BERKELEY, Calif. – The Berkeley City Council Tuesday night gave final approval for the nation’s first municipal program to finance solar arrays for homes and businesses.
The city’s Sustainable Energy Financing District could accelerate the adoption of rooftop solar by overcoming one of the biggest obstacles to homegrown green energy: the $20,000 to $30,000 upfront costs and long payback time for a typical solar system.
Here’s how the program will work: Berkeley will seek bond financing up to $80 million for the solar program – enough to install solar arrays on 4,000 homes and pay for some energy efficiency improvements. For those who sign up, Berkeley will pay for the solar arrays and add a surcharge to the homeowners’ tax bill for 20 years. When the house is sold, the surcharge rolls over to the new owner.
According to city staff, a typical solar array will cost $28,077 – you won’t find many McMansions in this city by the bay) – and after state rebates, $22,569 will need to be financed at an estimated interest rate of 6.75%. Berkeley is counting on obtaining a favorable interest rate given that the debt will be secured by property tax revenue. (And to answer the inevitable question, the foreclosure rate in Berkeley is low and property values have been relatively stable. How the meltdown on Wall Street will affect the program is another matter.)
For a typical solar system, the homeowner will be assessed an extra $182 a month on her property tax bill. To put that in perspective, the property tax bill on a $800,000 house – your basic middle-class home here if it was bought within the past three years – runs about $900 a month.
Electric bills are relatively low in Berkeley due to the temperate climate – Green Wombat’s was $15 in August. The real benefit of the program may come if it is used for solar hot water systems and expanded to pay for energy efficiency measures, such as installing new windows and insulation in Berkeley’s housing stock, most of which dates from the early 20th century.
The remaining hurdle is for the city to secure financing at a favorable rate. Once that is obatined, the program. which has won the support of local utility giant PG&E (PCG), should also be boon for solar panel makers and installers like SunPower (SPWR), SunTech (STP), Akeena (AKNS) and Sungevity.
The solar program is designed to help Berkeley meet a voter-approved mandate to cut its greenhouse gas emissions 80 percent by 2050.
Green Wombat 
An $800,000 house is middle class? The average middle class family can affors another $182 a month? If that is the cost of going green, none for me please.
Glenn you’ll find that pretty much the entire Bay Area fits this price range. Yes a 1920’s-2001 basic family home is around 800K if your lucky. Which is why the AMT tax needs fixing any of the normal Bay Area family that can afford a basic 800K family home probably built over 50yrs ago also probably gets killed by the AMT. Welcome to the largest regional economy in the US – housing will cost you. In my case my 1920’s 2bd 1 bath 1400sqft condo in SF is over 800K. I do have a back yard though!
Glenn, this is California where everyone is star struck and dillusional. What should be interesting is when the $800K house depreciates in value and property taxes go down further hurting the economy. The state is already suffering tremendously from a loss of income (taxes) and overspending.
$28k for a typical solar system? What ripoff company are they contracting to do this? You could get a 7 KW system for that much, which is more than three times the power required. The typical household only need spend about $10k on a system. After the federal and California state rebates, I don’t see how any Californian home would need to spend more than about $5k. Finance that over 10 years instead of 20, and you’re looking at payment of roughly $50 a month.
What does the average ‘middle class’ homeowner in Berkeley have to make in order to afford an $800,000 house and over $1,000 a month in property taxes?
Good grief!!!
Great news… Only problem is that Berkeley is not very sunny and has lots of tall trees. Many times I’ll drive by non functioning solar signs (in thinking) due to low sun exposure. This program should be taking place in (Far East Bay) Concord, Walnut creek, Pleasant Hill, Antioch, Brentwood where temps exceed 90 frequently, are flat, and have less trees to block the rays..
Solar panels are great, but for them to work efficiently, they need to be at 90-degrees towards the sun, as much as possible.
Just placing them on the roofs of everyone’s house is a start, but not that efficient.
Gregg from Wichita KS.
Where would you go to find this $10K system that you refer to?
I think the program sounds great. I’ve looked into the cost of installing the panels on my home, and I simply could not afford them without a second mortgage. My electric bill runs about $120 a month, so I’d be willing to pay the additional $60 a month. Plus, the $180 a month is fixed, where the cost of electricity continues to rise.
Doug – loan calculator for ya
http://calculator-loan.info/index.php?form_complete=1&sale_price=800000&down_percent=20&year_term=30&annual_interest_percent=7
Lets just say that $5000-$6000 a month house payment is pretty normal for most families lucky enough to own.
Also keep in mind the Bay Area not the outer Bay Area but the central Bay Area has seen stable housing prices for the most part and in some major areas like San Francisco Proper home values have continued to climb. Granted getting a loan isn’t easy right now.
SF – Berkely – bay area with direct exposure to southern skys is proven ideal for solar power. Also keep in mind solar power is like a 25-30 year investment which case the juice your making might be feeding your future car also.
What a bad deal for the home owner. Your allowed to put power that is generated but not used back on the grid. Legally the power company has to buy it back. Will this be negated if the home owners agree to this program? The article did not mention anything about selling the extra power back to the power company.
PV in Berkeley does not make sense. If you include the cost of money, the system will never pay for itself. It is just sexy green. For much less money, and a lower carbon footprint, reducing usage will have a much bigger impact on your utility bills. Residential solar is popular for the same reason the Prius outsells the Civic Hybrid: it’s a visible statement of greenness.
I’m glad to see municipalities getting involved, but I share the thoughts of a few other posters — Berkeley is not exactly the first place I would think of to go heavy with solar. As the blogger says, “Electric bills are relatively low in Berkeley due to the temperate climate – Green Wombat’s was $15 in August.” $15 for electricy, versus $182 for the system, doesn’t quite add up. The same opportunity in Austin (or Sacramento, or Phoenix) would be a completely different story — my electricity bill for August on a moderately large but by no means McMansion home was well over $350. I’d be the first to sign up for this program were it offered locally.
to everyone…
This is an amazing program for evryone no matter where you live or who you are. More Solar Power and less conventional power from coal, oil and nuclear means more clean air, more clean water, more jobs, etc..for everyone. Solar power is unlimited energy, and any solar array on any home willl be adding to our pool of clean energy for the entire grid. 182$ a month is maybe a little more than an average berkely elec. bill, but probably not more than an average bill nationally. Once installed the home will no longer pay an elec. bill so the extra money will be available to pay off loan. Plus conventional elec. rates are only soaring, so in the end you will be SAVING money, along with our precious environment, economy and future. Stop complaining about little this and thats, finally we are getting a break on sresidential solar that will hopefully set an example for cities everywhere. If we cant afford 180 bucks a month to change the way we acquire power in this country then we are all doomed, forever stuck in this insane downward spiral that surrounds us…i.e. wall street meltdown, oil price skyrocketing, endless war, global terror, pollution clogged oceans and air,..etc…LETS CHANGE THIS OURSELVES PEOPLE AND DO THIS!!!
This is great except for one thing. The last thing we need is more solar panels.
According to most independent scientific studies, global oil production will now decline from 74 million barrels per day to 60 million barrels per day by 2015. During the same time demand will increase 14%.
This is equivalent to a 33% drop in 7 years. No one can reverse this trend, nor can we conserve our way out of this catastrophe. Because the demand for oil is so high, it will always exceed production levels; thus oil depletion will continue steadily until all recoverable oil is extracted.
Alternatives will not even begin to fill the gap. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment.
Surviving Peak Oil: We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from “outside,” and without the power grid virtually nothing works, including home heating, pumping of gasoline and diesel, airports, communications, and automated systems.
This is documented in a free 48 page report that can be downloaded, website posted, distributed, and emailed: http://www.peakoilassociates.com/POAnalysis.html
I used to live in NH-USA, but moved to a sustainable place. Anyone interested in relocating to a nice, pretty, sustainable area with a good climate and good soil? Email: clifford dot wirth at yahoo dot com or give me a phone call which operates here as my old USA-NH number 603-668-4207. http://survivingpeakoil.blogspot.com/
clifford and all reading…
for one…forget about liquid fuels..try electric vehicles charged at solar stations, or even better solar charged hydrolysis machines to power fuel cells…or maybe even biofuels grown from algae…anyway you slice it, liquid fuels are not a major concern..
secondly..where is your argument against solar..”last thing we need is more solar”?????—why?
thirdly…solar power is a great start towards decentralizing power to take us off of THE GRID….true it is not the majority at this point, but solar powered battery back up systems could power small communities all over the world, eliminating this “dire” need for highway transportation…
fourth…without the power grid nothing works??? heating??-solar thermal, gas and diesel pumps???- again multiple types of alternatives including solar, airports, communications, automation??? -same answer–
how about we change our mindset a little??? lets think outside the box—lets figure out a way to change our dependence on this “all powerful Grid and highway system”…lets scale down some of our colossal developmet projects…lets reuse everything we can and make sure everything new we design can be used for generations or recycled easily…
once again..lets stop complaining and panicking and escaping and running in fear..lets face all this together…lets all make a difference…power to the people…