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.
How the solar plan would work
The city aims 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.
E-mail Carolyn Jones at email@example.com.