This summer Berkeley, California will begin an innovative financing program for solar electricity.
Essentially, the City will front the costs for a solar photovoltaic system for residents (and businesses) who would otherwise not be able to afford the upfront financing. In return for covering the initial costs, Berkeley will levy a 20-year tax assessment on the property to pay for the loan. The tax will apply to the building, not the property owner. Thus, if the owner sells the home, the assessment will stay put. The next owner will inherit the remainder of the loan – and the solar photovoltaic system.
Berkeley City Council passed its initiative last November. Since then, officials have worked to set up the program including initiating low-interest municipal bonds to finance the system and establishing a network of city-approved solar installation companies.
When the program launches, property owners who wish to participate will contact a city-approved solar installer. The City will pay the installer, then apply an additional tax assessment to the property that covers the installation costs and associated administration fees, less any rebates or tax incentives that may apply.
Berkeley expects that extra property tax payment will amount to roughly $65 per month depending on the size of roof top system. In general, most residential solar installations within the city range from $15,000 to $20,000. Over time, however, the increased tax should be offset from decreased electricity bills.
