Berkeley Mayor Announces Plan To Make Solar Energy Financing Easier
BERKELEY, Calif. Oct.23, 2007 (BCN) -- Berkeley Mayor Tom Bates today announced a plan for his city to be the first in the nation to allow property owners to pay for energy efficiency improvements and solar system installations as a long-term assessment on their individual property tax bills.
Bates said installations of solar electric and solar thermal systems are cost effective for many residential and commercial property owners with existing state and federal subsidies.
He said the advantage of his plan is that it eliminates two major financial hurdles to solar electric and solar water systems: the high upfront cost and the possibility that those costs will not be recovered when the property is sold.
Cisco DeVries, Bates' chief of staff, said the average cost of a solar energy system for a residential property in Berkeley is around $20,000, which is a high up-front cost that scares off many potential users.
He said that under Bates' plan, people who buy a solar energy system would have only minimal up-front costs and would instead pay off the system, as well as below-market-rate interest rates, as part of their property tax bill over 20 years.
In addition, the tax assessment would be transferable between owners. If homeowners sell their property before the end of the 20-year repayment period, the next owner would take over the assessment as part of their property tax bill.
Bates will ask the Berkeley City Council to approve the framework for a "Sustainable Energy Financing District" at its Nov. 6 meeting. The program could begin operating next year.
In a statement, Bates said, "Nearly every expert we have worked with on this financing initiative believes it can fundamentally change the market for solar."
He said, "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."
DeVries said, "We think this can be a model for other cities and there is a lot of interest in this from other cities and the state." He said, "This has the potential to be game-changing for the solar business and bring it into the mainstream."
University of California, Berkeley professor Dan Kammen, who directs the university's Renewable and Appropriate Energy Laboratory and will assist the city in developing its program, said, "Berkeley's proposal is brilliant because it removes the number one roadblock to solar: the high up-front costs."
Kammen said, "It also allows property owners to take advantage of the city's ability to find the best rates."
Gary Gerber, the president of Sun Light & Power, a solar installation company in Berkeley, said, "Nearly every day we meet potential customers who think they can't afford a solar energy system. With Berkeley's financing plan in place, just about any home or business owner who can afford to pay their utility bill every month should be able to go solar."
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