California adopts innovative solar loan law

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Left-leaning Berkeley and right-leaning Palm Desert are unlikely bedfellows, but the two cities were twin forces behind California’s innovative solar and energy efficiency financing law enacted Monday.

The law, sponsored by Assemblyman Lloyd Levine (D- Van Nuys), allows cities and counties to make low-interest loans to homeowners and businesses to install solar panels, high-efficiency air conditioners and other improvements to save energy. Participants can pay back the loans as part of their property taxes. If they move, the improvements and loan balance are transferred to the next owner.

The financing scheme, if adopted by cities, is likely to give a statewide boost to the installation of solar panels to generate electricity. Solar power systems can cost between $15,000 and $30,000--more than many homeowners can afford, although state rebates cover much of the cost. But with the loans, and the guarantee that the investment will not be lost when people sell their homes, the risk is dramatically reduced.

The original idea was hatched by Cisco DeVries, chief of staff for Berkeley Mayor Tom Bates. More than a year ago, when it was presented at a meeting of mayors in Seattle, the proposal drew national and international attention, with inquiries from scores of public officials. In November 2007, the Berkeley City Council approved the plan for solar power loans that property owners could repay through a 20-year assessment.

Palm Desert, a city with an aging population and high air-conditioning costs, jumped on the bandwagon and created the Palm Desert Energy Independence Program to offer the loans, setting a goal of reducing energy consumption by 30% over five years.

Berkeley’s initiative, called ‘Berkeley FIRST,’ is still in the pilot stage. But Palm Desert boasts that its Office of Energy Management has already started a list of interested customers. The city expects to be ‘the first city in the state to offer this benefit to its residents and businesses,’ said Palm Desert Management Analyst David Hermann.

So now who’s ‘right’? And what cities will be ‘left’ behind in the race for energy independence?

--Margot Roosevelt