While federal legislators dilly dally over the solar tax credit, local lawmakers in Berkeley, Calif., have decided to move forward with a novel solar financing program. The Berkeley City Council unanimously approved a solar loan program late Tuesday night that will see the city loan homeowners the upfront cost of solar panels and recoup the cost across a 20-year property tax assessment. The city says it hopes to start accepting applications as soon as October.
The program solves a number of problems that have been holding residential solar back. First and foremost, it removes the high upfront cost of going solar with a large, lump-sum loan, around $20,000. And it goes even further, by attaching the loan to the property title — which means that if a homeowner moves before paying off the loan, they can easily pass the payments along to the new owner. Residential solar installers, on the other hand, often require customers to pay an extra fee to break their contract should they move.
“It’s a visionary model for spreading solar and ensuring people can make the effort to do the right thing and add value to their home,” the CEO of Berkeley-based Sungevity, Danny Kennedy, told us.
The next step for the city is to secure a financier to front the money on the loans, and given the state of institutional mortgage houses, that could prove difficult. But city reps are optimistic: “I would argue that this is very, very secure debt,” City Deputy Christin Daniel told the New York Times. The city will initially seek $1.5 million for a pilot program of about 50 homes before scaling up to a program financing hundreds of solar systems.
The Mayor’s Sustainability Advisor Nils Moe says the pilot program should start by the end of October or beginning of November and if things go well the second, much larger phase could start at the new year. While the focus of the pilot program will be on photovoltaics, Moe says the second phase could include solar thermal as well as energy efficiency technologies.
Already Berkeley’s innovative program has sparked interest elsewhere in the country. Last year Bates told us he hoped to work with the EPA to create a blueprint guide for other cities and jurisdictions to follow Berkeley’s example. Moe says the EPA has put up $115,000 to evaluate the program with the city and UC Berkley’s Renewable and Appropriate Energy Laboratory and create a replication guide.
This program is very different than the solar incentives Mayor Gavin Newsom pushed through in nearby San Francisco. While the Berkeley program offers a loan to cover the total cost of a solar system, the San Francisco program offers tax rebates up to $6,000 to homeowners.