Berkeley going solar - city pays up front, recoups over 20 years
Berkeley is set to become the first city in the nation to help thousands of its residents generate solar power without having to put money up front - attempting to surmount one of the biggest hurdles for people who don't have enough cash to go green.
The City Council will vote Nov. 6 on a plan for the city to finance the cost of solar panels for property owners who agree to pay it back with a 20-year assessment on their property. Over two decades, the taxes would be the same or less than what property owners would save on their electric bills, officials say.
"This plan could be our most important contribution to fighting global warming," Mayor Tom Bates said Thursday. "We've already seen interest from all over the U.S. People really think this plan can go."
The idea is sparking interest from city and state leaders who are mindful of California's goals to reduce greenhouse gas emissions by 25 percent by 2020. Officials in San Francisco, Santa Cruz, Santa Monica and several state agencies have contacted Berkeley about the details of its plan.
"If this works, we'd want to look at this for other cities statewide," said Ken Alex, California deputy attorney general. "We think it's a very creative way to eliminate the barriers to getting solar panels, and it's fantastic that Berkeley's going ahead with this."
This is how Berkeley's program would work:
A property owner would hire a city-approved solar installer, who would determine the best solar system for the property, depending on energy use. Most residential solar panel systems in the city cost from $15,000 to $20,000.
The city would pay the contractor for the system and its installation, minus any applicable state and federal rebates, and would add an assessment to the property owner's tax bill to pay for the system.
The extra tax would include administrative fees and interest, which would be lower than what the property owner could obtain on his own, because the city would secure low-interest bonds and loans, officials say. The tax would stay with the property even if the owner sold, although the owner would have to leave the solar panels.
The property owner would save money on monthly Pacific Gas & Electric bill because electricity generated by the solar panels would partly replace electricity delivered by the utility. After the assessment expired, the solar panels - of a simple technology that requires little or no maintenance - would continue to partly replace PG&E electricity.
Bates' chief of staff, Cisco DeVries, came up with the idea about eight months ago when he was looking for ways the city could meet its goals to reduce greenhouse gas emissions under a measure that Berkeley voters approved last year. Measure G mandates that the city cut its greenhouse gas emissions 80 percent by 2050.
"Over 20 years, the economics of installing solar panels are great," DeVries said. "But the financial hurdle of the up-front costs was preventing people from doing it."
DeVries modeled the solar financing plan after underground utility districts. Putting utility wires underground can cost millions, but creating a special assessment district allows neighborhoods to pay off the costs over 20 or 30 years after the city pays for the service up front.
Electricity generated at a PG&E power plant comes from a mix of hydropower and natural gas. Greenhouse gases are emitted when the natural gas burns to create electricity. Berkeley officials hope that, over time, 25 percent of property owners will sign on to the new solar financing plan, reducing the city's greenhouse gas emissions by 2,000 tons a year, said the city's Measure G coordinator, Timothy Burroughs.
If the plan succeeds, Berkeley would be about 10 percent closer to its Measure G target, Burroughs said. Solar panels shouldn't be a tough sell in Berkeley, he said, which already has more solar systems per capita than any other Northern California city.
Berkeley also is considering using the financing plan for other energy-saving projects, such as insulation or heating. The U.S. Environmental Protection Agency announced last week it intends to grant Berkeley $160,000 to cover some of the city's legal, accounting and staff costs associated with starting the plan.
State Treasurer Bill Lockyer has also been interested because the plan encourages property owners to save energy without much government expense.
"Anything that helps expand and enhance the financial feasibility of solar energy is definitely something we support," said Lockyer's spokesman, Tom Dresslar.
Here comes the sun - details of program
The city hopes to provide financing for residents and businesses who can't afford the up-front costs of installing solar panels. This is how the program would work:
-- Property owners would hire a city-approved contractor who would be paid for the system and its installation, minus rebates.
-- The city would tax the property owner for the remaining cost, to be paid over 20 years. Future owners of the property would inherit any unpaid tax, along with the solar system.
-- Property owners would save as much in energy costs as they would be paying in taxes while reducing the amount of greenhouse gases created by generating electricity using natural gas and hydroelectric generation.
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Comments (17)
I hope that the Ventura County can come up with something like this.
Comment #1 Posted by: Henrik | October 27, 2007 10:19 AM
So what are the obstacles to implementing a similar plan in Ojai, where the sun shines more often than in Berkeley? Can you and the Ojai Valley Green Coalition present this idea to the City of Ojai? Can you tell us what needs to happen to move things forward in Ojai?
Is the City up to speed in understanding "passive solar and cooling" which makes use of natural forces in the environment to produce comfortable indoor temperatures, rather than trying to overpower temperature and humidity by mechanical means?
Here in Ojai many residents and business-owners depend on massive amounts of energy to create artificially cooled and heated spaces. A few days ago during the autumn heat wave, I could hear air-conditioner units buzzing again. Some people keep them going even after it cools off in the evening, because they fail to open their windows. I about freeze to death when I go to the market or bank, they keep it so cold their employees wear sweaters on hot days and, conversely, in the winter people crank up the heat so they can wear summer clothes all year long...
I gave the City a stack of books and videos on sustainable buildings ten years ago when I was elected to the council. Myself and staff members attended workshops and visited other cities with more sustainable policies. So I think it's high time for a Report Card on The State of Solar Design in the City of Ojai!
Comment #2 Posted by: Suza | October 27, 2007 10:28 AM
If you did take in the Eleventh Hour movie Saturday
after Ojai Day you saw a production as compelling as
Gore's "An Inconvenient Truth" with more of an urgent
message. The interdependent web of life we all rely on
has reached it's threshhold from contamination,
witnessed by the number of super storm systems we are
seeing and increasingly helpless to react to, like the
fires.With all the eco- friendly design for living features
Ojai has- bike and walking trails, open space and
managed growth, potential for mainstream solar power, it lends itself to becoming a model sustainable community to demonstrate alternatives to traffic, pollution and exponential growth. Ojai day
and many of the outdoor programs valley-wide
emphasizing pedestrian friendly design are not only
always hugely popular but demonstrate sustainable
community values alive and working well.
Pete LaFollette
Comment #3 Posted by: pete lafollette | October 27, 2007 11:12 AM
Michael-
Could you put some numbers in front of us for how a typical Berkeley installation is paid for under the new plan?
Comment #4 Posted by: El Anonimo | October 27, 2007 01:13 PM
On 2nd thought maybe the above request is a little too "businessy" and should be handled privately?
Comment #5 Posted by: El Anonimo | October 27, 2007 01:15 PM
If the Berkeley plan is successful it will be replicated throughout the state. As soon as we have more details on how the plan will work we'll bring it to the local governments in our region. This is a very exciting development in the movement to bring solar power to the mainstream. Again, stay tuned!
Comment #6 Posted by: Anonymous | October 27, 2007 01:47 PM
I assume the above Anonymous is the author? Thanks for the update--will stay tuned!
Comment #7 Posted by: Suza | October 27, 2007 03:10 PM
I read the article and maybe I missed it, but where is the money coming from? I think this is typical misguided thinking. If it was this easy, solar companies would be offering better financial terms for their customers in order to get more buyers. But the minute someone says the govt is providing something for relatively "free", everyone thinks its a great idea. Here is another idea, how about we have govt finance my college kids education by giving me a low interest loan over 20 years, what about giving me a lower credit card? The devil is in the details and its moronic to think a city govt is in better position to finance (they have to borrow from somewhere) than business. It would be more beneficial to take a home equity loan and expense the interest, then financing this for 20 years through the govt, which is doubtful it work anyway. Not against solar, but come on folks, this is fooey, there are no details and its the govt!!!!
Comment #8 Posted by: Anonymous | October 27, 2007 03:53 PM
The city of Berkeley would finacing the systems with a bond measure allowing low interest loans to pay for the solar system, and these loans would be paid back over a 20 year term thru the property tax assesment. There is nothing free here, just a way that the local municipality could finance solar systems with a low interest rate.
Look folks, if we don't do something quick, we are all in a world of hurt.
Comment #9 Posted by: Michael | October 28, 2007 06:13 PM
The solar panals only have a 15 to 20 year life span until they need to be replaced.
Comment #10 Posted by: Anonymous | October 28, 2007 06:46 PM
Say it ain't so, Anonymo 06:46 PM
By the way, is there a "06:46 PM"?
I think of it as "6:46 PM", or "18:46"
Comment #11 Posted by: El Anonimo | October 28, 2007 07:56 PM
The solar panels only have a 15 to 20 year life span until they need to be replaced.
So do most of the major components in gas-fired power generating plants and any other kind of generating plant you can name.
Doesn't it seem likely that in 15 or 20 years the defunct solar panels will be replaced with longer-lasting panels that cost less and generate more current? Everything else improves, so why would solar power generating equipment be any different?
Comment #12 Posted by: phalarope | October 29, 2007 04:11 PM
phalarope, what a smart, sensible reply! Namaste.
Comment #13 Posted by: Suza | October 29, 2007 05:23 PM
*blush*
:)
Thanks.
Comment #14 Posted by: phalarope | October 29, 2007 05:56 PM
Most solar panel manufacturers offer a 25 year power output guarentee, with a life expectancy of somewhere between 30 and 50 years...
Let's see, I will be 105 before I'll need to replace my panels...
Comment #15 Posted by: Michael | October 29, 2007 06:29 PM
Do these companies guarentee the DC to AC inverters for 50 years ? I don't think so. From what I've read the power output of the cells begins to degrade after 15 to 20 years. Power plants make power 24/7 and when it is raining.
Comment #16 Posted by: Anonymous | October 29, 2007 06:50 PM
Silly, of course inverters aren't going to last 50 years but when is the last time you had a VCR repaired? You don't, you buy a new one - same with inverters. Power plants make pollution 24/7 too, let's use them only at night!
Solar panels degrade .3% to .5% per year, so what? If we don't get responsible about our energy choices we won't be leaving much of a planet for our kids.
Comment #17 Posted by: Michael | October 31, 2007 08:22 PM