City Backed Loans for Solar Panels

[irishbobcat]

Berkeley Approves City-Backed Loans for Solar Panels
September 24, 2008

By FELICITY BARRINGER
Published: September 17, 2008
SAN FRANCISCO — The Berkeley City Council moved late Tuesday to eliminate one of the biggest obstacles to making homes more energy-efficient: the upfront cost.
In a move being watched by other cities around the country, the Council unanimously approved a program to give city-backed loans to property owners who install rooftop solar-power systems. The loans, which are likely to total up to $22,000 apiece, would be paid off over 20 years as part of the owners' property-tax bills.
While the more conventional approach of government rebates and tax breaks is being tried by the State of California and many other jurisdictions, this is the first time that a special property tax district has been created expressly to help retrofit homes and businesses to reduce electrical use. In Berkeley, these districts have previously been used to pay for neighborhood improvements, like burying electrical wiring.
Property owners can opt to join the new district, which was established by the council vote. The final piece of the puzzle, however, is still missing: a deal with a lender whose capital the city would use to finance the program.
At first, Berkeley seeks to raise $1.5 million for a pilot program for about 50 homes. If its program is successful, the kitty could eventually contain tens of millions of dollars, and hundreds of property owners could be eligible.
If the early phase of the program lives up to the high expectations of its backers, the city government is likely to expand the field of projects it will finance, supporting energy-efficiency initiatives like putting in double-glazed windows or adding insulation.
The city's mayor, Tom Bates, said in an interview shortly before the vote, "I think this is probably the most important contribution Berkeley can make toward taking on global warming" and reducing greenhouse gases.
He added, "I think the idea is going to go like wildfire" through other city governments. He said nearly two dozen cities, from San Francisco to Annapolis, Md., and Seattle to Cambridge, Mass., had called, indicating they wanted to follow suit.
The program, said Daniel M. Kammen, a professor of energy at the University of California, Berkeley, and director of its Institute of the Environment, is intended to entice people who might be scared away by the high initial cost of retrofitting homes to incorporate solar power or become more energy-efficient.
Participating homeowners would pay roughly $180 more per month on their property tax bills, though the hope is that much of that cost would be recouped in savings on electric bills.
"We have about 100 names of people who have expressed interest in the program," said G. Craig Hill, a representative of the firm Northcross, Hill & Ach, which is advising the City Council on the financial details. Mr. Hill said he was negotiating with two private groups willing to try to resell the new city-backed debt obligations in a skittish marketplace.
Christine Daniel, a deputy city manager working with Mr. Hill, said, "I would argue that this is very, very secure debt," since it is backed by the property tax revenues in a city that collects 98 percent of the money it is owed each year. She added, "We've certainly gotten a lot of calls from cities that are interested, but most cities are saying, 'Let's wait and see how Berkeley does.' "
Professor Kammen said he was not worried, pointing out that venture capitalists have been pouring billions of dollars into the development of alternative-energy technologies.
"There's so much more money there than ideas," he said.
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As the Green Party Candidate for US Congress in the 6th district, I applaud Berkeley's efforts as a model for all cities in the 6th district to follow.
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DENNIS SPISAK FOR CONGRESS
Green Party Candidate for Ohio's 6th District
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