The city of Berkeley, Calif., is nothing if not progressive. It's the kind of place where you'd expect to see solar panels on rooftops and now, thanks to a new loan program for homeowners, you'll probably see even more.
Starting last fall, Berkeley began offering city-backed loans to homeowners looking to install solar panels. Through the Berkeley FIRST program, the loans were offered to a pilot group of 40 homeowners as a way of mitigating the biggest obstacle to solar: cost.
"We were trying to brainstorm and think about how we could promote solar installation, and we kept coming back to the biggest problem — financing it," says Berkeley's mayor, Tom Bates. "We think this idea will enable our citizens to go more solar than they currently are."
Under the program, homeowners can receive a loan, which will be assessed to their property tax bills and can be paid off over 20 years. The loans transfer to the new owner if the home is sold, which lawmakers hope will minimize high upfront costs and address fears that the cost of installing solar panels won't be recovered if a homeowner puts the property up for sale.
In the first round, only 40 homes are eligible for the financing, at a total cost of roughly $1.5 million. After the kinks are worked out in the program, Bates says he envisions financing hundreds more homes. Out of 40,000 homes in Berkeley, only several hundred currently have solar panels. "There's a lot of potential growth here," says Bates, whose own home has solar panels, low-flow toilets and energy-efficient appliances.
Proponents say the model is being eyed by other cities, because of the creative financing. "This changes the whole game when combined with no upfront costs," says Dan Kammen, a professor at University of California-Berkeley and director of the school's Renewable and Appropriate Energy Laboratory, who helped design the Berkeley FIRST program.
"Other municipalities can copy the idea and adapt to local tax codes," Kammen writes in an e-mail message. "My lab is building Web-based calculators for interested cities."
The program is part of an eco-friendly agenda pushed by Bates' administration. In 2006, Berkeley passed a measure calling for a Climate Action Plan that calls for aggressively reducing greenhouse gas emissions. Among other things, the city is focused on issues related to transportation, and it is working on strategies to encourage carpooling and public transportation.
"One of the things we're interested in is combating global warming and climate change," Bates says.
The cost of installing solar panels was something lawmakers focused on because the cost — anywhere from $18,000 and up depending on the size of the house and its energy needs — can be prohibitive.
So far, Berkeley property owners are pleased. "Everyone that I've talked to in the landlord community is interested in solar panels," says Nancy Friedberg, the executive director of the Berkeley Property Owners Association, which represents more than 500 landlords in Berkeley.
And the loan program could benefit solar contractors, who are vying for new customers under the Berkeley program. "We think it will definitely bring business our way. It already has," says Gerald Zepeda, the marketing coordinator for Sun Light and Power, which installs solar panels. The company sold two solar panel systems under the Berkeley First program.
"Right now, there's a lot of hesitation to make large expenditures by consumers who are concerned about the economy. We think this program will help mitigate some of that hesitation," Zepeda says. "We imagine in the long run, we could be adding installers if the program is successful."