Lawmakers unanimously approved a first-of-its kind program Tuesday night to help property owners install solar energy systems by tacking the cost on to their property tax bills over a 20-year period.
"This program has the potential to once again be a leader in the nation," said Stephen Compagni Portis, director of special projects at the University of California, Berkeley's Renewable and Appropriate Energy Laboratory, which does analysis and research in renewable energy. "It's a model that is simple and yet really powerful in terms of allowing cities across the country to build a base of solar power."
There are still details to work out, but the new plan is a giant step forward in meeting the city's lofty goal of reducing greenhouse gas emissions by 80 percent by 2050, said Cisco DeVries, Mayor Tom Bates' chief of staff.
DeVries developed the idea and crafted the plan after more than 80 percent of voters last November approved Measure G, making Berkeley the first city in the nation to ask every man, woman and child who lives or works in Berkeley to do their part to reduce their carbon footprint.
The city later this month will release the Climate Action Plan giving residents and business people other ideas on how to reduce emissions. The solar plan is a significant part of that plan.
"(The solar plan) provides the financing tools to help people meet their obligations. Everyone is looking for new ways to get property owners to get to work on reducing their emissions and this provides an incentive," DeVries said.
With a unanimous vote Tuesday, the city approved the concept and framework of the Solar Financing Initiative, giving preliminary approval to the project.
Technical, financial and legal details are expected to be worked out for the Council's final approval by early summer, DeVries said.
"With the enactment of this initiative, Berkeley is not only providing residents and businesses with greater access to clean, emissions-free solar power, they are also providing a tremendous boon to local and regional solar installers and contractors, helping grow the local economy and tax base," said Ron Kenedi, vice president of Sharp Solar, a California-based solar panel production company.
Berkeley would pay all the up-front costs of installing solar systems by borrowing a lump sum of money from banks or other financial institutions.
It is currently considering the advantages and disadvantages of five financing plans, DeVries said. When a home or business is sold, the property tax assessment is passed on to the new owner.
If all goes as planned, a property owner's yearly tax payment would be about equal to what a person would otherwise pay annually in electric bills but with no up-front money down, city leaders said.
A solar energy system on a 1,500-square-foot home using roughly $140 worth of electricity monthly would cost about $20,000. However, people are sometimes reluctant to take such a loan for something that isn't absolutely necessary, city leaders and experts said.
"This is a loan that is much more accessible," said Dan Kammen, director of UC Berkeley's Renewable and Appropriate Energy Laboratory.
"I think the mayor's assessment is right, that if the up-front cost goes away, we're going to see a huge wave of solar energy and efficiency projects."
Property owners will be charged interest, but DeVries said the rates will likely be lower than what a bank would charge.
There are about 400 solar systems homes and businesses in Berkeley now, according to city records. But that number could climb into the thousands over the next decade under the program, said Bates. If the flood of calls and e-mails to city leaders is an indication, interest is widespread.
"This proposal has generated more interest from around the country and world than any other policy that the city has worked on since I've been here (in five years)," DeVries said.
City leaders have had queries about the framework of the program from Hawaii to Massachusetts as well as from Europe and Asia.
"I am not longer able to respond to the e-mails and calls I am receiving and I feel bad about that," DeVries said. "Our energy program officer came to me saying he has dozens of e-mails and phone calls he can't respond to either. There is a lot of interest."
MediaNews staff writer Doug Oakley contributed to this report.