In California, the mid-sized town of Benicia (Solano County) has agreed to participate in a California Communities solar program called CaliforniaFIRST, which will provide loans to homeowners to install solar systems via their property taxes.
The loans offer up to $75,000 worth of solar financing power (or 10 percent of the property’s value, whichever is smaller), and are repaid over 20 years. A $10,000 solar system would cost an additional $500 per year, plus interest (at an unspecified rate) – or what Benicia Public Works Director Charlie Knox sees as equivalent to the homeowner’s savings on utility bills.
The funds will be available in May or June of 2010, on a first-come, first-served basis. If experience is any indicator, the funds will disappear rapidly. So far, pilot programs in Berkeley sold out within nine minutes of opening.
The program, authorized under AB 811 in July of 2008, creates voluntary assessment districts which can use the property tax system to provide renewable energy installation costs via the sale of Clean Energy Bonds that has so far provided more than $200 million in financing.
Loans are attached to the domicile, not the borrower. Thus, homeowners who move effectively “sell” the tax burden and its associated renewable energy installation (or energy efficiency upgrade) to buyers.
The only problem with the loans may come from an unexpected source, as cash-strapped Californians add another level of debt to currently unsalable homes; a feature mortgage brokers in equally dire straits may view with hostility. Fortunately, the program is restricted to homeowners who already have a 20-percent equity in their homes. There are no income restrictions, however.
The tax-lien loans don’t restrict borrowing from other federal or state energy rebate programs, and Benicia is looking at offering an additional $1,000 for renewable energy installations.
Benicia will have to kick in $25,000 to join the program, and has also allocated $60,000 toward a marketing budget, but reports indicate these minor costs will be covered by San Antonio, Texas-based Valero Refinery, which has a facility in Benicia.
The CaliforniaFIRST program is one way to accomplish the California Solar Initiative, established in 2006 with $3.3 billion in dedicated funding aimed at providing 3,000 megawatts of “clean” energy via one million solar roofs by the year 2018.