loans to finance them. Since the upgrades are financed over a long period of time, owners can more easily afford them through more manageable monthly payments. Finally, advocates argue that by attaching the city’s loan to the property, rather than the homeowner, the investment becomes less risky for the owner, who may want to sell the property in the future.
Berkeley, Calif., was the first U.S. city to adopt this type of plan, known among policy wonks as “property assessed clean energy finance,” and it’s been widely hailed as a success. San Francisco Mayor Gavin Newsom has been touting its benefits, including during his keynote speech at Earth2Tech’s March Green:Net 09 conference. The state’s Palm Desert and Sonoma County regions have similar financing programs or pilots in place, as does Boulder, Colo.
States must generally enact legislation to make the programs legal, and at least 11 — including Maryland, New Mexico, Nevada and Texas — now allow them, according to the San Francisco advocacy group Vote Solar. The group also claims that “hundreds” of cities across the country are considering adopting similar programs, the benefits and potential pitfalls of which it’s laid out in detail. If enacted, San Francisco would become the first major city to offer property assessed clean energy finance. If it works, expect more urban centers to follow suit.
Image courtesy of Christopher Chan on creative commons Flickr.